BJP MP Praveen Khandelwal has written to Reserve Bank of India (RBI) Governor Shaktikanta Das, alleging an “unhealthy nexus” between banks, e-commerce players like Amazon and Flipkart, and brand owners, and urged the RBI to issue “immediate directions to banks to cease offering exclusive discounts and cashback benefits” that are not extended to traditional retailers.

Mr. Khandelwal, who is also the secretary general of the Confederation of All India Traders (CAIT), has also urged the central bank chief to initiate an investigation into banks’ partnerships with e-tailers and their impact on purchasing patterns such as the proliferation of online mobile phone purchases using bank cards.

Flagging “aggressive discounting strategies and bank cashback offers” with discounts as high as 10% on e-commerce platforms, Mr. Khandelwal argued the collusion between banks, e-tailers and smartphone producers is distorting the retail ecosystem, with around 1.5 lakh retailers struggling due to these unfair practices, and over 50,000 small businesses shutting down already.

This, he said, is also driving many small traders to rely on “grey market” stocks, and asserted that “knowingly or unknowingly”, banks have become part of a cartel creating “an unhealthy, uneven market”, posing serious challenges to competition and the fundamental right to trade. The MP also sought time with the RBI chief along with representatives of the All India Mobile Retailers Association.

“Protecting both retailers and the financial integrity of our banking sector is of utmost importance. Breaking this nexus is essential for safeguarding our economy,” he concluded in his missive to Mr. Das.