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1 A Stdy on Cstomer Service Qality of Banks in India Dr. Manasa Nagabhshanam Lead Researcher Analyz Research Soltions Pvt. Ltd. Bangalore

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3 Table of Contents Chapter Introdction Role of Banking in Indian Economy Indian Banking Indstry & Service Qality Importance of Service Qality in Banks Measring Service Qality in Banking Sector Service Focs Areas of Banking Indstry 317 Chapter Service Qality Dimensions of Service Qality Service Qality: Conceptalization and Operationalization Literatre Review Understanding the Literatre Review 322 Chapter Research Methodology Objectives Hypotheses for the Stdy Sorces of Data Sampling Method Data Analysis Scope of the Stdy Limitations of the Stdy 326 Chapter Scheme 326 Chapter Respondents Profile Type of Bank Location of the Cstomers Gender of Cstomers Annal Income of Cstomers Occpation of Cstomers Cstomers Bank Types of Accont Dration of accont Smmary Profile of Respondents

4 312 TABLE OF CONTENTS Chapter Cstomer Service Qality Compared with Respondents Profile Cstomer Service Qality Rating distribted across age grops Cstomer Service Qality Rating distribted across Gender Cstomer Service Qality Rating distribted across occpational grops Cstomer Service Qality Rating distribted across Income grops Cstomer Service Qality Rating distribted across Cities Cstomer Service Qality Rating distribted across Banks Cstomer Service Qality Rating based on type of bank in which accont is held Cstomer Service Qality Rating distribted across dration for which accont is held Cstomer Service Qality Rating distribted across type of accont held by cstomers Hypothesis to Test Independence of Service Qality Rating from Categorical Variables 335 Chapter Cstomer Perception of Qality of Bank Services Analysis of Perception Cstomer Service Qality Reliability Empathy Responsiveness Assrance Tangibility 342 Chapter Analysis of Service-Qality Gaps Servqal Gaps Servqal Gaps for each Dimension A Comparison of Servqal Gaps in For Cities in India Comparison of Servqal Gaps based on different Types of Banks Servqal Gaps in Varios Banks Compared 352 Chapter Bankers Perception of Cstomer Service Qality Rendering services as promised to its cstomers Providing reliable services Employees willingness to help cstomers Employees being caring and providing individal attention to the cstomers Employees knowledge abot bank operations Physical facilities of the bank and ambience Dress and appearance of bank employees 358

5 TABLE OF CONTENTS 313 Chapter Findings, Sggestions and Conclsion Findings on Service qality Rating compared with Respondents profile Findings from cstomer perception of varios dimensions Findings from Banker s Perception on Service Qality Sggestions Conclsion 363 Bibliography

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7 CHAPTER-1 Introdction Bank plays an important role in the economic development of a contry. It is a financial instittion that accepts deposits and channels those deposits into lending activities either directly or throgh capital markets. A bank connects cstomers which have capital deficits to those cstomers with capital srplses. The banking indstry in India is facing certain challenges i.e. challenges of qality service, cstomer satisfaction, cstomer retention, cstomer loyalty, Qality service plays a major role in achieving cstomer satisfaction, and creating brand loyalty in banking sector. 1.1 Role of Banking in Indian Economy The Government of India, after independence had to focs on many areas among which one of the important tasks was economic development of the contry. In this context, the Indstrial policy resoltion in 1948 focsed on mixed economy, which played an active role in development of different sectors inclding banking and finance. A major step in this direction was the nationalisation of banks in 1948.The Banking Reglation Act was enacted which empowered the Reserve Bank of India (RBI) to reglate, control and inspect the banks in India. In other words all the banks in India fell nder the jrisdiction of Reserve Bank of India nder the Banking Reglation Act. The Government of India nationalised private banks in 1969 and later in 1980 in order to have better control over this sector. Government of India controls arond 91% of the banking bsiness in India. In early 1990s, the then prime minister of India P.V NarsimhaRao liberalized the sector by giving licenses to a small nmber of private banks, which came to be known as new generation tech-savvy banks. Among these banks were, Global Trst Bank (Now acqired by Oriental Bank of Commerce), UTI Bank (now re-named as Axis Bank), ICICI Bank and HDFC Bank. The banking sector in India constittes government banks, private banks and foreign banks. In the era of Liberalization, Privatization, and Globalization (LPG) banks play a dynamic role in contribting to the economic development of the contry. Some of the contribtions of banks to the economy of the contry are discssed below: Facilitator for Monetary Policy: The fiscal and monetary policy of a contry has greater impact on its economic development, and a well-developed banking system is pre-reqisite for sccessfl implementation of the monetary policy. Promoting Capital Formation: Banks are the reservoirs of capital providing loans to the individals and bsiness. Pooling of financial resorces and formation of capital is encoraged by banks by way of deposits and other activities. This capital is tilized by entrepreners and contribtes for the economic development of the contry. Encorages Innovation: Entreprenership and Innovation go hand-in-hand. Banks encorage entreprenership by attractive credit, which empowers them towards innovation. Monetization: The coining of crrency or printing of banknotes is done by the central bank. In other words; banks are the manfactrers of money which is important for the economy. Inflence Economic Activity: Banks inflence the rate of interest in the money market throgh its spply of fnds. It can inflence a monetary policy with lowinterest-rates which will tend to stimlate economic activity. Banking sector has become so important that the absence of banking indstry leads to stagnation in economic development of the contry, the savings wold sit idle in or homes, the entrepreners wold not be in a position to raise money, innovation of new prodcts or bsiness models will get affected. Ordinary people having dreams of new car or hose will not be able to prchase-which will affect atomobile and real estate bsiness. 1.2 Indian Banking Indstry & Service Qality The banking indstry is facing rapid changes in the market, sch as: new technologies, economic ncertainties, fierce competition, more demanding 315

8 316 CH. 1 : INTRODUCTION cstomers and the changing climate which lead to an nprecedented set of challenges. Banking is a cstomer oriented service indstry which has witnessed a radical shift in the market power. The effectiveness and efficiency became the bzzword of the sccess of banking operations and its proper fnctioning particlarly with respect to providing services to the cstomers. Service is an invisible thing which is indispensable from the person who extends it. An efficient or effective service is one which is extended appropriately by identifying and nderstanding the needs of the individal cstomer from time to time. Cstomer service is a dynamic interactive process which needs continos improvement. With the advancement of information technology and commnication system, the whole world has been redced to a global village. The cstomers at the present jnctre are well exposed to nstoppable innovations in commnication technology. He/she is aware of the kind of service level available arond the world and ths expects the best from his/her bank. Cstomer service is not only a critical fnction bt plays a vital role for the bsiness. It is the next most important bsiness strategy. The improved cstomer service will definitely increase profitability. A bank can be said as cstomer oriented if its varios organizational activities like organizational restrctring, staffing, and coordination are geared p to flfil the needs of cstomers. Dring the past two decades or so, reglatory, strctral and technological factors have significantly changed the banking environment in India. In a milie which becomes increasingly competitive, service qality as a critical measre of organizational performance contines to compel the attention of banking instittions. The interest is largely driven by the realization that higher service qality reslts in cstomers satisfaction and loyalty, greater willingness to recommend to someone else, redction in complaints and improved cstomer retention rates In the era of globalization and liberalization, economic reform has become an imperative to remain in the main stream of global economy. In this regard, banking sector being the backbone of the economy cannot maintain stats qo. It is legitimately feared that the privileged stats, which banks enjoyed for the last three decades, has already been changed with the entry of new players in the form of private and foreign banks. Under these circmstances, the banks will have to face pronged challenges to retain the existing cstomers and to create new cstomers. However, sccess rate depends on the innovative strategies adopted by the banks inclding better cstomer services and adeqate flfilment of cstomer expectations. Ths, cstomer satisfaction is qite a complex isse and there is a lot of debate and confsion abot what exactly is reqired and how to go abot it. 1.3 Importance of Service Qality in Banks Increased competition, highly edcated consmers, and increase in standard of living are forcing many bsinesses to review their cstomer service strategy. Many bsiness firms are channelling more efforts to retain existing cstomers rather than to acqire new ones since the cost of acqiring new cstomer is greater than cost of retaining existing cstomers. There is enogh evidence that demonstrates the strategic benefits of qality in contribting to market share and retrn on investment. Maximizing cstomer satisfaction throgh qality cstomer service has been described as the ltimate weapon by Davidow and Vital (1989). According to them, in all indstries, when competitors are roghly matched, those with stress on cstomer s service will win. In view of the above mentioned facts, an analysis of service qality perceptions from cstomer s point of view may be sond and interesting at this jnctre. Sch an analysis will provide banks, a qantitative estimate of their services being perceived with intricate details sch as whether banks are meeting the expectations of the cstomers or not. 1.4 Measring Service Qality in Banking Sector Cstomer is vital for the development of trade, indstry and service sector particlarly in financial services. Therefore, the significance of cstomer service in the banking sector came to force to compete in a market driven environment. Measring service qality in the service sector particlarly in the banking sector is more difficlt than measring the qality of manfactred goods. The service sector as a whole is very heterogeneos and what is heterogeneos may hold tre for one service and may not hold for another service sector. Each bank is having a variety of services. De to this differentiation, services in this indstry cold not be standardized, moreover these services are intangible in natre which cold not be compared or seen.

9 CH. 1 : INTRODUCTION 317 The concept of cstomer satisfaction and service qality is interrelated with each other. Moreover satisfaction of cstomer depends pon service qality and service qality is increasingly offered as a strategy by marketers to position themselves more effectively in the market place. De to the advent of e-banking, qality of service has been improved a lot as compared to traditional banking services. Internet banking, Mobile banking, atomated teller machine, electronic fnd transfer has totally changed the way of providing services by the banks. 1.5 Service Focs Areas of Banking Indstry There are a variety of services like retail banking, corporate banking, investment banking, commercial banking, personnel banking, wholesale banking, internet banking etc. Electronic Banking and Service Qality As cstomers become more sophisticated, therefore, it becomes essential to consider the se of technology to respond to their continos needs. Banking is an indstry highly involved with the cstomers. Cstomers in developing economies seems to keep the technological factors of services as the yardstick in differentiating good & bad services and the hman factor the employees seem to play a lesser role in discriminating the qality of service for banks. The variations in services offered by the banks develop excellence for service qality. Banking is no longer regarded as bsiness dealing with money transaction alone, bt it also seem as a bsiness related to information on financial transaction. Cstomers at the corporate level or at retail level have always been important for the banks. As electronic banking is becoming more prevalent, level of cstomer satisfaction is also changing the scenario of technological environment. Informational technology in the form of e-banking plays a significant role in providing better services at lower cost. Several innovative IT based services sch as Atomated Teller Machine (ATM), Internet banking, Smart Cards, Credit Cards, Mobile banking, Phone banking, Anywhere-Anytime banking have provided nmber of convenient services to the cstomer. So as the service qality improves, the probability of cstomer satisfaction increases. Increase satisfaction in trn increases the mtal nderstanding, cstomer retention and a bond of trst between cstomers and banks. The banks which are providing these services on a wider scale to cstomers are more repted in the eyes of cstomers. Bt at the same time technology based prodct is different in pblic and private sector banks. Bank atomation and electronic banking is fast in private sector comparative to pblic sector. E-banking is an improvement over traditional banking system becase it has redced the cost of transaction processing, improved the payment efficiency, financial services and also has improved the banker-cstomer relationship. The relationship between e-banking and service qality can be stdied with the level of satisfaction. E-banking plays a pivotal role in giving satisfaction to the cstomers becase e-banking fills the gap between the expected and perceived service qality. So in order to fill this gap, banks shold find ways of making electronic services more accessible and by allowing the cstomer to verify the accracy of the e-banking transactions. There are nmber of reasons de to which cstomer satisfaction on accont of e-banking has improved. The reasons are as follows; 1. Cstomer can withdraw fnds, transfer fnds anytime, anywhere they want. 2. Accessibility has been extended throgh technological development as it allows cstomers to do bsiness from their home and office. 3. It makes the banking activities and transaction very simpler to nderstand 4. There is no reqirement of direct control with bank, as services can be operated wherever cstomer wants. 5. It has redced the waiting time of the cstomer; 6. Availability of employees at all times is not reqired as these services are provided 24 hors a day, seven days a week. 7. Internet based services has enabled the corporate and retail cstomers to transact from home, office and travelling. 8. Online fnd transfer has enabled the cstomer to transfer fnds from one bank to another or within the same bank at same time. 9. Commnication, interaction between the bank and cstomer has been improved de to e-banking.

