SERVICE QUALITY PERCEPTION OF CUSTOMERS

A STUDY UNDERTAKEN AT

INDIAN OVERSEAS BANK, PUTHENCAVU

Project report submitted in partial fulfillment of the requirements for the award of the Degree of MASTER OF BUSINESS ADMINISTRATION 2007-2009 of Mahatma Gandhi University Course Code: CC 435 Submitted By
SMITHA ANNA JACOB Reg. No. 83645

Under the guidance of

DR. ROSHNA VARGHESE Assistant Professor Department of MBA

SAINTGITS COLLEGE OF ENGINEERING DEPARTMENT OF MBA (SIM) KOTTUKULAM HILLS, PATHAMUTTAM P.O,KOTTAYAM-686 532 (Affiliated to Mahatma Gandhi University Approved by AICTE)
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SAINTGITS COLLEGE OF ENGINEERING

Department of MBA (SIM)
(Approved by AICTE and Affiliated to Mahatma Gandhi University)

KOTTUKULAM HILLS, PATHAMUTTOM P.O. KOTTAYAM-686532

Tel. / Fax No.91-481-2430349, 2436169, 2436170, 2435960

E-mail:saintgitsengg@sify.com

CERTIFICATE
This is to certify that the project work titled, Service Quality Perception of Customers A Study undertaken at Indian overseas Bank, is a bonafide record work done by Ms. Smitha Anna Jacob, fourth semester MBA student of Saintgits College of Engineering, Department of MBA(SIM), submitted in partial fulfillment for the award of the Master Degree in Business Administration of Mahatma Gandhi University, Kottayam, Kerala.

Dr. Roshna Varghese (Faculty Guide) Date: Place: Pathamuttom

Dr. (Col.) P.S. James (Head of the Institution)

Examiner I

Examiner II

Signature Name Date

Signature Name Date

CORPORATE OFFICE: III-FLOOR, UNITY BUILDINGS, K.K.ROAD, KOTTAYAM-686002

Tel. / Fax No. 91-481-2584330/2300365 E-Mail:saintgits@sify.com

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DECLARATION
I undersigned hereby do declare that the project report entitled Service Quality Perception of Customers A study undertaken at Indian Overseas Bank prepared and submitted in partial fulfillment of the requirements of MBA Course, awarded by M.G University, Kottayam, is my original work and not submitted for award of any other degree are diploma and the work has not been published in any journal or magazine.

Place: Pathamuttom Date:

Smitha Anna Jacob

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ACKNOWLEDGEMENT
I would like to take this opportunity to express my gratitude to Saintgits Institute of Management for guiding me in the right decision to take this project. I am also grateful to Dr. ( Col.) P. S. James Dean, Saintgits Institute of Management for helping me to do this project and guiding me in the right direction. I extend my sincere thanks to Mr. K.G. Bhuvanendran Branch Manager, Indian Overseas Bank (IOB), Puthencavu, my external project guide who provided whole hearted support and guidance throughout the project. I thank him for all the assistance and cooperation. I also thank all the employees of IOB, for providing me an opportunity and valuable guidance and giving time from their busy schedule. I have great pleasure to express my sincere thanks and indebtedness to my internal project guide Dr. Roshna Varghese for her invaluable guidance and encouragement. She has guided me through each phase of the project helping me to rectify and take corrective actions wherever necessary. I also thank all the faculty members of Saintgits Institute of Management who have helped me to be on the right track and to build a deeper understanding on the topic and for the successful completion of my project. I also thank my family, friends and all those who directly and indirectly helped me in this endeavour.

Smitha Anna Jacob

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[v]

CONTENTS
Title Page No.

Chapter List of Tables List of Figures Executive Summary Chapter 1 Introduction 1.1 Introduction

1-5 1 2 3 4 5 6-15 6 11 16-24 16 21 25-29 25 25 26 27 28 28 28 29

1.2 Statement of the Problem 1.3 Objectives of the study 1.4 Significance of the study 1.5 Chapter Scheme Chapter 2 Industry and Company Profile 2.1 Industry Profile 2.2 Company Profile Chapter 3 Conceptual Framework 3.1 Theoretical Framework 3.2 Literature Review Chapter 4 Research Methodology 4.1 Introduction 4.2 Hypotheses of the study 4.3 Sampling Procedure 4.4 Data Collection 4.5 Variables of Interest 4 .6 Techniques of Data Analysis 4.7 Duration of the study 4.8 Limitations of the study

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Chapter

Title

Page No. 30-77 31 37 59 61 69

Chapter 5 Service Quality Perception - Analysis 5.1 Customer Profile 5.2 Service Quality Parameters 5.3 Overall Customer Perception 5.4 Factors Influencing Service Quality 5 .5 Hypothesis Testing i. ii. ANOVA: Job vs. Satisfaction Level Independent Sample t- test: Gender vs. Satisfaction Level ANOVA: Education vs. Satisfaction Level ANOVA: Age vs. Satisfaction Level

iii.

iv.

