Axis Bank Fined Rs 40 Lakh By CCI For Acquiring Stake In CSC e-Governance
The Competition Commission of India (CCI) has imposed a fine of Rs 40 lakh on Axis Bank for its failure to inform the regulator about its acquisition of a stake in CSC e-Governance. The acquisition in question involved Axis Bank obtaining a 9.91 per cent stake in CSC e-Governance, which was finalised in November 2020, as stated by the CCI in its order.
According to the order, Axis Bank was obligated to notify the fair trade regulator regarding the transaction. However, it did not fulfill this requirement, leading to the imposition of the penalty.
The CCI noted that the acquisition of stake in CSC e-Governance by Axis Bank did not fall solely within the scope of investment and could not be deemed part of ordinary business operations. As a result, the acquisition did not qualify for the benefit of Item 1 of Schedule I in combination regulations, irrespective of whether it resulted in the acquisition of control.
The commission concluded that Axis Bank had representation on the board of CSC e-Governance and intended to be part of the company's board of directors and management. This rendered the bank ineligible for the benefits outlined in the rules.
The penalty must be paid by Axis Bank within 60 days from the date of the order issued on 9 August. CSC e-Governance Services India is a special-purpose vehicle established by the Ministry of Electronics and Information Technology to oversee the implementation of the common services center scheme.
In response to the penalty, Axis Bank confirmed the imposition of the fine under Section 43A of the Competition Act, 2002, in a filing with the stock exchange on Friday.
