The Competition Commission of India (CCI), in order to keep a check on the possible unfair practices, has started a study of functional parts of the nation’s growing financial sector. This includes insurance segments and banking. The study is being seen coming in the backdrop of the government push for numerous financial sector reforms. This is being considered as part of the huge efforts to propel the nation’s economic growth.
According to the Chairman of the CCI, the study will look at broadly the various dimensions of the financial sector. Under this, the issues to be studied include the way market functions and how the possible anti-competitive practices be in the areas such as insurance, banking, real estate and so on. This is probably the mandate for the study.
It has also been noted that CCI had made the mandate to act against anti-competitive practices through sectors. Moreover, to foreign players, the government is actively chasing long term financial improvements in the area.
It is believed that liberalizing the financial sector will lead to participation of more number of players. Furthermore, it could lead to increased competition. However, another fact can also not be ignored and that is raising the fears of anti-competitive practices.
When asked as to whether the CCI will look into the almost similar movement in the interest rates fixed by various banks, the Chairman stated that on the issue, there was no concern of anti-competitive practice. It must also be noted that the Reserve Bank has given the banks the freedom to fix rates as they wanted. According to the Chairman, there was no concern in that area at that point of time.
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