Chapter 6 Findings, Suggestions and Conclusion 6.1 Findings of the study 6.2 Suggestions of the study 6.3 Conclusion Bibliography Appendix Questionnaire

78-85 78 82 84 86

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LIST OF TABLES Table No 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 Title Age wise classification of Respondents Gender wise classification of Respondents Job wise classification of Respondents Education wise classification of Respondents Banking Duration of Customers Income wise classification of Respondents Exteriors of the bank is visually appealing Interiors of the Bank Appearance of Employees Spacious Interiors Error free service Confidentiality in Transactions Bank Informs Customers Employees serve customers Employees knowledge Employees Politeness Relationship between Employees and Customers Employees Expertise and Knowledge Level Banks Trustworthiness Queuing time in bank Timeliness of banking services Helping mentality of Employees Individualized attention of Employees Overall Customer Perception Page No. 31 32 33 35 36 37 39 40 41 42 43 45 46 47 49 50 51 52 54 55 57 58 59 60

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Table No 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 5.33 5.34 Tangibility Parameters Reliability Parameters Responsiveness Parameters Assurance Parameters Empathy Parameters

Title

Page No. 62 64 65 66 67 68 71 72 73 74

Overall Service Quality Factors Descriptive Statistics: Job Profile vs Satisfaction Level ANOVA Result: Job profile vs. Satisfaction Level Independent sample t-test: Gender vs. Satisfaction Level Descriptive Statistics : Education Profile vs. Satisfaction Level ANOVA Results: Education Profile vs. Satisfaction Level Descriptive Statistics: Age Profile vs. Satisfaction Level ANOVA Results: Education Profile vs. Satisfaction Level

5.35 5.36 5.37

75 76 77

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LIST OF FIGURES Figure No 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 Title Age wise classification of Respondents Gender wise classification of Respondents Job wise classification of Respondents Education wise classification of Respondents Banking Duration of Customers Income wise classification of Respondents Exteriors of the bank is visually appealing Interiors of the Bank Appearance of Employees Spacious Interiors Error free service Confidentiality in Transactions Bank Informs Customers Employees serve customers Employees knowledge Employees Politeness Relationship between Employees and Customers Employees Expertise and Knowledge Level Banks Trustworthiness Queuing Time in Bank Timeliness of banking services Helping mentality of Employees Individualized attention of Employees Overall Customer Perception Page No. 31 32 33 35 36 37 39 40 41 42 43 45 46 47 49 50 51 52 54 55 57 58 59 60

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EXECUTIVE SUMMARY

The banks are the trusted place of customers and have come across many changes in their functioning. There is a high degree of competition among the banks. In this regard, service quality plays an important role. The banks should bring changes in their functioning. Customer satisfaction is crucial for the future of any banking organisation. The report is based on the customer perception on service quality. It was conducted for Indian Overseas Bank, Puthencavu during the month June and July. The main objective of the study was to identify the satisfaction level of customers on the service quality delivered by the bank. The study was based on SERVQUAL model, a popular service quality model that has been extensively applied. This model consists of 5 main parameters. They are tangibility, responsiveness, reliability, assurance and empathy. The research is mainly based on the primary data collected through scientifically developed questionnaires. The questionnaire was framed on the basis of five dimensions of SERVQUAL model. The questionnaire has been personally administered on a sample size of 60. The sample was selected through random sampling. The collected data were quantified and the customers perception on service quality was assessed. For analysing the data, tools such as t-test and ANOVA were used. From the study, it was found out that the majority of the customers of the bank regards that the service quality of the organization meets their expectations. They are satisfied with the quality of service offered to them. Customers are very much satisfied with the responsiveness expressed by the organization among the all service quality factors.

