How do Indian Banks earn profit

There is a news that Indian banks has created an example by posting a profit of Rs.42700 crore in the year 2008-09 inspite of global financial meltdown in the year 2008-09.

Government of India and various state governments through its various departments have parked lacs of crores of rupees in current accounts or savings account of various banks. Annual interest saved by all banks added together on such deposit will amount to more than Rs.42700/ crores of rupees.

Besides there is overall substantial decrease in number of employees working in the ban during last one decade. Every year thousands of bank employees get retirement or resign from the bank or dismissed from the bank due to some reason or the other, banks have not recruited fresh employees to that extent despite quantum jump in overall business of the bank. This savings on staff expenses is contributing to a great extent in keeping bank alive and earning profit to the extent of Rs.42700 crores in the year 2008-09.

Obviously labour exploitation or increase in per employee business has helped banks to remain in profit. It may be noted here that per employee business used to be one to two crores in bank and now the same is more than eight crores.

So far as foreign banks are concerned they cannot exploit labour/employees as their Indian counterpart can do. Standard of living of bank employee in India is pitiable and that in USA is royal. There is heaven and hell difference between the wage standard of bank employees of foreign banks and that in Indian banks. Rate of interest on deposit and interest on advances is so low in foreign banks that net interest margin is very thin and there does not exists the opportunity of getting government fund in CASA to the extent as is available in India.

It is however necessary to ascertain how much total business Indian banks had two decade ago and what used to be profit percentage on the business at that time and then the same ratio should be compared with total business of the year just ended. This can only reveal whether there has been increase or improvement in the profitability of banks in India. It is to be seen whether job creation in banks is the same as it used to be before the introduction of so called reformation measures in the year 1991.
Are Indian banks really helping poor and middle class as they used to be before 1991?
Are they creating job opportunities as they used to create before 1991?
Are banks paying same high standard of wage as they used to pay before 1991.
Are customers in Indian banks getting same free service as they used to get a few years ago? Now a days banks charge fee on cash deposit, cash withdrawal, issue of cheque books and what not.

In seventies and eighties bank employees used to be called as “High Wage Islanders” whereas present position is so much pathetic that even a peon in central government service gets more than a clerk and an officer in banks.

Department of Labour & social welfare and department of Human Resource Development were established to maintain healthy environment in all establishments and to prevent exploitation of employees by employers. It is now pity that even government departments do not hesitate to take more 12 hours work from their employees. There is large scale anomalies in wages paid to employees. It is fortunate or unfortunate that there is violent movement by employees because of acute crisis of job opportunities.