What does it cost a bank to produce and issue a debit card?

This depends in which part of the world you are in, and the market competition. Typical Debit card outlay to a bank in South Asian countries is about $8 to $12 for the issuance and shipping. Sometimes this cost is subsidised by VISA and/or Mastercard, sometimes it is not. Depends on how the deal was structured and the volume of cards. The in-house cost of the card varies between 10 cents to 25 cents per card per month (that's the cost of one-time activation, and typing it into the system and the network itself).