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CHAPTER 1 INTRODUCTION 1.1 Introduction

Service quality is a concept that has aroused considerable interest and debate in the research literature because of the difficulties in both defining it and measuring it with no overall consensus emerging on either. Service quality can be defined as the difference between customer expectations of service and perceived service. If expectations are greater than performance, then perceived quality is less than satisfactory and hence customer dissatisfaction occurs (Parasuraman et al., 1985; Lewis and Mitchell, 1990). Banking operations are becoming increasingly customer dictated. The demand for 'banking supermalls' offering one-stop integrated financial services is well on the rise. The ability of banks to offer clients access to several markets for different classes of financial instruments has become a valuable competitive edge. With the phenomenal increase in the country's population and the increased demand for banking services; speed, service quality and customer satisfaction are going to be key differentiators for each bank's future success. Thus it is imperative for banks to get useful feedback on their actual response time and customer service quality aspects of retail banking, which in turn will help them take positive steps to maintain a competitive edge. Satisfied customers are central to optimal performance and financial returns. In many places in the world, business organisations have been elevating the role of the customer to that of a key stakeholder over the past twenty years. Customers are viewed as a group whose satisfaction with the enterprise must be incorporated in strategic planning efforts. Forward-looking companies are finding value in directly measuring and tracking customer satisfaction (CS) as an important strategic success indicator.

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With better understanding of customers' perceptions, companies can determine the actions required to meet the customers' needs. They can identify their own strengths and weaknesses, where they stand in comparison to their competitors, chart out path future progress and improvement. Customer satisfaction measurement helps to promote an increased focus on customer outcomes and stimulate improvements in the work practices and processes used within the company. This study is an attempt to determine the customers perception on the service quality delivered by Indian Overseas bank, Puthencavu.

1.2

Statement of the Problem

The banks are the trusted places of the customers, and have come across many changes in their functioning. There is a high degree of competition among the banks. In this regard, service quality and customer satisfaction plays an important role. As a result companies have moved from a product-centric to a customer centric position. Retention is a major challenge, as customers can easily switch from one service provider to another at low cost (Khalifa and Liu 2003). Considering the high costs of acquiring new customers, it is very important to study the determinants of customer satisfaction (Van Riel, Liljander & Jurriens 2001).

There can be a variation in the customer satisfaction level based on the demographic factors such as gender, age, profession etc. The satisfaction of customers belonging to different groups is very vital for the firm as it reflects their business. Thus the study of relevance between satisfaction levels and demographic factors is very much relevant to the organisation.

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Better service quality typically can help to get higher market share and better returns. It is desirable for service providers to uncover what attributes consumers utilized in their assessment of overall service quality and satisfaction and which attributes are more important. All five dimensions of service quality, being tangibles, reliability, responsiveness, assurance and empathy are effective in understanding the perception of the customer regarding the service quality delivered by the firm. The satisfaction level of customers can be determined from their response on the questionnaire regarding five parameters of service quality. For credibility, the response was tested with valid statistical tools such as t-test and ANOVA.

In a nut shell the awareness of service quality perception about the bank will help the bank to

Control and improve performance on the service. Give proper attention to customer needs. Have the competitive advantage of better service quality over the competitors. Attract new customers and retain existing customers.

1.3

Objectives of the Study

The main objectives of the study are To study and analyse the performance of the organisation on the basis of the service quality dimensions. To understand about the overall customer perception on the service quality of the organisation To analyse the influence of demographic factors on service quality

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1.4

Significance of the Study

Service quality can be defined as the difference between customer expectations of service and perceived service. Since expectation serve as a benchmark to gauge the service level of firms, the delivery of services that exceed customer expectations is one strategy that can give a firm a competitive advantage. Therefore, it would seem beneficial for firms in a dynamic economic environment like India, to have a measurement scale to examine its service quality. The services sector has been at the forefront of the rapid growth of the Indian economy, contributing nearly 63 per cent of the GDP in 2007-08. The sector has come to play an increasingly dominant role in the economy accounting for 59.6 per cent of the overall average growth in GDP in the last eight years between 2000-01 and 2007-08. The prospects for growth in the Indian services sector over the next year continues to be robust, according to a survey by KPMG, conducted across the BRIC (Brazil, Russia, India and China) countries in spring 2009. The survey revealed that 31.3 per cent Indian companies saw their activity levels improving. Around 37 per cent forecast new order growth in one years time, compared with 16 per cent that anticipate a fall. Trade, transportation, financial services and software services are the key services of the services sector.