10 CHAPTER-2 Service Qality Service Qality is a bsiness administration term sed to describe achievement in service. It reflects both objective and sbjective aspects of service. The accrate measrement of an objective aspect of cstomer service reqires the se of careflly predefined criteria. The measrement of sbjective aspects of cstomer service depends on the conformity of the expected benefit with the perceived reslt. This in trn depends pon the cstomer s imagination of the service they might receive and the service provider s talent to present this imagined service. 2.1 Dimensions of Service Qality A cstomer will have an expectation of service determined by factors sch as recommendations, personal needs and past experiences. The expectation of service and the perceived service reslt may not be eqal, ths leaving a gap. Ten determinants which may inflence the appearance of a gap were described by Parasraman, Zeithaml and Berry: Competence is the possession of the reqired skills and knowledge to perform the service. Cortesy refers to factors sch as politeness, respect, consideration and friendliness of the contact personnel; consideration for the cstomer s property and a clean and neat appearance of contact personnel. Credibility refers to factors sch as trstworthiness, believability and honesty. It involves having the cstomer s best interest at heart. It may be inflenced by company name, company reptation and the personal characteristics of the contact personnel. Secrity represents the cstomer s freedom from danger, risk or dobt inclding physical safety, financial secrity and confidentiality. Access refers to approachability and ease of contact. Commnication mean both informing cstomers in a langage they are able to nderstand and also listening to cstomers. A company may need to adjst its langage for the varying needs of its cstomers. Information might inclde for example, explanation of the service and its cost, the relationship between services and costs and assrances as to the way problems are effectively managed. Knowing the cstomer means making an effort to nderstand the cstomer s individal needs, providing individal attention, recognizing the cstomer when they arrive and soon. Tangibles are the physical evidence of the service, for instance, the appearance of the physical facilities, tools and eqipment sed to provide the service; the appearance of personnel and commnication materials and the presence of other cstomers in the service facility. Reliability is the ability to perform the promised service in a dependable and accrate manner. Responsiveness refers to the willingness of employees to help cstomers and to provide prompt timely service. 2.2 Service Qality: Conceptalization and Operationalization Qality is a concept which reqires a concern both in prodcts as well as in services. Experts have defined it as, fitness for se, conformance to reqirements, freedom from variation etc. To market a prodct, qality plays a pivotal role to sell a prodct. In fact, qality is considered as the most important factor that inflence on the bying behavior of the cstomer. In tangible goods like prodcts, qality can be measred by its drability and nmber of defects, sage of prodct, packaging, handling etc. However measring the qality in intangible is a different one. As services are intangible so they are very difficlt to measre. Services have a lot of intangible dimensions like commnication, credibility, secrity, competence, reliability, responsiveness which are qalitative by natre and their vale is sbjective. Service qality is an abstract and elsive constrct becase of 4 niqe featres of services viz,: 1. Intangibility (Bateson, 1977) 2. Heterogeneity (Booms and Bitner, 1990) 318

11 CH. 2 : SERVICE QUALITY Inseparability (Carman &langeard, 1980) 4. Perishability (Stanton, J. William 2004) Services are those economic activities that typically prodce an intangible prodct sch as edcation, entertainment, food & lodging, transportation, insrance, trade, government, finance, real estate, medical, repair & maintenance etc. Intensified competition and dereglation has led many services and retail bsinesses to seek profitable ways to differentiate them. One strategy that has been related to sccess in these bsinesses is the delivery of high service qality. So service qality has become a significant research topic in past decade de to high revenes, increased cross sell ratios, higher cstomer retention, prchasing behaviors and expanded market share. An analysis of service qality literatre sggests for nderlying themes: (a) It is more difficlt to evalate than qality of tangible goods. (b) Evalation of qality is not made solely on the otcome service; they also involve the evalation of the process of service delivery (Parasraman, Zeithamal& Berry, 1985). (c) Service cannot be separated from the creator of service. These are created, consmed and dispensed at the same time. (d) Althogh the services are intangible bt throgh visalization, association, physical representation and docmentation; intangibility of the services can be improved. 2.3 Literatre Review 1. Impact of Service Qality in Commercial Banks on the Cstomers Satisfaction: An Empirical Stdy, October 2011.By: Dr. S. Fatima Holy Ghost; Dr. M. Edwin Gnanadhas Service qality is important mainly in the service bsiness enterprises. Growth and development of the enterprise majorly depends on the service qality. As service qality is the only way to satisfy majority cstomers, enterprises concentrate more on the service qality today. Qality in service is also interrelated to other behavioral otcomes of the cstomers. The stdy nderstands the varios cstomer perceptions abot the service qality factors like Assrance, Empathy, Responsiveness, Reliability and Tangibility in the banking indstry and the satisfaction level towards the banks. It also analyses the impact of these service qality factors on the satisfaction level based on the demographic differences. The stdy collects the perceptions abot the varios service qality factors throgh prposive sampling method and analyses the impact of the service qality factors. The data were collected on the basis of the varios demographics like, rral rban area, edcation standards, income level, occpation difference, age grops etc. And finally, stdy concldes saying abot the existence of a close bond between the service qality factors and the cstomer satisfaction level. And also it is fond that the impact of the service qality factors on cstomer satisfaction was varying with the demography of the cstomers. 2. Cstomer perception on Service Qality in Banking sector: with Special Reference to Indian Private Banks in Moradabad Region, Febrary 2012.By: Vibhor Jain, Dr Sonia Gpta, Smrita Jain This stdy was condcted to nderstand the perception of service qality in the banking sector and also to evalate how it helps in enhancing the reptation and attract cstomer loyalty. With the increased competition among the private sector banks, this stdy wold help in defining a strategy to achieve the competitive edge and also satisfied cstomers. And hence service qality has been sed to position the banks in the togh market. The stdy was administered throgh the private banks like ICICI, HDFC, KOTAK& INDUSIND BANKS. The stdy has taken the SERVQUAL tool for measrement of the service qality offered by the private players in the banking indstry. The main assmption is Service qality is mlti dimensional concept and these dimensions help in measring the service qality. The responses were collected based on the five dimensions namely, assrance, reliability, responsiveness, tangibility and empathy. The stdy identifies that Reliability and Responsiveness are the most relevant factors for the service qality perception and they have compared the individal scores with the average mean vale scored by the private banks nder the stdy. The stdy fond that among the for banks nder the stdy, HDFC bank has the highest qality perception in terms of the varios dimensions, thogh there is only one branch of this bank located in Moradabad. It is followed by ICICI, KOTAK & INDUSIND. The stdy concldes with sggestions for the private banks to be very competitive in the indstry.

12 320 CH. 2 : SERVICE QUALITY 3. Service Qality Delivery and Its Impact on Cstomer Satisfaction in the Banking Sector In Malaysia, October 2010.By: Jayaraman Mnsamy, Shankar Chelliah and HorWaiMn The stdy focses on the measrement of the cstomer satisfaction throgh delivery of service qality in banking sector in Malaysia. And it highlights the parameters in banking indstry for improvement in delivery of service qality. And also gives a snapshot of some appropriate methods that have been sed for the measrement of cstomer satisfaction. The methodology followed was data collection from random respondents of the general poplation. Considering the fact that different grop of people from different backgronds have different expectation level, a large respondent poplation was targeted for the research. The qestionnaire was collected from 117 respondents from different backgronds. The stdy fond that assrance has a positive relationship with cstomer satisfaction, bt withot significant effect. Reliability is the timeliness and accracy in service provided, and says reliability does not have mch impact on cstomer satisfaction. Tangibles inclde the appearance of the company, and the stdy fond that it has high positive correlation with cstomer satisfaction. The stdy says that there is no mch relation between empathy and satisfaction. Responsiveness is the timely response, which the cstomers get from their service providers. The stdy sggests that responsiveness factor is highly related to cstomer satisfaction. 4. Effect of Service Qality On cstomer Satisfaction with Bank Nagari Main Branch Padang, November 2011.By: Heryanto, Lectrer of the University of Ptra Indonesia, West Smatra The objective of the stdy was to nderstand the inflence of service qality on cstomer satisfaction on the main branch of Bank Nagari. The stdy focses on how the inflence of service qality affects the satisfaction of the banking cstomers of the Bank Nagari, Padang. The sample size taken for the stdy is 100 savings cstomers of the bank. Data was collected from the poplation by accidental random sampling techniqe. A simple Regression model is fitted to the data. The paper defines the varios dimensions of the service qality like Responsiveness, Reliability, Tangibility, Assrance and Empathy. And the Cstomer satisfaction factors like Speed, Accracy, Safe, Save, and Comfort. The characteristics of the respondents were considered based on their demographic profiles like sex, age, income, occpation etc. And the profile perceptions abot the service qality and the cstomer satisfaction were analyzed from the indicators of the same. Service qality has 17 indicators and Cstomer satisfaction has 12 indicators. The varios indicators of both the service qality and cstomer satisfaction are measred sing the scores from the qestionnaire given to the sample poplation on a 5- Level Likert Scale. And then the regression model was estimated sing SPSS tool. From the analysis, the stdy concldes that there is a significant relation between the service qality and the cstomer satisfaction. And service qality is very important and consists of actions like qick response, commitment, staff availability, right service fat right time, complaint soltion, competency and capability of the staff in the bank. 5. Measring Service Qality in Retail Banking Sector in Context of Gjarat, Janary 2012.By: Parmita Mehta, Marwadi Edcation Fondation s Grop of Instittions, Rajkot The main objective of the stdy is the measrement of the service qality in the banking sector. Segmentation of the cstomers based on their perception abot the high and low service qality factors and identifying the relation between both, find the importance of varios dimensions of service qality and its inflence on cstomer satisfaction. For the stdy, 1 pblic sector bank, 3 private banks & 2 co-operative banks were chosen. To nderstand the relationship between the two segments of the cstomers, chi sqare was sed. The stdy also defines the varios dimensions of service qality and ses regression analysis to nderstand the relative importance between the dimensions. The sample poplation was conted to be total 293 respondents from 6 banks sing prposive sampling and personal interview was condcted. To perform segmentation analysis, the cstomers were classified based on their service qality scores. The report fond that the type of accont held by the cstomer has more inflence on the service qality segments. Hence the stdy sggests that the type of

13 CH. 2 : SERVICE QUALITY 321 accont is a significant demographic variable in measring the service qality perception. Mltiple regression analysis was carried ot to analyze the relative importance of the varios dimensions inflencing the 1. Overall service qality 2. Overall cstomer satisfaction 3. Loyalty intention 4. Likelihood of recommendation The stdy concldes saying that reliability dimension has the highest shortfall and assrance shows the lowest, when compared with cstomer expectations. And also sggests that type of accont is a significant variable in profiling the two segments. 6. How do service qality perceptions contribte in satisfying Banking Cstomers?, December By: Prof. Dr. Mhammad Ehsan Malik, Dean IBA, University of Pnjab, Lahore (Pakistan). Basharat Naeem, Lectrer at IBA, University of Pnjab, Lahore (Pakistan). Zona Arif, Stdent of MBA, University of Pnjab, Lahore (Pakistan). The title of the stdy itself defines the objective, service qality perception s contribtion in cstomer satisfaction. The research hypothesis is that clients sing retail banking services with favorable perceptions of service qality dimensions will experience higher satisfaction. Data collection was done from the banking cstomers from government, international and privately held banks in Lahore, Pakistan. Service qality was assessed in both ways based on Wang et al s and Parasraman et al. The overall satisfaction was measred sing a 1-5 Likert Scale. Mltiple regression analysis was carried ot to assess the srvey responses. Descriptive statistics like mean mediation was calclated for all dependent and independent variables. From the findings, the stdy concldes that not all SERVQUAL dimensions have the role in boosting the satisfaction level of the banking cstomers in context with Pakistan. Also says assrance has higher contribtion than reliability. The stdy has more implications on the banking practioners in Pakistan. The stdy findings also spport the positive relationship of service qality with satisfaction as fond by Dagger et al. The stdy concldes that the relationship between service qality and satisfaction varies becase of the variability of the service qality dimensions. 7. Cstomer s perception of service qality of State Bank of India A Factor Analysis By: Dr. Mrs. G. Santhiyavalli, Department of Commerce, Avinashilingam Deemed University of Women, Coimbatore, India, September 2011 The objective of the stdy is to evalate the service qality of the SBI in Coimbatore area. The stdy wold also help in nderstanding of the cstomer perception of service qality in selected branches of SBI and also the major factors responsible for the cstomer satisfaction. The stdy was performed for dration of 6 months covering five branches at R.S Pram, Saibaba Colony, Singanallr, Race Corse Road and Ganapathy road. SERVQUAL techniqe was sed in the stdy sing 22 variables nder the dimensions, tangibility, reliability, responsiveness, assrance & empathy. Gap Analysis was sed to find the shortfalls in the dimensions of service qality of the banking service. The variables for data collection, sed in the stdy are the demographic variables like age, gender, edcational qalification, marital stats occpation and annal income. Primary data was collected from the e-banking cstomers of the branch throgh a qestionnaire with 22 statements nder the five dimensions. Convenience sampling was sed to select the sample respondents. 250 responses were received and the responses were captred on a 7 Likert scale. Reslts of the stdy shows that most of the cstomers fall in the range of agree and partially agree for the services offered by SBI. As the gap scores were less for Assrance, the cstomers are satisfied with secrity aspects and Empathy has the highest gap score, which implies the dissatisfaction of the cstomers. Factor analysis condcted clearly indicates that the five dimensions Assrance, Empathy, Tangibility, Reliability and Responsiveness are the major factors inflencing the cstomer satisfaction. 8. The Key Determinants of Internet Banking service qality: A content Analysis, Jly 2011.By: Minjoon Jn, Associate Professor, New Mexico State University, USA.ShaohanCai, Doctoral Candidate, New Mexico State University, USA. The objective of the stdy is to nderstand the cstomer perceptions on the internet service qality, the varios dimensions associated with the satisfaction. The stdy

