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Many people are opposing new licenses #PrivateBanks & #Privatisation of Banks. One of the concern they bring up is various charges/fees by Private Banks. 'We deposit Money in Bank. So Bank should pay us instead of Charging us' is the regular argument.
#Thread
(1/n) https://twitter.com/kotaksecurities/status/1329641829399109635
#Thread
(1/n) https://twitter.com/kotaksecurities/status/1329641829399109635
Yes. Banks do levy many fees/charges. Those are not for keeping money in Banks. But for using various facilities like ATM, Online Transactions, UPI etc. The Infrastructure for all these facilities costs money for Banks. That's why they levy charges.
(2/n)
(2/n)
And since Public Banks are owned by Govt, they don't levy any charges under Public Pressure. Recently few PSBs withdrew notification for levying chgs after FM instructed them to do so.
But does that mean PSBs are good & Pvt Banks are bad?
(3/n)
But does that mean PSBs are good & Pvt Banks are bad?
(3/n)
Do we remember that in 2016-17, even Paytm & other apps used to levy charges for various services. NEFT/RTGS charges were also high. But after DeMo, the share of Banking transactions in economy increased Multifold. And now more users were available to recover the...
(4/n)
(4/n)
.. costs of Infrastructure for Banks. Today, the charges are very much low from what they were 4-5 years back.
This became possible because of Increase in no of users which allowed them to collect low chgs from more people than high chgs from few people.
(5/n)
This became possible because of Increase in no of users which allowed them to collect low chgs from more people than high chgs from few people.
(5/n)
Another factor which affects these charges is Competition.
Remember the time when Incoming Calls used to be charged till 2004? Anil's Reliance then & Mukesh's Reliance now forced entire Industry to reduce Chagres for Telecom which in turn helped Telecom Sector grow.
(6/n)
Remember the time when Incoming Calls used to be charged till 2004? Anil's Reliance then & Mukesh's Reliance now forced entire Industry to reduce Chagres for Telecom which in turn helped Telecom Sector grow.
(6/n)
The new startup named Zerodha stock broking has now forced other Brokerage houses to reduce Transaction charges for Stock Broking. Remember how Kotak/Sharekhan used to charge huge amt as brokerage?
The point I want to emphasize is that even Bank Charges & Fees will come..
(7/n)
The point I want to emphasize is that even Bank Charges & Fees will come..
(7/n)
... down as Competition rises, more Private Banks come up & more innovative practices are adopted like Fintech. Glorifying Govt to run so many Banks so that we don't have to pay charges is the most harmful way. Its the Competition which leads to efficiency, better mgmt...
(8/n)
(8/n)
... practices, cost reduction, innovation etc. When more Private Bank Licenses will be issued (assuming govt remains firm & doesn't give in to the today's protest by Bank Unions), Small Banks will be Privatized & Govt stake is reduced in others, automatically they will...
(9/n)
(9/n)
....have to compete with each other for more customers which will force them to reduce charges over a period of time as customer base increase.
Govt has never helped consumers in any way in any sector.
Who started offering services of cheap Air Fares? AI or pvt airlines?
(10/n)
Govt has never helped consumers in any way in any sector.
Who started offering services of cheap Air Fares? AI or pvt airlines?
(10/n)
Who started offering cheap Data & Telecom services? Is it MTNL/BSNL or Pvt Telecom Operators?
In MH, recently customers of State Power Companies have recd 25k, 50k power bills which are not even rectified after 6 months. While, Adani, Tata power rectified problems....
(11/n)
In MH, recently customers of State Power Companies have recd 25k, 50k power bills which are not even rectified after 6 months. While, Adani, Tata power rectified problems....
(11/n)
... of Customers in time bound manner. And there are many such examples where it's the efficient Private Sector which had forced PSUs to reduce Charges & not vice versa. Hence, Please don't fall for this argument of Bank Charges for Opposing this big reform.
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(12/12)