The banking sector of India plays a significant role in the economic development of the country. The size and composition of banking transactions mirror the economic happenings in the country (Vaish, 1978). The banking system in India is the most extensive. The total asset value of the entire banking sector in India is nearly US$ 270 billion. The total deposits are nearly US$ 220 billion. Banking sector in India has been transformed completely. Presently the latest inclusions such as Internet banking and Core banking have made banking operations more users friendly and easy.

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Only little has been done towards on understanding about the satisfaction level of customers on the service hold from their bankers. This project is undertaken to assess the customer perception of the service quality delivered by the bank with respect to each of the service dimension in the SERVQUAL model.

1.5

Chapter Scheme

This report consists of 6 chapters. Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Introduction Industry and Company Profile Conceptual Framework Research Methodology Service Quality Perception - Analysis Findings, Suggestions and Conclusion

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CHAPTER 2 INDUSTRY AND COMPANY PROFILE

This chapter will have details about the banking industry and Indian Overseas Bank inorder to have a clear idea on the industry and the company where this project is conducted. The chapter is divided in to two sections 2.1 2.2 Industry Profile Company Profile

2.1

Industry Profile

Worldwide assets of the largest 1,000 banks grew 16.3 per cent in 2006/2007 to reach a record $74.2 trillion. This follows a 5.4 per cent increase in the previous year. EU banks held the largest share, 53 per cent, up from 43 per cent a decade earlier. The growth in Europes share was mostly at the expense of Japanese banks, whose share more than halved during this period from 21 per cent to 10 per cent. The share of US banks remained relatively stable at around 14 per cent. Most of the remainder was from other Asian and European countries.

The United States has by far the most banks in the world, both in terms of institutions (7,540 at the end of 2005) and branches (75,000). This is an indicator of the geography and regulatory structure of the USA, resulting in a large number of small to medium-sized institutions in its banking system. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy each had more than 30,000 branchesmore than double the 15,000 branches in the U K.

Banking in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its
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origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980.

Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is with the Government of India holding a stake), 31 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 per cent of total assets of the banking industry, with the private and foreign banks holding 18.2 per cent and 6.5 per cent respectively.

In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank, ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks.

The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10 per cent, at present it has gone up to
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49 per cent with some restrictions.

Currently, banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking mortgages and investment services are expected to be strong. In recent years critics have charged that the non-government owned banks are too aggressive in their loan recovery efforts in connection with housing, vehicle and personal loans. (Source:

http://en.wikipedia.org/wiki/Banking_in_India)

Economic Backdrop and Banking Environment

The Indian economy, which is one of the fastest growing economies in the world, is poised to maintain its leading position, despite the global financial crisis and economic slowdown. India has managed to beat the global financial turmoil due to sound regulation, prudent financial supervision and proactive policies. Indias growth is driven predominantly by domestic consumption and investment and the Indian banking system has no direct exposure to the US sub-prime mortgage assets or to the failed institutions. Thus, as also projected by the IMF, India will remain among the

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fastest growing economies in the world. In the first half of the year that is 2008 high inflation and spiraling crude oil prices were the major concerns, but the focus in the second half shifted to sustaining growth and maintaining stability. Real GDP growth is expected to moderate from 9.0 per cent in 2007-08 to 6.5 per cent - 6.7 per cent in 2008-2009. Agriculture and allied sectors are likely to grow by around 2.6 per cent in 2008-09, which is only marginally lower than the average growth of 2.9 per cent during 2000-01 to 2007-08, mainly due to stagnant food grains production. Inflation based on WPI rose from 7.7 per cent at end-March 2008 to a high of 12.9 per cent on 2nd August 2008, reflecting high international crude oil and commodity prices coupled with increase in price of manufactured products and primary articles. After remaining in the range of 10-12 per cent between June and October 2008, inflation began to ease from November 2008 onwards to touch 0.26 per cent by 28th March 2009, mainly reflecting the decline in prices of crude oil, metals, minerals and manufactured goods. The focus of RBIs monetary and credit policy during the year 2008 was to control inflation, support growth, maintain financial market stability, ensure comfortable liquidity in the system to meet the required credit demand and limit the contagion from the ongoing global turmoil. During the 2008-09, while the Bank rate was kept unchanged at 6 per cent, Reverse REPO and more particularly the Repo rate and CRR were changed on a no. of occasions. When inflation started rising due to increase in international commodity and oil prices, the Repo rate was hiked from 7.75 per cent in April 2008 to a high of 9 per cent in July 2008 and CRR was hiked from 7.50 per cent in March 2008 to 9 per cent in August 2008. Subsequently, when growth stalled and inflation started coming down due to drop in crude oil and commodity prices, the Repo rate was cut five times to 5 per cent, the Reverse Repo rate was reduced three times to 3.50 per cent and CRR was cut four times to 5.0 per cent, between October 2008 and March 2009.