14 322 CH. 2 : SERVICE QUALITY focses on the varios isses associated with the internet banking service qality. The stdy identified 17 dimensions of service qality, which are classified as Cstomer service qality, banking service prodct qality, online systems qality. The varios incidents happened with the cstomers were content analyzed. The stdy discsses abot the main for dimensions for cstomer service qality as Access, Cortesy, Responsiveness and Reliability. Critical Incident Techniqe (CIT) was sed in the stdy to identify the key indicators of the Internet banking Service Qality. Incidents were collected from varios organizations that access internet banking services for the day to day process. The stdy identified the attribtes for Cstomer service qality like reliability, responsiveness, credibility, competence, cortesy, access, commnication, nderstanding the cstomer, collaboration & continos improvement based on focs grop discssions. The last two attribtes collaboration and continos improvement has been identified niqely by the athors of this paper. It briefly discsses abot the attribtes collaboration and continos improvement with case stdies from the cstomer experiences. The stdy concldes saying that; any initiative for qality shold begin with defining the cstomers. Identification and measrement of the cstomer expectations will help banks in assessing their service qality. 2.4 Understanding the Literatre Review Sl Stdy Year of Objective Methodology Otcomes No. Pblishing 1 Impact of October To Understand the Srvey method, data collection 1. The existence of close Service 2011 varios cstomers from the cstomer based on bond between the service Qality in perception abot the varios demographics like rral- qality factors and cstomer Commercial service qality factors rban area, edcation standards, satisfaction level.2. The Banks on the and satisfaction level income level, occpation impact of service qality Cstomers towards the banks. deference, age grop etc factors on cstomer s Satisfaction: satisfaction varies with the An Empirical demography of the cstomer. Stdy. 2 Cstomer Febrary To nderstand the Srvey method, data collection 1. Reliability and perception 2012 perception of service based on SERVQUAL tool for Responsiveness are the on Service qality in banking and to measrement of service qality. most relevant factors for Qality in evalate how it helps in service qality perception. Banking enhancing the reptation 2. HDFC Bank has the sector: with and cstomer loyalty. highest qality perception in Special Banks nder the stdy terms of all the dimensions Reference to are HDFC, Kotak, ICICI followed by ICICI, Kotak and Indian Private and IndsInd. IndsInd. Banks in Moradabad Region. 3 Service October Measrement of cstomer Srvey method, data collection 1. The stdy fond that Qality 2010 satisfaction throgh from random respondents of assrance factor has a Delivery and delivery of service qality general poplation. positive relationship with Its Impact on in banking sector cstomer satisfaction. Cstomer Malaysia.Highlights the 2. Reliability factor does not Satisfaction parameters for measre- have mch impact on in the ment of service qality cstomer satisfaction, as it is Banking and cstomer the timeliness and accracy Sector in satisfaction. in service provided. Malaysia. 3. Tangibility factor has higher positive correlation with cstomer satisfaction. 4. There is no relation between empathy and satisfaction.

15 CH. 2 : SERVICE QUALITY 323 Sl Stdy Year of Objective Methodology Otcomes No. Pblishing 5. Responsiveness is highly related to cstomer satisfaction. 4 Effect of November To nderstand the Srvey method, data collection 1. There is a significant Service 2011 inflence of service from poplation by accidental relation between service Qality On qality on cstomer random sampling techniqes. qality and cstomer cstomer satisfaction on the main Simple regression model is fitted satisfaction.2.and it consist Satisfaction branch of Bank Nagari. to the data.varios indicators of actions like qick with Bank are measred on a 5 level Likert response, commitment, staff Nagari Main scale and Regression model availability, right service at Branch was estimated sing SPSS right time, complain Padang. Tool. soltions, competency and capability of the staff in the bank. 5 Measring Janary Measrement of service Srvey method, data collection 1. Reliability dimension has Service qality in the banking was done from 1 pblic sector the highest short fall and Qality in sector.segmentation of bank, 3 Private Sector banks assrance factor has the Retail cstomers based on the and 2 cooperative banks.chi lowest.2.type of accont is Banking perception abot the high sqare was sed to nderstand significant variable in profiling Sector in end and low service the relationship between the two the two segments. Context of qality factors and segments of the cstomers. Gjarat. identifies the relation between the both. 6 How do December To nderstand how Srvey Method, data collection 1. Not all SERVQUAL service service qality was done from the banking dimensions have the role in qality perceptions contribte in cstomers in Government, boosting the satisfaction level perceptions satisfying the banking international and Privately held of the cstomers in contribte in cstomers in Lahore- banks. Pakistan.2. Assrance has satisfying Pakistan. higher contribtion than Banking Reliability.3. The Stdy Cstomers? spports the positive relationship of service qality with satisfaction as fond by Dagger et al.4. The relationship between service qality and satisfaction varies becase of variability of the service qality dimension. 7 Cstomer s September To evalate the service Srvey method, data collection 1. The gap score were less perception 2011 qality of SBI in from 5 branches selected for for assrance, while highest of service Coimbatore area.and to the stdy, based on, varios for the empathy factors. qality of nderstand the cstomer demographic like age, gender, 2. Factor analysis indicates State Bank perception of service edcational qalification, marital that the five dimensions of India A qality in selected stats, occpations and annal assrance, empathy, Factor branches of SBI and also income.22 variables were taken tangibility, reliability and Analysis the major factors nder the dimensions, tangibility, responsiveness are the responsible for cstomer reliability, responsiveness, major factors inflencing the satisfaction. assrance and empathy. Gap cstomer satisfaction. analysis was sed to shortfalls in the dimensions of service qality. 7 point Likert scale was sed.

16 324 CH. 2 : SERVICE QUALITY Sl Stdy Year of Objective Methodology Otcomes No. Pblishing 8 The Key Jly To nderstand the The stdy focsed on the varios 1. Any initiative for qality Determinants cstomer perception on isses associated with the shold begin with defining of Internet internet service qality, internet banking service qality. the cstomers. Banking the varios dimensions The stdy identified Identification and service associated with the dimensions classify as cstomer measrement of the qality: satisfaction. service qality, banking service cstomer expectation will A content prodct qality, online systems help banks in assessing their Analysis. qality. Content analysis wasservice qality. the approach. It has been observed, throgh above stdies, that the qality of the banking sector is one of the most researched topics yet opening scope for researchers to frther probe. These stdies sally se Parasraman s SERVQUAL scale to measre service qality or consmers overall satisfaction. According to this scale, qality defines a gap between perceived expectations (E) and performance (P) and if the performance exceeds expectations the consmer will attain more satisfaction.(lehman, 2001). These expectations are based on one s own and others experiences. Most service sector literatre focs pon the static models (Parasraman, Zeitham& Berry, 1985, 1988, 1993; Babaks& Mangold,1992; Cronin & Taylor, 1992, 1994; Bolding, Kalra& Stealing 1993; Johnson &Ferstl, 1999). However, one needs to remember that there are also some researchers who work with a dynamic framework as well (Kopalle& Lehman 2001; Kara, Tarým&Zaim, 2003). Hence the stdy on the qality of the banking sector in Banglore district was ndertaken. It has been observed throgh these stdies that several factors affect the qality of banks.

17 CHAPTER-3 Research Methodology As service qality reflects the way the banks are performing, this stdy attempts to explore the perception of cstomers in respect to the services provided by the banks. The entry of private and foreign banks, the natre of fnctioning of these banks and the promotional attempts of these banks has changed the landscape of the Banking sector in India. In respect to cstomer services there are notable perceived differences. Hence this stdy on cstomer service qality of Indian banks looks for bringing ot the differences between perceptions of cstomers of these banks. This stdy is descriptive and analytical in natre. 3.1 Objectives The stdy has been ndertaken with regard to the following objectives: (a) To identify degree of importance attached to varios dimensions of service qality viz. reliability, responsiveness, empathy, tangibles and assrance by the cstomers. (b) To compare the pblic, private and foreign banks on the basis of cstomers expectations and perceptions of qality of services. (c) To find the gap between cstomers expectations and perceptions of qality of services for pblic, private and foreign banks. (d) To nderstand the perception of the employees of pblic, private and foreign banks and find ot the challenges faced by them to deliver expected services (d) To evalate the performance of pblic, private and foreign banks on the basis of qality of services. (e) To make sggestions for improvement of qality of services in pblic, private and foreign banks. 3.2 Hypotheses for the Stdy The main hypotheses that have been set for the stdy are: Hypothesis 1 H0: Service qality rating is independent of variables sch as age, gender, employment, income, city, bank in which accont is held, type of bank, type of accont and dration of accont held H1: Service qality rating is not independent of variables sch as age, gender, employment, income, city, bank in which accont is held, type of bank, type of accont and dration of accont held Hypothesis 2 H0: The servqal gap is same in Delhi, Kolkata, Pne and Bangalore. H1: The servqal gap is not same in any two places. Hypothesis 3 H0: The servqal gap is same in private, pblic sector and foreign banks. H1: The servqal gap is not same in any two types of banks. 3.3 Sorces of Data The stdy relies on both primary as well as secondary data. The sorce of the secondary data is drawn from Reserve Bank of India pblications and the sites of the banks to which respondents are cstomers. Varios jornal articles have been referenced for nderstanding the backgrond of the stdy. For obtaining primary data, a strctred qestionnaire is designed to collect data from cstomers of Banks. The qestionnaire consisted of for parts. Part A had 26 statements on 6 dimensions to measre the expectations of the cstomers. Part B consisted of the profile of the cstomers; Part C had 26 statements on 6 dimensions to measre the perception of the cstomers of the banks. Part D had open ended qestions to avail insights into the perceptions of the cstomers. The responses for the statements in Part A and C were measred on a likert scale of servqal tool. An interview schedle is prepared to collect data from Bankers. In depth interviews are condcted with the help of the interview schedle. 3.4 Sampling Method The sampling method sed is proportionate stratified Random Sampling. The total sample size is 600. This 325

