Thread by @baujidesi

Let’s see how how Social Banking impacts profitability of PSBs.

I will not take you to the complex Banking calculation, will try to make you understand with quite simple calculations.

If we take an example of @TheOfficialSBI, they have customer base of approx 45cr. 1/2

In PSBs Passbook printing is an essential service, and even elite cuatomer of PSBs asks for it except few, however Pvt Banks don’t provide passbook.

Do you know SBI can save Crores, if they stop providing Passbooks. 2/n

If a passbook costs even 10Rs to Bank and suppose a customer uses one passbook a year, SBI ends up spenting 450cr on this. 😳

Wait, this is not all. Almost every Branch has one staff dedicately to print passbooks. If we consider a manpower cost of 20k per Branch 3/n

SBI ends up spenting 541.36cr (22141 Braches*20k*12Months).

So, SBI can save approx 991.36cr per year by just discontinuing Passbook Services.

We are not done yet.

SBI have Installed Passbook printing machine at almost all Brnaches and many ATMs.

4/n

But, as promised will not take you to complex calculation, as we will have to take many things like Machine Cost, Rent of Premises, Electricity Usage etc into consideration to get the Expenditure on PB machines.

Now you may ask, why SBI is not discontinuing Passbook then?

5/n

Because,ppl will start making hue and cry if they do so.

Also, most of the Customers of PSBs are illiterate, specially in Rural Areas. That’s the reason they r being provided Passbooks

This is just one example,there r many such parameters. Still PSBs manages to be in profit 6/n

So, the Bottom line is PSBs can also be profitable consistently. But to be in profit we will have to forego Social Banking.

But then again, we can’t leave Poor unbabked and that’s why India needs PSBs. 7/7

#IndiaNeedsPSBs
#StopPrivatization