The recovery of the costs for banks will not appear feasible by purely looking at unit economics. A bank will take a view on the overall earnings from a portfolio of cards and the cost incurred. And there will also be banks who are in growth phase who won’t bother about profitability in the short run. The smarter banks will try to eventually phase out the tail customers whose relationship value is negative or negligible. But for no bank will all customers be profitable and that is acceptable in the overall game plan.
Disclosure : Invested.
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