18 326 CH. 3 : RESEARCH METHODOLOGY sample comprises of 150 respondents of each of for cities namely Delhi, Bangalore, Kolkata and Pne. Again ot of 150 cstomers of each city, 50 respondents are cstomers of each category of pblic, private and foreign bank respectively. Ot of 50 cstomers of one city of each type of bank, not less five cstomers belong to each occpation. 30 bank employees across all the banks where the respondents have their accont have been chosen as the sample to obtain bankers perspective. 3.5 Data Analysis The data is analyzed by finding the mean scores of the varios servqal dimensions both for expectations and perceptions. Sch mean scores are compared with each other to find the gaps between expectations and perceptions. The service qality gaps of cstomers of varios types of banks across cities are compared. Frther these gaps are cross tablated with the profile of consmers. ANOVA has been sed to test the hypotheses. 3.6 Scope of the Stdy The stdy encompasses cstomer service qality of all three types of banks namely private, pblic and foreign banks of for cities in India each located at varios regions in India. The stdy covers respondents both cstomers of banks and bankers. The cstomers belong to varios professions, varios places, of both genders, with varied income grops and varied age grops. 3.7 Limitations of the Stdy 1. The stdy is limited to the stdy of expectations and perceptions of cstomers having an accont in private, pblic or foreign banks. 2. The perceptions and expectations of cstomers are limited to the time period of the stdy. 3. The perceptions of the bankers are limited only to the place of stdy. 4. The stdy is limited only to for cities of India namely, Delhi, Bangalore, Kolkata and Pne. Chapter Scheme Chapter 1: Introdction This chapter discsses the role of banking indstry in India and its contribtion to the economic development of the contry, the indstry is facing rapid changes sch as new technology, economic ncertainties, competition and demanding cstomers, to meet the above challenges banks need to focs on improving the service qality, the importance of service qality in banks is discssed in this chapter. Chapter 2: Service Qality This chapter discsses the dimensions of service qality viz. reliability, responsiveness, empathy, tangibility and assrance. An in-depth literatre review on service qality and cstomer satisfaction has been presented. Chapter 3: Research Methodology This chapter presents a well strctred research methodology which acts as a ble print for the entire stdy. Chapter 4: Respondents Profile This chapter depicts the profiles of 600 respondents, who are the cstomers of banks residing in for cities namely Bangalore, Delhi, Kolkata, Pne. The srvey has captred data from cstomers of 23 different banks in India. Chapter 5: Cstomer Service Qality Compared with Respondents Profile This chapter gives insights of cstomer service qality rating across categorical variables. The analysis is done sing descriptive statistics like mean, nmber of respondents and the standard deviations. ANOVA has been sed to test the hypothesis to establish relationship between the cstomer service qality rating and the categorical variables. Chapter 6: Cstomers Perception of Qality of Bank Services This chapter presents the analysis of cstomers perception on five dimensions of service qality viz. reliability, responsiveness, empathy, tangibility and assrance. Chapter 7: Analysis of Service Qality Gaps This chapter presents the analysis of service qality (SERVQUAL) gaps perceived by cstomers regarding the services provided by varios banks in India, the gap between expectations and perception of consmers on 5 dimensions, Reliability, Assrance, Empathy, Responsiveness and Tangibility are measred. Chapter 8: Banker s Perception of Cstomers Service Qality This chapter discsses the banker s perception of qality of service provided to the cstomers. Analysis is

19 CH. 3 : RESEARCH METHODOLOGY 327 based on the data collected from the Bank employees on varios parameters. Chapter 9: Findings, Conclsion and Sggestions This chapter presents the findings of the stdy and gives sggestion to improve the service qality of the banks, which will enable them to cope with the challenges faced by banking indstry.

20 CHAPTER-4 Respondents Profile The cstomers of Banks residing in for cities namely Bangalore, Delhi, Kolkata, Pne were respondents to the srvey. The data has captred cstomers of 23 different banks. The profiles of the cstomers is described below: 4.1 Type of Bank : Three categories of Bank namely Pblic sector, Private sector and Foreign Banks are stdied: The following table shows the nmber of respondents from each category of Bank TABLE 1: Type of Bank Type of Bank Percentage Freqency Pblic Sector 33.3% 200 Private Sector 33.3% 200 Foreign 33.3% 200 Total 600 Sorce: Field data Ot of 600 respondents, an eqal nmber of 200 respondents (33.33%) from three types of Banks namely Pblic Sector Bank, Private Sector Bank and Foreign Banks were administered the qestionnaire. 4.2 Location of the Cstomers: As mentioned earlier cstomers had acconts in either of the for cities as below: TABLE 2: Location of the Cstomers City Percentage Freqency Pne Kolkata Delhi Bangalore Sorce: Field data For cities were selected for the condct of this srvey, 150 Respondents were selected as sample from each of the cities. Each city constittes 25% of the total sample respondents. 4.3 Gender of Cstomers: The following table shows the composition of cstomers who have responded for the srvey TABLE 3 : Gender of Cstomers Particlars Freqency Percentage Male Female Total Sorce: Field data Ot of 600 respondents 65 % are male and 35% are female. Age Grop of Cstomers: For the stdy, cstomers who are above the age grop of 18 years were considered. The following table shows the distribtion of cstomers across varios age grops: TABLE 4 : Age Grop of Cstomers Age Grop Percentage Freqency years 22.50% % % % % 54 > 65 years 8.00% 48 Total Sorce: Field Data 30.8% of Cstomers belonged to the age grop 25 to 34 years. The second largest grop of 22.5% belonged to the age grop of years is 22.50%, 21.20% cstomers belonged to the age grop of years, 8.50% belonged to years, only 9% were in the age grop of 55 64, and abot 8% belonged to the age grop above 65 years. 328

21 CH. 4 : RESPONDENTS PROFILE Annal Income of Cstomers: The following table shows the annal income of the cstomers who responded for the srvey TABLE 5 : Annal Income of Cstomers Particlars Freqency Percentage less than 1 lakh lakhs lakhs lakhs lakhs More than 15 lakhs Total Sorce: Field data 19.7% of the respondents have annal income less than Rs. 1 lakh, whereas a big No. of 38.2% of the respondents are in the bracket of Rs.1 lakh to 2.5 lakh, 16.7% of the respondents in the bracket of Rs lakh, 9.7% of the respondents in the bracket of Rs.4-10 lakh, 9.3% of the respondents in the bracket Rs lakh and 6.5% of the respondents have more than Rs.15 lakhs annal income. 4.5 Occpation of Cstomers: The following table shows the occpation of the cstomers who responded for the srvey TABLE 6 : Occpation of Cstomers Particlars Freqency Percentage Employed Professional Bsiness Stdent 53 8 Retired 42 7 Homemakers 32 5 Total Sorce: Field data 38% respondents are employed, 27% respondents are professional,15% respondents are Bsiness, 8% respondents are stdent,7% respondents are retired and 5% respondents are homemaker. Ot of 600 respondents, we fond that majority of 229 (38%) are employed and least nmber of 32 respondents (5%) are homemakers. 4.6 Cstomers Bank : The following table shows the composition of Banks inclded in the srvey TABLE NO. 7 : Cstomers Bank Freqency Percentage SBI HDFC HSBC Axis ICICI Citi SC Kotak Mahindra IDBI Bank of Baroda Pnjab Pblic Sector bank Canara bank Others Total Sorce: Field Data 15% respondents are from SBI, 12.5% respondents are from HDFC, 9.3% respondents are from HSBC, 9.2% respondents are from Axis, 9% respondents are from ICICI, 8.7 % respondents are from Citi, 7% respondents are from Standard Chartered, 5.5% respondents are from Kotak Mahindra,4.2% respondents are from IDBI, 2.3% respondents are from Bank of Baroda, Pnjab Pblic Sector Bank and Canara bank, 25.33% respondents are from other banks (2% respondents are from RBS, 1.8% respondents are from YES, 1.5 % respondents are from UCO, 1.3% respondents are from ABN and Syndicate Bank, 1.2% respondents are from Union Bank of India and OBC, 1% respondents are from Corporation Bank, 0.5% respondents are from Allahabad Bank, 0.3% respondents are from Karnataka Bank & Bank of India and 0.2 % respondents are from Central Bank of India). Ot of 600 respondents, a maximm of 90 respondents are holding an accont in SBI and the least nmber of accont holders is in central bank of India.

22 330 CH. 4 : RESPONDENTS PROFILE 4.7 Types of Accont : The following table shows for types of acconts of the respondents TABLE NO. 8 : Accont type of Respondents Particlars Freqency Percentage Savings accont Crrent Deposit accont Loan accont Total % respondents are having savings bank accont, 17.7% respondents are Crrent accont holders,10.7% respondents have Deposit accont and 7.2% respondents have Loan Accont. Ot of 600 respondents, a maximm nmber of 387 respondents are having savings accont and a least nmber of 43 respondents are having loan accont. 4.8 Dration of accont : The below mentioned table shows the period for which the accont was held by the respondents. 67.8% respondents have an accont for less than 3 years, 22.5% respondents have their acconts between 4-8 years, 4.3% respondents have accont for 9-15 years, 5.3% respondents have accont for more than 15 years. Ot of 600 respondents, a majority of 407 respondents have an accont from past 3 years and 32 respondents is the least nmber and are having an accont from last 15 years. 4.9 Smmary Profile of Respondents: The total nmber of respondents to whom we contacted in the for cities i.e. Bangalore, Delhi, Kolkata and Pne across the three types of banks i.e. private sector, Pblic sector and Foreign banks, is 600. Of the total respondents, 65% are male respondent and female respondents constitte 35%. The majority of the respondents (30.8%) belong to the age grop of and the least nmber of respondents (8.00%) belong to the age grop of above 65 years. It is observed that 73% belong to an age grop less than 44 years. Majority of them (38.2% ) are earning an annal income of Rs.1 lakhs to Rs.2.5 lakhs. Most of them are employed and the large grop constitting 64.5% holds savings bank accont. TABLE NO. 9 : Dration of accont Particlars Freqency Percentage 0-3 years years years more than 15 years Total

23 CHAPTER-5 Cstomer Service Qality Compared with Respondents Profile The following analysis explains the cstomer service qality rating across categorical variables sch as age, gender, occpation, income, city, type of bank, bank in which accont is held, dration of accont held and the type of accont held by cstomers. The tables given below gives the descriptive statistics like mean, nmber of respondents and the standard deviations. ANOVA has been sed to test the hypothesis to establish relationship between the cstomer service qality rating and the categorical variables. 5.1 Cstomer Service Qality Rating distribted across age grops Age Mean N Std. Deviation less than 25 years more than 65 years Total Service Qality Rating by Cstomers of different Age Grops less than 25 years more than 65 years The mean scores of service qality rating by cstomers is more or less the same across all age grops. There is no mch difference in the perception of cstomers of varios age grops. However, the satisfaction level of cstomers in the age grop of more than 65 years was the highest with the mean score of 3.83 and the lowest satisfaction was of those cstomers who belonged to the age grop less than 25 years. Frther the ANOVA test which was rn on the data also shows that there is no significant relationship between age and the service qality rating of cstomers. 5.2 Cstomer Service Qality Rating distribted across Gender Gender Mean N Std. Deviation Male Female Total

24 332 CH. 5 : CUSTOMER SERVICE QUALITY COMPARED WITH RESPONDENTS PROFILE male female There is considerable variation observed in the ratings given by cstomers belonging to varios occpational grops. Homemakers who were the least nmber who responded expressed least satisfaction of the cstomer service qality of banks. Bsiness class has given a high rating to the qality of banking services. This probably may reflect that banks are serving the Bsiness classes better with premim services. The maximm nmber of respondents was employed and their mean score of satisfaction was The satisfaction level of cstomers in respect to service qality was rated higher by female cstomers as compared with male cstomers. This is also reflected in the standard deviation the No. of male respondents were more in nmber and the data dispersion was greater than the data dispersion of the female cstomers. 5.3 Cstomer Service Qality Rating distribted across occpational grops Occpation Mean N Std. Deviation Employed Professional Bsiness Stdent Retired Homemakers Total Cstomer Service Qality Rating distribted across Income grops Annal Income (Rs.) Mean N Std. Deviation less than 1 lakh lakhs lakhs lakhs lakhs More than 15 lakhs Total

25 CH. 5 : CUSTOMER SERVICE QUALITY COMPARED WITH RESPONDENTS PROFILE 333 A significant observation is that cstomers with income of more than Rs.15 lakhs have expressed a very high level of satisfaction to the services of Bank. Banks probably focs more on the high networth individals and bsiness classes. Hence the rating is 4.12 on 5. Respondents with incomes of Rs.10 to 15 lakhs and Rs.2.5 to 4 lakhs have a satisfaction score higher than the average mean score. The lowest rating is given by the cstomers with income less than Rs.1 lakh income. These respondents are 118 in nmber. The ANOVA reslts also show that there is a significant relationship between the service rating and the income of the cstomers. 5.5 Cstomer Service Qality Rating distribted across Cities City Mean N Std. Deviation Pne Kolkatta Delhi Bangalore Total The mean satisfaction score in Delhi is highest. The three cities Delhi, Bangalore and Kolkatta have means above the average. Pne reveals a score which is less than the average. However, the contrast is that when the servqal gaps are stdied, it is identified that the servqal gaps in Pne are lesser than that is other cities. The ANOVA comptations have revealed that there is a significant relationship between the service qality rating and the cities. 5.6 Cstomer Service Qality Rating distribted across Banks Name of Bank Mean N Std. Deviation SBI IDBI HSBC STANDARD CHARTERED ICICI HDFC CENTRAL BANK KARNATAKA BANK UNITED BANK OF INDIA BANK OF INDIA BANK OF BARODA ALLAHABAD BANK PUNJAB NATIONAL BANK ABN AXIS KOTAK MAHINDRA SYNDICATE BANK

