To keep a tab on possible unfair practices, the Competition Commission of India (CCI) has begun a study of functional aspects of the country’s growing financial sector, including banking and insurance segments.
The study comes against the backdrop of the government push for various financial sector reforms as part of larger efforts to bolster the country’s economic growth.
The study will broadly look at different dimensions of the financial sector, CCI chairman Ashok Chawla said. “(The issues to be studied include) how the market functions and how could be the possible anti-competitive practices in those areas like banking, insurance so on and so forth. That is broadly the mandate of the study. These are under way at the moment,” Chawla said in an interview.
The CCI has the mandate to act against anti-competitive practices across sectors.
The government is actively pursuing long-term financial sector reforms, including further opening up of various segments, such as insurance and pension, to foreign players.
Liberalising the financial sector would lead to participation for more players and in turn may result in increased competition, while it could also increase the fears of anti-competitive practices in the second.
Asked whether the CCI would look into the almost similar movement in interest rates fixed by banks, Chawla said there is no concern of anti-competitive practice on the issue.
“The Reserve Bank has given them (banks) the freedom to fix rates the way they want. Some of them have changed and some have changed. I don’t think there is any concern in that area at this point of time,” he said.