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Deposit and lending rates of banks also moved more or less in tandem with key policy rates as interest rates initially firmed up during 2008-09 up to October 2008, and subsequently started declining after November 2008. The capital outflows and slowdown in economic activity, particularly in the second half of the year, impacted money supply growth in the system (M3) and saw moderation in the business of all scheduled commercial banks. While growth in money supply (M3) moderated to 18.6 per cent in 2008-09 from 21.1 per cent a year ago, deposit and credit growth of ASCB moderated to 19.8 per cent and 17.3 per cent respectively in 2008-09 from 22.4 per cent and 22.3 per cent in 2007-08. A stable banking and financial sector, falling inflation and prompted co-ordinated policy action have helped India weather the crisis. On the upside, domestic demand especially from rural areas and Government invested activity in the economy will help up the growth momentum, making India the second fastest growing economy in the world. (Source: State Bank of India Annual Report 2007-2008)

Trends in Banking Industry

With the advancement of technology, banking sector has become more easy, fast, accurate and also time saving. ATMs, Mobile Banking, SMS Banking and Net Banking are only the tip of an ice-berg. With all these devices and systems, there is a complete freedom to experience. Investments aimed at managing risk and regulation issues with banks gaining the ability to identify, manage, and allocate risk exposures on across the enterprise to priorities business decisions. Developing a portfolio of shared service alliances focused on providing integrated cross-channel access and new range of services. In India, investments in technologies by financial services organisations are increasing, and new initiatives emerging, albeit at a basic level .However, in the long run, it is evident that technology

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investments in transaction and process automation will cease to be a differentiator. Banks have traditionally performed the role of financial intermediaries. As banks face the mutually interdependent forces of competition, regulation, technology, and customer expectations, a picturesque setting for the tremendous upheaval and opportunity emerges. This interdependency, in turn, is built upon mutually dependent technological trends. Increase processing power: With increasing power of processing, the cost of processing transactions has come down significantly. Radical advances that came about in computing power in the latter half of the 90s has egged on banks to centralize their processing operations, thus enabling multiple points of interaction with customers, paving way to advancements like any-branch banking. Increase in flexibility in defining business standards: Business standards are getting redefined in tune with the changing technology standards. While a number of such standards are in the process of being developed for the banking and financial services industry, an industry wide consensus is yet to emerge. Increase in modularity of software: Software is increasingly being built like 'Lego' blocks structure i.e., applications created by constructing and combining well-defined modules.

2.2 Company Profile

Indian Overseas Bank (IOB; established in 1937) is a major bank based in Chennai (Madras), with 1,400 domestic branches and six branches overseas. Indian Overseas Bank has an ISO certified inhouse Information Technology department, which has developed the software that 900 branches use to provide online banking to customers; the bank has a target to expand online banking to 1200 branches by the end of financial year 2007-08. IOB also has a network of about 500 ATMs all over India and IOB's International VISA Debit Card is accepted at all ATMs belonging to the Cash Tree and NFS networks. IOB offers internet Banking (E-See Banking) and is one of the banks that the Govt. of India has
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approved for online payment of taxes.

IOB had the distinction of simultaneously commencing operations in three branches at Karaikudi, Chennai, and Yangon (Myanmar). Since IOB aimed to encourage overseas banking and foreign exchange operations, it soon opened its branches in Penang and Singapore.

History
1937: Shri.M.Ct.M. Chidambaram Chettyar establishes the Indian Overseas Bank (IOB) to encourage overseas banking and foreign exchange operations. IOB started up simultaneously at three branches, one each in Karaikudi, Madras (Chennai) and Rangoon (Yangon). It then quickly opened a branch in Penang and another in Singapore. The bank served the Nattukottai Chettiars, who were a mercantile class that at the time had spread from Chettinad in Tamil Nadu state to Ceylon (Sri Lanka), Burma (Myanmar), Malaya, Singapore, Java, Sumatra, and Saigon. As a result, from the beginning IOB specialized in foreign exchange and overseas banking. 1960s: The banking sector in India was consolidating by the merger of weak private sector banks with the stronger ones; IOB absorbed five banks, including Kulitali Bank (est. 1933). 1969: The Government of India nationalized IOB. At one point, probably before nationalization, IOB had twenty of its eighty branches located overseas. After nationalization it, like all the nationalized banks, turned inward, emphasizing the opening of branches in rural India. 1988-89: IOB acquired Bank of Tamil Nadu in a rescue. 2000: IOB engaged in an initial public offering (IPO) that brought the government's share in the bank's equity down to 75 per cent.