26 334 CH. 5 : CUSTOMER SERVICE QUALITY COMPARED WITH RESPONDENTS PROFILE Name of Bank Mean N Std. Deviation UCO BANK CORPORATION BANK CANARA BANK YES BANK CITI BANK The cstomer service qality rating has been very high in case of private banks and low in case of pblic sector banks. However, when we observe the servqal gaps there is no mch difference between the three types of banks. ANOVA reslts on testing relationship between service qality rating and type of Bank has revealed that there is a significant relationship between the two. OBC BANK RBS BANK Total The above table clearly indicates the standardization of most of the services by Banks in India. All the banks have gained satisfaction score of above 3 from its cstomers. However, the average score is 3.65 and there are atleast 7 Banks which fall less than the average. Srprisingly, Canara Bank, a pblic sector bank is rated highest amongst all the banks nder stdy. Foreign Banks like Citi Bank and ABN Amro have also gained good credit from its cstomers with mean satisfaction score like 4.12 and However, it can also be attribted to respondents size from each Bank. 5.7 Cstomer Service Qality Rating based on type of bank in which accont is held Type of a bank Mean N Std. Deviation Pblic sector bank Foreign bank Private sector bank Total

27 CH. 5 : CUSTOMER SERVICE QUALITY COMPARED WITH RESPONDENTS PROFILE Cstomer Service Qality Rating distribted across dration for which accont is held Dration of accont Mean N Std. Deviation 0-3 years years years more than 15 years Total The table reveals that higher the dration of the accont held by cstomers, higher is the satisfaction. Cstomer service qality is rated high by those cstomers who have held the accont for more than 15 years, whereas, those who have held for 4-8 years have given a score of The ANOVA comptation has not revealed any significant relationship between the period of accont and cstomer service qality. 5.9 Cstomer Service Qality Rating distribted across type of accont held by cstomers Accont type Mean N Std. Deviation Savings accont Crrent Deposit accont loan accont Total Hypothesis to Test Independence of Service Qality Rating from Categorical Variables H0: Service qality rating is independent of variables sch as age, gender, employment, income, city, bank in which accont is held, type of accont and dration of accont held. H1: Service qality rating is not independent of variables sch as age, gender, employment, income, city, bank in which accont is held, type of accont and dration of accont held. Reslts of the ANOVA Test sed to establish Relationship of service qality rating with Categorical variables Independent Variable F Statistic P Vale Significance At 5% Acceptance of Hypothesis Age Not significant H0 is accepted Gender Not significant H0 is accepted Employment Significant H1 is accepted Income Significant H1 is accepted City Significant H1 is accepted Name of the Bank Significant H1 is accepted

28 336 CH. 5 : CUSTOMER SERVICE QUALITY COMPARED WITH RESPONDENTS PROFILE Independent Variable F Statistic P Vale Significance At 5% Acceptance of Hypothesis Type of Bank Significant H1 is accepted Dration of Accont Not significant H0 is accepted Accont type Significant H1 is accepted From the above table, it is broght ot that cstomer service qality rating varies with categorical variables like employment, income, city, name of the bank, type of bank and the type of accont. However, cstomer service qality rating does not vary with age, gender and dration of accont.

29 CHAPTER-6 Cstomer Perception of Qality of Bank Services 6.1 Analysis of Perception Cstomer Service Qality To assess the cstomer service qality, cstomer perceptions on five dimensions were captred. The following chart presents the overall perception of the three different kinds of banks and the analysis of cstomer perception based on each dimension Thogh the cstomer perception of the services on five dimensions namely reliability, empathy, responsiveness, tangibility and assrance have an average ranging from 3.3 to 3.6, there are differences in the perception of the Banks. Foreign Banks gain attention here, that they are rated high by the cstomers in all the service qality parameters. Pblic sector banks have been rated second in all parameters except that of Responsiveness and private banks stands the last in all the parameters. 6.2 Reliability The following graph shows the mean scores of perception of cstomers on Service Reliability 337

30 338 CH. 6 : CUSTOMER PERCEPTION OF QUALITY OF BANK SERVICES Consmer Perception of Service Reliability The mean scores range from 3.35 to This shows that there is reasonably a fair perception of service reliability of the Banks. However following observations are made In case of Pblic sector Banks, online reliability is higher (3.7), followed by reliable information (3.64), error free service (3.5), consistent performance (3.465) and qick and prompt services (3.365). In case of Foreign Banks, online reliability is higher (3.7) followed by consistent performance (3.61). Bank provides reliable information (3.59), error free service (3.525) and qick and prompt services (3.48). In case of Private sector banks, reliable information is higher (3.595) followed by consistent performance (3.465), online reliability (3.435), qick and prompt (3.38) and error free service (3.35). Interpretation: Among all the parameters nder reliability it is fond that the perception towards online reliability has been highly rated by the cstomers irrespective of the type of bank. The least rated parameter is qickness and promptness in handling the services, this rating holds good for all the types of banks. Another observation is that private sector banks are rated low for all the parameters and foreign banks are rated high for all the parameters in reliability. 6.3 Empathy The following graph shows the perception towards cstomers on Empathy

31 CH. 6 : CUSTOMER PERCEPTION OF QUALITY OF BANK SERVICES 339 Consmer Perception of Empathy while providing Bank Services The Mean scores on empathy ranges from to showing average to good performance by Banks in being empathetic to cstomers while providing Bank services Consmer perception on Empathy Parameters In case of Pblic Sector Banks, Banks are empathetic by keeping working hors most sitable to cstomers which has a mean score of 3.59, followed by located in a place convenient to cstomers (3.54), employees are willing to help (3.505), nderstanding needs of cstomers and responding accordingly (3.459) and employees show sincere concern towards cstomers (3.39). In case of foreign banks, willing to help is higher (3.505), followed by nderstanding needs (3.62), sitable working hors (3.61), sincere concern (3.59) and conveniently located (3.225). In case of Private Sector Banks, banks are considered to be more empathetic by keeping working hors most sitable to cstomers and, therefore, it is higher with a mean score of 3.57 followed by employees nderstand needs of cstomers (3.475), sincere concern (3.435), Willing to help (3.43) and conveniently located (3.31). Interpretation From the above graph, we cold see that the bank employee s natre of willing to help cstomers is rated high in case of foreign banks, while showing sincere concern in solving cstomer problems related to bank operations remains the least in case of pblic sector banks. On the other hand private sector banks hold a least score on both the above parameters compared to foreign banks.

32 340 CH. 6 : CUSTOMER PERCEPTION OF QUALITY OF BANK SERVICES 6.4 Responsiveness The following graph shows the profiles of the Responsive parameters: Consmer Perception of Responsive Parameters The Mean scores on responsiveness ranges from 3.31 to 3.83 showing good performance by Banks in being responsive towards cstomers qeries while providing services. Consmer perception on Responsive Parameters For Pblic Sector Banks, ot of 5 variables tested, Cstomer spport services provided by the banks is higher with a mean score of 3.53, followed by easy location of the bank and elimination of errors with a score While responding qickly and making the cstomers wait for a lesser time comes next with a mean score of 3.37 and 3.31 respectively. For Foreign Banks, cstomer spport services provided by the bank is rated high with mean score of 3.83, followed by qick response by the employees with a score of 3.56, and ease of locating the bank and less waiting time for availing the services holds mean score of 3.46 and 3.45 respectively. For Private Sector Banks too, cstomer spport services are highly rated with the mean score of 3.57, followed by Less waiting time for getting the services with the mean score of 3.55, convenient location with the mean score of 3.39 and qick response on the cstomer qeries with the mean score of Interpretation: Considering all three types of banks, it is clearly nderstood that the cstomer spport services provided by the banks remain the highest responsiveness parameter. When we talk abot the waiting time for the services, private banks holds the first place followed by foreign and pblic sector banks. Bt in terms of qick response to the cstomers, the observation is qite different. Foreign bank comes first in hand, followed by the pblic sector banks providing qick response than the private sector banks. 6.5 Assrance The following graph shows the perception of the Assrance provided in giving services by banks:

33 CH. 6 : CUSTOMER PERCEPTION OF QUALITY OF BANK SERVICES 341 Consmer Perception of Assrance Parameters The mean score for assrance in providing the service to the cstomers is 3.26 to 3.81, which is a good score showing the assrance provided by the banks to the cstomers. Consmer perception on Assrance Parameters For Pblic Sector Banks ot of 5 variables tested, Knowledge of the employees in the operations is high with a score of 3.81, followed by trstworthiness & safety assrance on varios services with a score 3.76, feeling secred with online banking service with a score of 3.615, process exection time and kindness & politeness of the employees comes with a least score of 3.54 and 3.48 respectively. For Foreign Banks safety assrance on services is higher with a mean score of 3.775, followed by kindness and politeness of the employees with a mean score of 3.76, process exection time with a score of 3.675, Trstworthiness with a score of 3.63, knowledge of the employees in the operations and feeling secred with online banking service is low scored with mean score of 3.6 and For Private Sector Banks safety assrance is rated high with a mean score of 3.505, followed by trst worthiness with a mean score of 3.5, knowledge of the employees in the operation is of 3.45, kindness and politeness of the employees with a mean score of 3.425, and feeling secred with online banking services and process exection time is rated low with a score of 3.315,3.26 respectively. Interpretation It is very interesting to know that ot of all parameters on assrance, pblic sector banks are rated high for the knowledgeable employees held within. While the assrance for the process exection time is least rated in case of private sector banks. Overall, Pblic sector banks show more credits towards the assrance factor compared to the foreign and private banks.

34 342 CH. 6 : CUSTOMER PERCEPTION OF QUALITY OF BANK SERVICES 6.6 Tangibility The following graph shows the profiles of Tangibility parameters: Consmer Perception of Tangibility Parameters The mean score for the tangibility factor ranges from 3.27 to 3.7, which is a moderately agreeable score for the banks. Consmer perception on Tangibility Parameters For Pblic Sector Banks, ot of 5 variables tested, favorable location of the bank is the highest with a mean score of 3.7, which is followed by the availability of eqipment visally appealing layot of the banks with mean score 3.565, then comes the professionally dressed employees with a score of 3.55 and lastly comes the attractive printed material with a least mean score of For Foreign Banks, availability of eqipments and the professional dressing of the employees scores high with 3.7 and scores respectively. Whereas, attractive printed material provided by the banks scores Lastly comes the central location and the visal appealing layot of the banks scores the least with and 3.51 respectively. For Private Sector Banks availability of eqipment is higher with mean score of 3.525, followed by visally appealing layot with mean score of 3.51, central location of the banks with score of 3.495, and professional dressing of the employees and attractive printed material scores least score of 3.41 and Interpretation Central location of the banks and employees professional way of dressing is considered to be the top scorer in terms of tangibility parameters. Visal appearances of pblic sector banks rank highest, while both the private and foreign banks are considered at the next same level.

