NEW DELHI: Competition watchdog CCI has dismissed a complaint against Indiabulls Housing Finance and 19 officials, including MD and Chairman, alleging that the firm abused its position through misleading advertisements while offering loans against property at favourable interest rates.
Dismissing the complaint, the regulator in an order on Monday said, “the Commission is of the view that prima facie there is no competition concern arising in the present matter under the provisions of Section 3 and Section 4 of the Act and therefore, the matter is directed to be closed forthwith”.
While Section 4 of the Competition Act deals with the abuse of dominant position, Section 3 pertains to anti-competition agreement.
The Competition Commission of India (CCI) observed that the market appears to be competitive with the presence of large number of banks and non-banking financial companies and housing finance firms and thus, dominance of Indiabulls Housing is not established in the relevant market.
The relevant market pertains to ‘provision of loan against property in India’.
The ruling came on a complaint filed by Anil Bansal, director of Karmyogi Hotels & Buildcon Ltd, alleging that the NBFC abused its dominant position through misleading advertisements while offering loans against property at favourable interest rates.
Bansal claimed that Indiabulls Housing Finance Ltd (IHFL) induced him to avail of two loans against property facilities. He also alleged unfair and discriminatory increase in the rate of interest charged by IHFL, as per the order.
Further, Bansal alleged that due to imposition of high rate of interest, frequent increase of interest and not allowing pre-payment of loans resulted in the creation of barriers for new entrants in the market.
He also alleged that the competition gets adversely affected as consumers face hindrance in the form of penalties when they switch to another bank.
The CCI order said: “The allegation of aftermarket abuse is misplaced since the loan services of the nature impugned herein do not involve any aftermarket as alleged by the informant and is, thus, rejected”.