Major Milestones

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Indian Overseas Bank has an ISO certified in-house Information Technology department, which has developed the software that 900 branches use to provide online banking to customers; the bank has a target to expand online banking to 1200 branches by the end of financial year 2007-08. IOB also has a network of about 500 ATMs all over India and IOB's International VISA Debit Card is accepted at all ATMs belonging to the Cash Tree and NFS networks. IOB offers internet Banking (E-See Banking) and is one of the banks that the Govt. of India has approved for online payment of taxes. IOB was the first bank to venture into consumer credit, as it introduced the popular Personal Loan scheme. In 1964, the Bank started computerization in the areas of interbranch reconciliation and provident fund accounts. Indian Overseas Bank was one of the 14 major banks which were nationalized in 1969. In 1979, IOB opened a Foreign Currency Banking Unit in the free trade zone in Colombo. In the year 2000, Indian Overseas Band undertook an initial public offering (IPO) that brought the government's share in the bank's equity down to 75 per cent. The equity shares of IOB are listed in the Madras Stock Exchange (Regional), Bombay Stock Exchange, and National Stock Exchange of India Ltd., Mumbai. Since its inception, IOB has absorbed various banks including the latest Bharat Overseas Bank in 2007. The Bank's IT department has developed software, which is used by its 1200 branches to provide online banking to customers. Indian Overseas Bank also has a network of about 500 ATMs throughout India. Its International VISA Debit Card is accepted at all ATMs belonging to the Cash Tree and NFS networks. IOB also offers Internet Banking; it's one of the banks that the Govt. of India has approved for online payment of taxes. Indian Overseas Bank offers investment options like Mutual Funds and Shares. It provides a wide range of consumer and commercial banking services, including Savings Account, Current Account, Depositary Services, VISA Cards, Credit Cards, Debit Cards, Online

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Banking, Any Branch Banking, Home Loans, NRI Account, Agricultural Loans, Payment of Bills / Taxes, Provident Fund Scheme, Forex Collection Services, Retail Loans, etc. IOB has been committed to and involved in various social causes, the most prominent being women empowerment - the Sakthi IOB Chidambaram Chettiar Memorial Trust and IOB's Promotion of the Agricultural Seed Bank.

International expansion
1937-38: 1941: 1946: 1947: 1948: 1949: 1963: IOB was international from its inception with branches in Rangoon, Penang, and Singapore. IOB opened a branch in Ceylon IOB opened a branch in Bangkok and re-opened others. United Commercial Bank opened a branch in Malaya. IOB opened a branch in Bangkok. The Burmese government nationalized IOBs branch in Rangoon. IOB, Indian Bank and United Commercial Bank established United Asian Bank Berhad in Malaysia. (Indian Bank had been operating in Malaysia since 1941 and United Commercial Bank Limited had been operating there since 1948.) The banks set up United Asian to comply with the Banking Law in Malaysia, which prohibited foreign government banks from operating in the country. Also, IOB and six Indian private banks established Bharat Overseas Bank as a Chennaibased private bank to take over IOB's Bangkok branch. 1973: 1977: IOB opened a branch in Seoul. IOB opened a Foreign Currency Banking Unit in Colombo, Sri Lanka. 1992: Bank of Commerce (BOC), a Malaysian bank, acquired United Asian Bank (UAB).

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1999:

Bank of Commerce (BOC) merged with Bank Bumiputra Malaysia to form Bumiputra-Commerce Bank (BCB) Berhad.

2005: 2007:

BCB integrates with CIMB. IOB takes over Bharat Overseas Bank.

The banking sector plays a significant role in the economic development of the country. The size and composition of banking transactions mirror the economic happenings in the country. Studies have shown that the employment elasticity (to GDP growth) in the services sector is higher than that in both agriculture and manufacturing sectors. Indian Overseas bank plays an important role in the economic development of the country

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CHAPTER 3 CONCEPTUAL FRAMEWORK

This chapter will have a review on literature and a theoretical background related to the research problem. In this chapter the concepts of service quality, service quality dimensions and concepts, formations of customer satisfaction, are described in order to give a clear idea about the research area. This chapter is divided into two sections:

3.1 3.2

Theoretical Framework Literature Review

3.1

Theoretical Framework

3.1.1. Service Quality

Service quality is determined by the differences between customers expectations of services providers performance and their evaluation of the services they received. Service quality can be defined as the difference between customers expectations for service performance prior to the service encounter and their perceptions of the service received.