35 CHAPTER-7 Analysis of Service - Qality Gaps This stdy aimed at bringing ot the service qality gaps perceived by cstomers regarding the services provided by varios Banks in India. These gaps were captred on varios dimensions of service qality as given in the servqal tool developed by Parasraman et.al. Parasraman, Zeithaml and Berry (1985, 1988) posited and operationalized service qality as a difference between consmer expectations of what they want and their perceptions of what they get. Based on this conceptalization and operationalization, a service qality measrement scale called SERVQUAL was proposed. According to the servqal tool, service qality be measred based on the gap between expectations and perception of consmers on 5 dimensions, Reliability, Assrance, Empathy, Responsiveness and Tangibility. In this stdy, cstomer service qality gaps on five dimensions of qality of three types of Banks namely pblic sector Banks, private sector banks and foreign banks located in for different cities is analyzed. 7.1 Servqal Gaps Identification of Gaps (Expectation Vs. Perception) in cstomer service qality (parameter-wise gaps) Reliability, Assrance, Empathy, Responsiveness and Tangibility The above graph captres the servqal gap score of cstomer service qality on overall gap dimensions. The gap score is the difference between the mean score of perceptions and the mean score of expectation. We observed that responsive gap is higher (0.957), followed by reliability gap (0.897), empathy gap (0.863), assrance gap (0.831) and tangibility gap (0.684). The reliability test for the five dimensions was carried ot by compting the chronbach alpha vale. The chronbach alpha vale is shows a very high degree of reliability. Interpretation The tangibility dimension (Location, Employees dressing, Printed materials, Availability of eqipment & visally appealing layot) holds a least servqal gap between the cstomers expectations and perceptions. It is very obvios that irrespective of the type of bank, the gap between the cstomers expectations and 343

36 344 CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS perceptions on the responsiveness dimension (Cstomer spport, less waiting time, ease of location and qick response) is the highest. This show, of all the dimensions of service qality, banks are lagging behind in being responsive to cstomer reqirements. However, the gap scores on reliability, assrance and empathy dimensions seems to be more or less the same. It is advisable that the banks shold focs more on Responsiveness dimension to win the cstomers. Banks also have to look into aspects like reliability, assrance and empathy in delivering their services. Banks have created enogh tangible ces to impress pon the cstomers. 7.2 Servqal Gaps for each Dimension Reliability Gap Varios statements which measres perceptions and expectations of cstomers in respect to reliability of Bank services were captred and the gap pertaining to each statement was analyzed. The following graph shows the gaps in each of the statement concerning reliability. Gaps on varios statements pertaining to Reliability of banking services The below graph captres the servqal gap score of cstomer service qality on reliability dimension. We observe the qality gap in respect to providing qick and prompt services is highest with a servqal gap score of -1.08, followed by providing error free service (-1.01), reliable information on the operations (-0.98), consistency in performance (-0.9) and online reliability (-0.68). Interpretation The average servqal gap score of reliability was fond to be , which is a moderately high. While considering the varios parameters nder the dimension reliability, like reliable online services, consistency in performances, providing reliable information and providing services as promised, qick & prompt and error free services, it is very obvios that the banks have high servqal gap score in providing qick and prompt services and providing error free services to the cstomers. Hence, the banks in India, are lagging behind in providing a reliable qick and error free services. The service qality cold be improved when the reliability on the bank services are enhanced with more cstomer expectations. Empathy Gap Five Statements which reflect empathy in banking services were asked to cstomers to give their expectations and perceptions. The differences in the expectations and perceptions of cstomers have been reflected in the following graph:

37 CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS 345 Gaps on varios statements pertaining to Empathy in Banking services The above graph captres the gap score of cstomer service qality on empathy dimension. It is observed that sincere concern of the employees is higher (-1.08), followed by their willingness to help cstomers (-0.88), their sitable working hors (-0.77), nderstanding cstomer needs (-0.75) and convenient location of the bank (-0.7). Interpretation The average mean gap score for the dimension empathy was fond to be The empathy parameters like the employee s sincere concern towards the cstomers, their willingness to help and their nderstanding of the cstomer needs has great impact on the dimension, which lies within the interest of the employee. While the other two parameters like the convenient location of the banks and sitable working hors have a comparatively less effect on the dimension. Becase these are areas where the management takes the control. Hence, it is necessary that those employees who interface the cstomers irrespective of the banks, shold be able to nderstand the cstomer s needs from their point of view, so that they can flfil the cstomer expectations. Responsiveness Varios statements which measres perceptions and expectations of cstomers in respect to banks responsiveness of services were captred and the gap pertaining to each statement was analyzed. The following graph shows the gaps in each of the statement concerning responsiveness.

38 346 CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS Gaps on varios statements pertaining to Responsiveness of Banking services The above graph captres the servqal gap score of cstomer service qality on responsiveness dimension. It is observed that qickness in locating and eliminating errors is high (-1.08), followed by lesser waiting time for services (-1.06), qick response for cstomer qeries (-0.98) and necessary cstomer spport (-0.72). Interpretation The average mean gap score for Responsiveness was fond to be The parameters like finding errors & eliminating them and the process waiting time in the banks take a major part in defining the dimension responsiveness. And cstomer spport services and their qick response to cstomer qeries also had to be taken care of to improve the service qality, irrespective of the banks. Hence, it is very conditional that the banks take continos efforts in qickly locating and eliminating the errors, however, cstomers waiting time for availing the services remains to be in the hands of the employees, provided all processes are carried ot systematically. Assrance Varios statements which measres perceptions and expectations of cstomers in respect to banks assrance of services were captred and the gap pertaining to each statement was analyzed. The following graph shows the gaps in each of the statement concerning assrance.

39 CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS 347 Gaps on varios statements pertaining to Assrance in Banking services The above graph captres the servqal gap score of cstomer service qality on Assrance dimension. It is observed that assred exection time is high (-0.9), followed by kind and politeness of the employees (-0.89), trstworthiness (-0.82), knowledge of the employees (-0.82), feeling secred (-0.81) and safety assrance (-0.74). Interpretation The average mean gap score for the dimension Assrance was fond to be It can be observed that the process exection time and kind & politeness of the employees are noticeable factors contribting to the average Assrance gap. The other parameters like knowledge of the employees in the operations, trstworthiness of the employees, feeling of secrity on the bank and safety assred by the banks have comparatively lesser gaps than the above mentioned. Hence, it advisable that all the banks concentrate on working within the promised process exection time and also improvises the employee s soft skills. Tangibility Varios statements which measres perceptions and expectations of cstomers in respect to banks tangibility of services were captred and the gap pertaining to each statement was analyzed. The following graph shows the gaps in each of the statement concerning tangibility.

40 348 CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS Gaps on varios statements pertaining to Tangibility of Banking services The above graph captres the gap score of cstomer service qality on tangibility parameter. It is observed that visally appealing layot of the bank and the availability of necessary eqipment has a high gap score of (-0.72), followed by central location of the bank (-0.70), the availability of attractive printed materials (-0.67) and the employees professional dressing manner (-0.60). Interpretation The average servqal gap score for the dimension Tangibility was fond to be , which shows very obvios that the availability of the necessary eqipments and the visal appealing layot of the banks needs to be considered for frther improvements, so that Banks will be more appraised by the cstomers. 7.2A Comparison of Servqal Gaps in For Cities in India The service qality gaps were compared across the following for cities Delhi, Kolkata, Pne and Bangalore.

41 CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS 349 The above graph captres the servqal gap score of cities on overall gap dimensions. We observed that gap is higher in Delhi (1.027), followed by Bangalore (0.996), Kolkata (0.738) and Pne (0.622). Interpretation: It cold be clearly interpreted that smaller city like Pne has the lesser gap compare to other cities like Bangalore, Delhi and Kolkata. The observation infers that the metro cities have mch service qality gap than the tier 1 & 2 cities. It s qite shocking that the metros lag behind in delivering qality service to the cstomers than the smaller cities. The banks in metros need to improve on the qality of the services. Hypothesis Testing for Eqality of Mean Servqal Gap in Pne, Kolkata, Delhi and Bangalore H0: The mean servqal gap is same in Delhi, Kolkata, Pne and Bangalore. H1: The mean servqal gap is not same in any two places. ANOVA Overall Servqal Gap between for cities Sm of df Mean F Sig. Sqares Sqare Between Grops Within Grops Total The hypothesis H0 is rejected since p vale is The mean servqal gap is not same in any two cities. There is significant difference in the mean servqal gap across the cities Pne, Kolkata, Delhi and Bangalore. Frther, the eqality in mean overall gap in two cities taken together is tested and the following table gives the p vales for the test. MULTIPLE COMPARISONS Servqal Gaps against Cities Sig. Pne Kolkata.429 Delhi.000 Bangalore.000 Kolkata Pne.429 Delhi.001 Bangalore.007 Delhi Pne.000 Kolkata.001 Bangalore.997 Bangalore Pne.000 Kolkata.007 Delhi.977 There is no significant difference in mean servqal gap between Pne and Kolkata, between Bangalore and Delhi. The servqal gap score varies significantly between Pne and Delhi, between Pne and Bangalore, between Kolkata and Delhi, between Kolkata and Bangalore. Servqal Gaps in For Cities for Varios Servqal Dimensions

42 350 CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS The above graph captres the servqal gap score of cities on different dimensions. It can be observed that in Pne, responsive gap is highest followed by empathy gap, reliability, assrance and tangibility. In Kolkata responsive gap is highest followed by reliability gap, empathy gap, assrance gap and tangibility gap. In Delhi responsive gap is highest followed by assrance gap, reliability gap, empathy gap and tangibility gap. In Bangalore responsive gap is highest followed by assrance gap, reliability gap, empathy gap and tangibility gap. Interpretation: It is very implicit from the graph that the gap in the varios dimensions does not vary mch with the cities. The crve is more alike for all the cities nder consideration for the stdy. We can also interpret that all banks, irrespective of the cities have to be more responsive in servicing the cstomers. The other actions like being empathetic, reliable and providing service assrance to the cstomers do have a same line of variance with the cities. Table showing the Servqal gaps dimension wise for for cities in India City name Pne Kolkata Delhi Bangalore Reliability Gap Responsive Gap Empathy Gap Tangibility Gap Assrance Gap Gap score Reliability gap is highest Delhi and lowest in Pne. Responsive gap and Empathy gap is more in Bangalore and lowest in Pne. Tangibility gap is highest in Delhi and lowest in Pne. Assrance gap is highest in Bangalore and lowest in Pne. So it is very obvios that service qality gap exist the highest with a metro like Delhi and lowest in a small city like Pne. Hence, it is very crcial that the banks in metro cities concentrate on the gap and enhance their service qality to meet the cstomer expectations. 7.3 Comparison of Servqal Gaps based on different Types of Banks The above graph captres the servqal gap score of Banks on different gap parameters. We observed that in Private sector banks, assrance gap is highest followed by responsive gap, reliability, empathy and tangibility gap. In foreign banks, reliability gap is highest followed by responsive gap, empathy gap, assrance gap and tangibility gap. In Pblic sector banks, assrance gap is highest followed by responsive gap, reliability gap, empathy gap and tangibility gap.

43 Comparison of servqal gaps of three types of banks CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS 351 The above graph shows the comparison of the servqal gaps of the three types of bank. We can find that the graph is almost similar for all three types of banks. Tangibility gap is lowest and responsiveness gap is highest in all the type of banks. And also we find that the crve is mch favorable for the pblic sector banks having not mch difference in the servqal gap scores on different dimensions. Hypothesis Testing to conclde if there is Significant difference between the Servqal Gaps of Pblic Sector, Private Sector and Foreign Banks H0: The servqal gap is same in private, pblic sector and foreign banks. H1: The servqal gap is not same in any two types of banks. ANOVA Sm of df Mean F Sig. Sqares Sqare Between Grops Within Grops Total From above table we can conclde that the servqal overall gap is same in private, pblic sector and foreign banks, which means there is no significant difference in the gap across three types of banks. Similarly sing ANOVA, hypothesis was tested if the gap scores of individal dimensions varied from one another. The following table shows the F Statistic and the P Vale for all the dimensions. F statistic P Vale Reliability Responsiveness Empathy Tangibility Assrance The above table shows that at significance level of 5% there is no difference between the gap vales of the parameters across the three types of banks. At 10% significance level tangibility differs between the three types of banks. The hypothesis H0 is not rejected since p vale is 0.221

44 352 CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS 7.4 Servqal Gaps in Varios Banks Compared The above graph shows the servqal gap scores obtained by each bank nder the stdy in the category of Pblic Sector Banks. Interpretation Among 12 pblic sector banks nder stdy Union Bank of India has the highest servqal gap score of , and Corporation Bank has the least servqal gap score of It s very apparent that the pblic sector banks, has a lot many areas for improvement in the near ftre. It shold be taken as a serios concern and worked pon, so that they cold match the other sector banks service qality, especially win back the trst factor associated with the cstomers.

