Banks' similar interest rates come under CCI scanner

As it suspects a possible unfair practice by banks with almost similar interest rates, the Competition Commission plans to examine whether lenders are operating as a cartel in fixing the rates.
The fair trade watchdog might take a detailed look at the matter since the Reserve Bank of India (RBI) has freed up bank interests, which are set by respective lenders.
The Competition Commission of India (CCI) Chairperson Ashok Chawla today said the regulator will probe the matter if needed.
"We will see (whether) by virtue of combining together or forming a cartel, are the banks paying the same amount of interest. How is that arising. We will look that if it needs further investigation," he said at an event here.

He said such a trend is being witnessed despite RBI allowing banks to fix their own interest rates.
The Commission has the mandate to keep a tab on unfair business practices across sectors. The watchdog has been keeping a watch on developments in the country's financial sector.
Going by banking experts, even though interest rates are a function of cost of funds, most of the banks keep their interest rates at similar levels amid intense market pressure.