Several studies have been conducted to identify traditional service quality dimensions that contribute most significantly to relevant quality assessments in the traditional service environment (e.g. Parasuraman et al., 1985, 1988). Identification of the determinants of service quality is necessary in order to be able to specify measure, control and improve customer perceived service quality. Parasuraman et al.s (1985) identified 10 detailed determinant of service quality through focus group studies: They are Tangibles, reliability, responsiveness, communication, access, competence, courtesy, credibility, security, understanding/Knowledge of customer. Later these ten dimensions were further purified and developed five dimensions-tangibles,
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reliability, responsiveness, assurance and empathy to measure service quality, SERVQUAL (Parasuraman et al.1988). Tangibles refer to physical facilities, equipment, and appearance of personnel. Reliability means ability to perform the promised service dependency and accurately. Responsiveness means willingness to help customers and provide prompt service. Assurance indicates knowledge and courtesy of employees and their ability to inspire trust confidence. Empathy refers to caring, individualized attention the firm provides its customers.

Measuring service quality in banking sector

Measuring Quality in the Services Sector and in particular in the Banking sector is more difficult than measuring the quality of manufactured goods. This is mainly due to the following: i. The Services Sector as a whole is very heterogeneous and what is very heterogeneous and what may hold true for one service may not hold true for another service sector. For example, the nature of banking services is very different from, the nature of services provided by an airline or a hotel. Even within banking there are a variety of dissimilar services like retail banking, commercial service banking, quality

investment banking etc. This heterogeneity makes standardized measurement very difficult. Most manufacturing been able to adopt standard measures to ii.

companies, on the other hand, have

improve the quality of goods produced.

Services are intangible in nature and, unlike in the case of goods, there is no real product that the customer takes home. This is true of banking services and most other financial services where the service offered is only what the customer experiences fleetingly. Some service sectors like the hotel industry,

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the tourism industry, etc. provide services that may be considered somewhat more tangible. iii There is no scope for inspection before the service delivered. All services have a

here-and-now attribute that makes standardised quality testing and control procedures followed by manufacturing sector difficult to adopt. Unlike a good manufacturer, a bank cannot inspect its services and products to weed out unsatisfactory ones before they are presented to the customer

Banking Services: Technical Quality and Functional Quality

Service Quality can be thought of as having two dimensions: Technical quality and Functional quality. Technical Quality refers to what the bank gives the customer. Functional Quality refers to How the banks services are provided to the customer. Technical Quality: To ensure that it delivers technical quality , the bank must ensure that Its products and services are closely aligned with customer needs. Customers are adequately informed about the banks products and services The banks staff, especially front-line staff , have thorough knowledge of the banks products and services The banks branch has a suitable mix of people with experience in banking, finance, accounting and legal aspects, s9o a s to ensure that the branch is adequately equipped to deliver technical quality The banks staff has been adequately communicate with customer queries The banks staff is able to effectively communicate with customers staff should also be able to converse in the local language, if required. The banks staff is able to provide professional advice to its customers The banks staff, especially front line staff, has been adequately trained to deal with difficult customers and with customer complaints.
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Handling of customer grievances is the overall responsibility of a senior official who is not directly involved with the routine branch banking operations.

Functional Quality: Functional quality is concerned with how the service is provided to the banks customer. A few elements that affect a banking services functional quality include: Attitude of the banks staff members Importance given to the banks customers over routine work. Perceived credibility of the banks officials to customer queries Ambience at the bank Image of the bank as a whole

A bank must be equipped to deliver both Technical and Functional quality thus ensuring that it provides its customers with total quality service. Relevant qualitative determinants could be set up for a few technical and functional quality parameters, but most of these remain difficult to quantify. A bank could set up appropriate policies and procedures, for example recruitment policies, to create enabling conditions for providing technical and functional quality to its customers. The ultimate focus should firmly be on providing quick and cost-effective quality banking services.