45 CH. 7 : ANALYSIS OF SERVICE - QUALITY GAPS 353 The above graph shows the servqal gap scores obtained by each bank nder the stdy in the category of Foreign Banks. Interpretation: Among the for foreign banks nder the stdy, Citibank has the highest gap score of , and ABN has the least score of , with Standard Chartered and HSBC scoring in between with and respectively. Thogh foreign banks are known for their premim service qality, there are banks with greater gaps as same as the banks nder other categories in India. It s very necessary that the foreign banks concentrate on the service qality as there will always be greater expectations from the cstomers. The above graph shows the gap scores obtained by each bank nder the stdy in the category of Private Banks. Interpretation Among the eight private banks nder stdy, Karnataka Bank has the highest Servqal gap score of , and ICICI has the least score of , with OBC Bank, AXIS Bank, YES Bank, RBS Bank & HDFC Bank scoring in between. The servqal gap scores of the banks nder private sector is comparatively higher than the gap scores of the Banks nder the Foreign bank sector in India. It s advisable that the private banks shold focs more on the service qality in order to keep p with the foreign banks and also to retain their existing cstomers.

46 CHAPTER-8 Bankers Perception of Cstomer Service Qality The expectations and perceptions of the cstomers were broght ot in the previos chapter. There is likeliness that the Bankers perception abot the qality of services delivered to the cstomers wold be different from that of the cstomers. Data collected from the Bank employees of 30 different banks and their perceptions on varios parameters have been smmarized and presented in the following paragraphs: 8.1 Rendering services as promised to its cstomers Pblic Sector Banks Bankers perceive that services are highly credible, cstomers prefer to open new acconts, Cstomers have a confidence in the bank, the promises made by the Banks have been met to a larger extent. Most bankers feel that the Pblic Sector banks provide world class services to its cstomers. They offer better prodct & service portfolio to their cstomers in order to create a big credibility. They also feel that the Pblic Sector banks perform to a higher degree compared with other banks. Bankers also say that they have incorporated information technology in their day-to-day operations to provide services. A few say that the time management is efficiently practiced in their banks Foreign Banks Majority of the bankers feel that foreign banks are delivering services to the cstomers as promised. Foreign banks also believe that they work in a disciplined and prompt way. It is also to be noted that foreign banks serve HNI cstomers to a large extent in a very prompt way. Private Banks Private Bankers revealed that they also provide services as promised in a well-disciplined manner. Interestingly, it can also be fond that the bank employees are better eqipped & trained for service delivery. Also it has been seen that no. of cstomer complaints have decreased gradally & banks are adding new cstomers on reglar basis. Private banks perceive that they have good credibility factor similar to that of Pblic Sector banks. The same parameter measred with cstomers reveal that private sector banks are rated low for all the parameters and foreign banks are rated high for all the parameters in reliability. 8.2 Providing reliable services Provision of reliable service qality is necessary in meeting several reqirements sch as cstomer satisfaction and its conseqent loyalty, attracting new 354

47 CH. 8 : BANKERS PERCEPTION OF CUSTOMER SERVICE QUALITY 355 cstomers and to increase the market share and profitability. Hence, it is necessary to identify and prioritize the cstomers expectations for reliable service and incorporate these expectations into a service process for improving qality. Pblic Sector Bank Bankers strongly feel that pblic sector banks are the most reliable in rendering banking services to its cstomers. They say, that cstomers are dependent on their services, void varios demographics. A few bankers also feel that cstomers have shown greater confidence in Pblic Sector banks as more & more deposits are kept in the form of FDs & also sage of bank lockers. They also revealed that more pension transactions, simple interest fnds, fixed deposits, money for jewel transactions happen consistently. Foreign Banks Foreign bankers are very strong in saying that they were able to offer consistent, reliable services to its cstomers. A few bankers also said that they work pnctally and reglarly, which makes their services completely dependable for the cstomers. Foreign bankers also say that they provide cstomized services depending on the cstomers. Private Banks Most Private bankers feel that they provide the most consistent services to their cstomers. They very strongly feel that cstomers are happy with services offered by their bank & have shown fll confidence. A few private bankers also feel that their cstomers have a good opinion abot their banks as they provide flexible edcation, home loans etc. 8.3 Employees willingness to help cstomers The employee behavior towards the cstomers represents a big challenge till today. The employee interfacing the cstomers delivers the organization s prodcts and services to cstomer and transmits cstomer feedback back to the organization. These relationships inflence the employee and the banks in providing qality service to the cstomers. Pblic Sector Banks Majority of the interfacing employees very strongly feel that they try to nderstand and express their willingness to help the cstomers. They also revealed that the employees are eager to help the cstomers by commnicating in local langages. A few accepted that at times the employees lose control and they yell at the cstomers, depending on the sitation. Foreign Banks All the employees of the foreign banks are very sre in delivering a professional service to their cstomers. Majority of them say that they willingly help the cstomers and nderstand the cstomer reqirements. A very few employees felt that there might be some problem in serving the cstomers in some tier 2 cities. Private Banks The srvey data reveals that majority of the private banks identify cstomer needs and help them with

48 356 CH. 8 : BANKERS PERCEPTION OF CUSTOMER SERVICE QUALITY special interest. A few also say that they help cstomers in filling forms, giving information and other gidelines. Some banks say that they work nder a very calm environment withot any pressre and hence, they easily nderstand the cstomer needs and help them accordingly. 8.4 Employees being caring and providing individal attention to the cstomers All the banks feel that their employees are very caring and give special attention to each cstomer. Some bankers feel that they are having very less nmber of employees, so they are not able to take care of individal cstomer. Some of Pblic Sector Banks feels that their employees provide individal attention to old age peoples, when they visit to collect their pensions or any other services. Some of Foreign Banks feels that their employees are very co-operating and caring towards all cstomers. Most of the Private Banks feels that they give special attention to every cstomer by basic services like filling p the application. Pblic Sector Banks Most of the Pblic Sector Banks feel that their employees are very caring in terms of any services towards the cstomers; they specially give more attention to the old age employees, bt few banks reveal that in order to keep the reptation of the banks, they always take care of the cstomers, and some of the banks feel that they shold have more employees to give individal attention to each cstomer. Foreign Banks Some of Foreign Banks feel that they are caring, cooperative and give individal attention to all cstomers. Few banks reveal that they take cstomer as a brden and flfil their reqirement withot any interest; in fact they do it as their daily dty. On the other hand, few other banks say that they concentrate only on premim accont holder cstomers, and not on all cstomers. Private Banks Almost all the Private Banks feel very prod that they give individal attention and care to their cstomers. Most of the banks say that their employees give individal attention to every cstomer like opening an accont, filling application forms etc. 8.5 Employees knowledge abot bank operations Employee s expertise and knowledge on the bank operations holds a big hand in satisfying the cstomers in terms of service qality. All the banks say that their employees are well qalified and sitably chosen to serve the cstomers. Pblic Sector Banks Most of the Pblic Sector Banks reveal that they recrit only those candidates with a minimm degree qalification, which is a better way to nderstand the service qality. Few other banks also say that they give complsory training to their employees, so that they treat the cstomers as their friend and convey them trst and confidence. A very few banks say that the

49 CH. 8 : BANKERS PERCEPTION OF CUSTOMER SERVICE QUALITY 357 senior most persons in the role are not tech savvy, i.e. they are otdated and do not have mch knowledge abot cstomer relations. Foreign Banks Almost all the foreign banks say that their employees with master s degree have good inter-personal skills in order to deliver services to the end cstomers. Most of the banks have a strctred orientation & training programme even for the experienced employees, so that they can handle the varied needs of cstomers. A few banks also say that their employees are knowledgeable on the basic operations of the banks, which make them easy to convey trst and confidence to their cstomers. Private Banks All the Private Banks nder consideration reflect the same information as shared by the other Pblic Sector & foreign banks. Almost all the banks say that they have knowledgeable and qalified employees that wold convey trst and confidence. Most banks say that they recrit candidates with master degrees from premim schools, in order to maintain a good pool of trained personnel. Private Banks also feel that their employees grasp things qickly and convey confidence and trst to their cstomers throgh the services. 8.6 Physical facilities of the bank and ambience Most of the banks feel that they are having excellent physical facility and attractive ambience in their banks. In these two attribtes, srvey becomes very interesting, i.e, thogh all the pblic sector and private sector banks say that they have good ambience and facilities, they always compare themselves with foreign banks, becase, they feel that the foreign banks always have excellent ambience and physical facilities and perceive that the standard of the foreign banks are always high. Pblic Sector Banks Majority of the pblic banks claimed that their appearance and ambience is attractive to the cstomers. They also say that cstomers like their cleaner environment and parking facilities. A very few pblic sector banks said that they do not have mch attractive ambience in their setp and they look less attractive compare to the foreign banks and need to improve on the infrastrctre. Foreign Banks Majority of the foreign banks are very confident that they have an attractive aesthetics in their banks. They feel that their physical otlook is more exciting and inviting to the cstomers. Majority of the banks are mch implicit abot their interiors and other facilities. Private Banks To talk abot the private banks, most of them are very sre abot their physical appearance and ambience. Majority of them feel that their otlook is as good as foreign banks. The bankers also said that they have a very attractive and welcoming environment for their cstomers. A few also revealed that their banks were

50 358 CH. 8 : BANKERS PERCEPTION OF CUSTOMER SERVICE QUALITY bilt with proper planning for the prpose of serving cstomers. 8.7 Dress and appearance of bank employees All the bankers feel that their employees are neatly dressed, well groomed to look professional. Employees of the bank always wear formal dresses, which looks more professional in the Bank. Most of the pblic sector bank employees dressed traditionally to look professional. In Foreign bank employees have dress code or niform to maintain professionalism. In private sector bank, they feel that it is a basic reqirement to wear formal dresses to look professionals. Pblic Sector Banks In pblic sector banks, they feel that they are very professional in terms of dresses and appearance. They are always well dress and formal dresses to maintain professionalism. Some of the pblic sector banks feel that their employees wear traditional dresses and they have to get pgraded themselves with modern fashion. Foreign Banks In Foreign Banks, for professional look employees always wear sitable dresses. Some of the foreign banks feel that they shold have dress code or niform for entire banking indstry to maintain standard of the bank. Private Banks Most of Private Banks maintains formal dresses to look professional. Some private Bank are very strict abot the employees dressing. They feel that it is the basic necessity for banking profession. 8.8 Three things that cstomers shold appreciate in bank Most of the banks feel that cstomers shold appreciate abot their employees, they are having skills to nderstand cstomers problem and helping them with proper soltions. Banks feel that employees are very well organized and very knowledgeable abot the services. Private Banks feel that cstomer shold appreciate abot their online facility, cstomized services and secrity abot cstomers accont details, which is very trst worthy. On the other hand Foreign Banks feel that their interest rates, procedres of loans, responses given by or employees are appreciable as compared to other Banks.

51 CH. 8 : BANKERS PERCEPTION OF CUSTOMER SERVICE QUALITY 359 What cstomers shold appreciate in the bank (Bankers version)? Pblic Sector Banks Foreign Banks Private Sector Banks Honest, disciplined Trained and trst worthy employees Friendly employees employees Reasonable Interest Bank Reasonable Interest rates performance rates Employee patience Simple Bank Simplified loan and nderstanding procedres procedres levels Pblic Sector Bank In Pblic Sector Banks, employees are honest, disciplined and trst worthy. They feel that their interest rate on loan is reasonable; there is no hidden cost involved, employee s patience level and employees nderstanding level towards cstomers are very high. Foreign Banks In Foreign Banks, they feel that they are having trained employees, their banks performance and bank procedre is very simple and hence, deserves appreciation. They are having variety and choice in services, accessibility and accontability. Private Sector Banks Private Banks feel that their employees are friendly and they are ready to help to the cstomers any point of time, which is very appreciable. They feel that their interest rates are reasonable, loan procedre is simple and banks rles are not very stringent. 8.9 Top three challenges faced to deliver services as expected by cstomers Be it Pblic Sector, Foreign or Private Banks, Qick service comes first and remains as a major challenge. Cstomer s attitde towards the bankers is another considerable deal for the banks. Banking cstomers expect the services to be fast and prompt, which many a time does not happen with the banks and the cstomer s patience level goes down. Cstomer s attitde towards the bankers revamps at this point of time. Bankers also have a feel like; there is a lack of time while providing a particlar service to the cstomers. Another main isse is the langage of commnication between the cstomers and the bankers. Most of them have sensed that they need cstomer s co-operation for effective service in any bank. What are the challenges faced by Banks (Bankers version)? Pblic Sector Banks Foreign Banks Private Banks Qick service High expecta- Qick service tions of cstomers Handling cstomers Non-recovery Making cstomers attitde of loans nderstand rles and reglations Commnication with Maintaining Convincing cstomers cstomers rapport and in loan sanctioning commnication and loan recovery with cstomers Pblic Sector Banks Most of the Pblic Sector Banks feel that they face a big challenge in providing qick service to the cstomers. And the cstomer s attitde changes and is very difficlt to handle. Cstomers get irritated when there is no qality response and qick service. Banks find hardships while commnicating with the cstomers, as there is a langage gap. These banks need to be efficiently trained on a common platform for effective commnication. Foreign Banks When we talk abot the Foreign Banks, it s very prominent that the cstomers have a very high expectation from the bankers. Most bankers feel that recovering loans from the cstomers is a big challenge. And the bankers need to maintain good rapport with the consmers and have effective commnication. Also they say, when it comes to qick service and cstomer friendliness, foreign banks have a less pressre comparatively, becase they are well based on providing qick service and cstomer friendly environment. Private Banks Private Banks find difficlties in delivering Qick Service. They also say that it is very difficlt to make cstomers nderstand the rles and reglations abot the bank withot any confsion. Cstomers lose their patience when they are not given qick response and service. A few other bankers also feel that convincing cstomers for loan sanctioning and loan collecting is another big deal Bankers sggestions to improve the Bank services Most bankers from different banks sggested that there shold be more recritment of staff. They reqire more

52 360 CH. 8 : BANKERS PERCEPTION OF CUSTOMER SERVICE QUALITY employees, especially yong energetic staff to work. Most of the Pblic Sector Banks and a few Private Banks also sggested having more technical advancements in the infrastrctre. Employees shold be trained on technical aspects and behavioral aspects, so that they can provide qick and efficient services to the cstomers. Bankers also felt that they shold have more presence across the nation, to deliver niform qality service to the cstomers. Along with the national level presence, they also felt that the banks need employees with local langage skills. Most of the foreign banks and a few private banks have no sggestions to improve, as they feel that they have a very well defined qality service. What needs to be done to improve Bank Services (Bankers Version)? Pblic Sector Banks Foreign Banks Private Banks Increase staff Training in Recrit local cstomeremployees relations Technological Focs on all Set p branches in improvements segments of rral areas cstomers Yong and skilled Increase Improve technology staff nmber of and infrastrctre Branches Pblic Sector Banks In Pblic sector banks there is shortage of staffs. So recritment shold be done. Technically they need more improvement and also reqired yonger skilled staffs to work. Foreign Banks Foreign Banks employees shold be trained on maintaining cordial relation with every cstomer. Some Foreign banks are focsing only on higher class cstomers; they shold also concentrate on pper middle class. Increase in nmber of branches is sggested by some bankers. Private Banks Some Private Banks feel that they need employees who know local langage in that region. They shold have branches all over India (inclding rban and rral area). Some Private Banks need to improve on technology and infrastrctre.

53 CHAPTER-9 Findings, Sggestions and Conclsion 9.1 Findings on Service qality Rating compared with Respondents profile The satisfaction level of cstomers in the age grop of more than 65 years is highest with the mean score of 3.83 and the lowest satisfaction is of those cstomers who belonged to the age grop less than 25 years. The satisfaction level of cstomers in respect to service qality was rated higher by female cstomers as compared with male cstomers. There is considerable variation observed in the ratings given by cstomers belonging to varios occpational grops. Homemakers respondents who were the least nmber, expressed least satisfaction of the cstomer service qality of Banks. Bsiness class has given a high rating to the qality of Banking services. Banks focs more on the high net-worth individals and bsiness classes Hence satisfaction of high income grop and bsiness class have expressed high levels of satisfaction. A significant observation is that cstomers with income of more than Rs.15 lakhs have expressed a very high level of satisfaction in respect to the services of Bank. Respondents with incomes of Rs.10 to 15 lakhs and Rs. 2.5 to 4 lakhs have a satisfaction score higher than the average mean score. The lowest rating is given by the cstomers with income less than Rs.1 lakh income. The mean satisfaction score in Delhi is highest. The three cities Delhi, Bangalore and Kolkata have means above the average. Pne reveals a score which is less than the average. High degree of standardization of services by Banks in India are fond as the service qality rating has very less variation from one bank to another. Canara Bank, a pblic sector bank is rated highest amongst all the banks nder stdy. Foreign Banks like Citi Bank and ABN AMRO have also gained good credit from its cstomers with mean satisfaction score like 4.12 and The least score is of Union Bank of India. The cstomer service qality rating has been very high in case of private banks and low in case of pblic sector banks. Higher the dration of the accont held by cstomers, higher is the satisfaction. Cstomer service qality is rated high by those cstomers who have held the accont for more than 15 years, whereas, those who have held for 4-8 years have given a score of Cstomer service qality rating varies with categorical variables like employment, income, city, name of the bank, type of bank and the type of accont. However, cstomer service qality rating doesn t vary with age, gender and dration of accont. 9.2 Findings from cstomer perception of varios dimensions Foreign Banks are rated high by the cstomers in all the service qality dimensions. Pblic sector banks have been rated second in all parameters except that of Responsiveness and private banks stands the last in all the parameters. Reliability Online reliability has been highly rated by the cstomers irrespective of the type of bank. The least rated parameter is qickness and promptness in handling the services, this rating holds good for all the types of banks. Another observation is that private sector banks are rated low for all the parameters and foreign banks are rated high for all the parameters in reliability. Empathy Bank employees natre of willing to help cstomers is rated high in case of foreign banks, while showing sincere concern in solving cstomer problems related to bank operations remains the least in the case of pblic sector banks. 361

54 362 CH. 9 : FINDINGS, SUGGESTIONS AND CONCLUSION Responsiveness Cstomer spport services provided by the banks remain the highest responsiveness dimension. With respect to waiting time for the services, private banks holds the first place followed by foreign and pblic sector banks. Assrance Pblic sector banks are rated high for the knowledgeable employees held within, while the assrance for the process exection time is least rated in case of private sector banks. Pblic sector banks show more credits towards the assrance factor compared to the foreign and private banks. Tangibility Central location of the banks and employees professional way of dressing is considered to be the top scorer in terms of Tangibility parameters. Visal appearances of pblic sector banks rank highest, while both the private and foreign banks are considered at the next with same level scores. Findings from Servqal gaps Responsive gap is highest followed by reliability gap, empathy gap, assrance gap and tangibility gap respectively. Irrespective of the type of banks, the gap between the cstomers expectations and perceptions on the responsiveness dimension (Cstomer spport, less waiting time, Ease of location and qick response) is the highest. There is significant difference in the mean servqal gap across the cities Pne, Kolkata, Delhi and Bangalore. The dimensional servqal gaps exhibits a similar pattern for all the cities nder stdy. Service qality gap exist the highest with a metro like Delhi and lowest in a small city like Pne. In Private sector and pblic sector banks assrance gap is highest, In foreign banks reliability gap is highest. There is no significant difference in the gap across three types of banks. At 10% significance level Tangibility differs between the three types of Banks. Among the foreign banks nder stdy, Citi Bank has the highest servqal gap, and ABN has the least servqal gap score. Among the private banks nder stdy, Kotak Mahindra has the highest servqal gap and ICICI has the least servqal gap score. Among pblic sector banks Union Bank of India has the highest servqal gap score and Corporation Bank has the least servqal gap score. 9.3 Findings from Banker s Perception on Service Qality All the three types of banks pblic, private and foreign banks perceive that they are good in all the five dimensions of service qality namely reliability, empathy, responsiveness, tangibility and assrance Three things cstomers shold appreciate in bank In Pblic sector banks, honest, disciplined and trstworthy employees, reasonable interest rates, high employee nderstanding levels are the three things that was highlighted. In Foreign banks, trained employees, better bank performance and simplified procedre are the three things that needs appreciation according to bankers In Private Banks, friendly employees, reasonable interest rates and simple loan procedre are the three top things that need appreciation by cstomers. Top three challenges faced to deliver services as expected by cstomers Pblic sector banks face big challenge in providing Qick Service, handling cstomer attitde and difficlty in commnicating with cstomers. Foreign banks face challenges with regards to high expectations of cstomers, Non-Recovery of loans and maintaining rapport and commnication with cstomers. Private sector banks face challenges in Qick Service, making cstomers nderstand rles and reglations, and convincing cstomers in loan sanctioning and Recovery of loans. Sggestions to improve the Bank services according to Bankers Pblic sector banks sggest: increase hman resorces, hire skilled and yong staff, and bringing technological improvements

55 CH. 9 : FINDINGS, SUGGESTIONS AND CONCLUSION 363 Foreign bank employees sggest: train employees on interpersonal relationships, focs on other classes of society than focsing only on HNI cstomers and increase the nmber of Branches Private sector bank employees sggest: Recrit employees who are well versed in local langage, Increase nmber of branch nation-wide inclding rral areas, Improvement in technology and infrastrctre. 9.4 Sggestions 1. The expectations of the cstomers are on the increase, especially those cstomers who belong to generation Y. Hence banks have to revisit their traditional practices and adapt themselves to satisfy the needs of the yong cstomers. 2. Banks are focsing more on High net worth individals, and bsiness classes, the other cstomer segments have been ignored to a very great extent, reflecting low satisfaction scores from the latter. A conscios effort is needed to work on all the segments and, make every segment profitable. 3. Metro cities satisfaction scores were high bt when we look at individal servqal gaps, the gaps are also high and significant. This shows that there is a need for the bank branches in metros to work on details rather than focsing on the big pictre. 4. Whereas in an pcoming city like Pne, thogh the satisfaction levels are not so high, the gaps are minimal, branches in sch cities will have to work on bigger things which can impress the cstomers apart from the personal relationship that they establish. 5. Pblic sector banks, reliability is high whereas, low on tangibility. Foreign banks reliability is high. Private banks assrance gap is high. Hence, Private and Pblic sector banks have to focs on assrance, whereas Foreign banks have to work on reliability. 6. Professionalism not only speaks abot the way of doing things, bt also takes into accont, the way yo present yorself as a part of the organization. To maintain a standard, it is very essential that the bank follows a dress code with its employees. 9.5 Conclsion Banking sector today has a compelling demand for improvement, to srvive the sbstantial competition in today s scenario. 1. Pblic sector banks are always known for the trst, they have developed with the cstomers and for their existence in the society for a very long period of time. Hence, it is sggested that the pblic sector banks keep the trst factor and improve on the other aspects of service qality. 2. Also it is advisable that the pblic sector banks associate more with the technology and good infrastrctre facilities to provide timely and efficient service to the cstomers. 3. The cstomer needs grow with no limits, and it is very mch evident from the varios service offerings by the other banks day to day. Not jst to rebel the competition with the private and the foreign banks, bt also to retain the existing cstomers, it is very necessary that the pblic sector banks take a charge on this. 4. Foreign Banks try to concentrate on high net worth individals in the society. It is eloqent that they concentrate on all levels of cstomers, which wold give them larger cstomer pool. 5. Foreign banks are well known in the society for their well of infrastrctre and the pdated technology they se. And it apparently reflects a high level of expectation from the cstomers. Hence it is imperative that the foreign banks keep themselves ahead in all the aspects, concentrating on service qality. 6. Irrespective of the banks, employees who interface the cstomers directly, are oght to be very empathetic and shold be able to nderstand the cstomer needs and reqirements. Training the hman resorce in this regards wold help the banks retain their cstomers and also attract more. 7. Cstomer relationship is one another aspect the banks need to be given par importance. Managing cstomer relation efficiently is an advantage that the banks shold concentrate to win the sitation. 8. The banks shold focs on pooling and retention of cstomers. Large database wold create a trst and reliability cltre which wold bring in more and more cstomers. 9. Addressing to the individal cstomer needs is one crcial aspect to be considered, as the cstomer wold find himself as a part of the

56 364 CH. 9 : FINDINGS, SUGGESTIONS AND CONCLUSION organization. This wold bild a good relationship between the bank and the cstomer. 10. Pblicizing the bank in the right area adds vale to the brand. Foreign banks tilize the proper media resorce for promoting their services. It s very important that both the pblic and the private sector banks come forward and se the same to a greater extent. 11. Efficient and knowledgeable employees are always a big boon for any organization. Employees shold be trained on technical and behavioral aspects, so that banks can deliver qick and prompt services. 12. Establishing branches in every possible area wold be a better way to progress. This wold really help banks to create more acconts and give more reach to the banks.

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