3.1.2 SERVQUAL
The SERVQUAL scale is a principal instrument in the services marketing literature for assessing quality (Parasuraman et al., 1991; Parasuraman et al., 1988). This instrument has been widely utilized by both managers and academics to assess customer perceptions of service quality for a variety of services (e.g. banks, credit card companies, repair and maintenance companies, and long-distance telephone companies). Based on Parasuraman et al.s (1988) conceptualization of service quality the original SERVQUAL instrument

[19]

included two 22-item sections that intended to measure (a) customer expectations for various aspects of service quality, and (b) customer perceptions of the service they actually received from the focal service organisation. In short, the SERVQUAL instrument is based on the gap theory and suggests that a consumers perception of service quality is a function of the difference between his/her expectations about the performance of a general class of service providers and his/her assessment of the actual performance of a specific firm within that class. The results of the initial published application of the SERVQUAL instrument indicated that five dimensions of service quality emerged across a variety of services. These dimensions include tangibles, reliability, responsiveness, assurance, and empathy Tangibles are the physical evidence of the service (e.g. physical facilities, appearance of personnel, or tools or equipment used to provide the service), reliability involves consistency of performance and dependability (i.e. a firm performs the service right the first time and honours its promises), responsiveness concerns the willingness or readiness of employees to provide service (e.g. timeliness of service), assurance corresponds to the knowledge and courtesy of employees and their ability to inspire trust and confidence, and, finally, empathy pertains to caring, individualized attention that a firm provides its customers. Subsequent research conducted in a variety of settings (e.g. a dental school clinic, a business school placement centre, a tire store, and an acute care hospital) suggests that the five SERVQUAL dimensions may not be universal across all services, and that it is probably unnecessary to administer the expectation items every time SERVQUAL is administered (Babakus and Boller, 1992; Carman, 1990).

3.2 Literature Review

Service quality is a very important for a firm. Many studies have been conducted on how to improve the service quality of a firm. Inferences of some of such studies are summarised
[20]

in this section

Aldlaigan and Buttle (2002), based on the technical and functional service quality schema proposed by Gronroos (1984), developed a scale to measure service quality perceptions of bank customers. Their study resulted in SYSTRA-SQ, which consists of service system quality, behavioural service quality, service transactional accuracy, and machine service quality.

From the focus group interviews, Berry et al. (1985) identified ten determinants of service quality. Virtually all comments consumers made in these interviews about service expectations, Priorities and experiences fall into one of these ten categories. These are reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding and tangibles.

Brown, Churchill, and Peter (1993) argue that because the SERVQUAL scales "scores" are really difference scores (perception scores minus expectation scores); problems of reliability, discriminant validity, and variance restrictions exist. They showed that while SERVQUAL had high reliability, a non-difference score rated higher in reliability. Their findings also showed that the scale "failed to achieve discriminant validity from its components", and the distribution of the SERVQUAL scores were non-normal.

Cronin and Taylor (1992), for instance, concluded that a psychometrically superior assessment of service quality can be obtained through the SERVQUAL performance items alone, rather than the expectationsperformance methodology originally used by Parasuraman et al. (1988). Darby and Karni (1973) defined "credence properties," (such as competence and security) as properties or characteristics that consumers often find extremely difficult to evaluate

[21]

after their purchase. Therefore, PZB (1985) concluded that consumers typically rely on experience properties when evaluating service quality.

Gronroos (1990) postulated six criteria of perceived good service quality: professionalism and skills; attitudes and behaviour; accessibility and flexibility; reliability and trustworthiness; recovery; reputation and credibility and flexibility; reliability and dimensions Attentiveness/helpfulness, responsiveness, care, Availability, Reliability, Access, Flexibility, Aesthetics, Cleanliness/tidiness, Comfort and Security.

Mukherjee et al. (2003), presented the development of a theoretical framework for measuring the efficiency of banking services, taking into account physical and human resources, service quality and performance. Banks delivering better service are found to have better transformation of resource to performance, using superior service delivery as the medium.

Nantel (2000) proposed an alternative measure of perceived service quality in retail banking that comprises 31 items with six underlying key dimensions. These dimensions are: effectiveness and assurance, access, price, tangibles, service portfolio and reliability.

Nelson (1974) defined "search properties" as properties that can be determined before purchasing (such as credibility and tangibles), and "experience properties" as properties that can be determined only after purchase or consumption.

Sureshchanda et al. (2003), focuses on investigating the critical factors of customer perceived service quality in banks of a developing economy- India. Customers in developing economies, seem to keep the technological factors of services such as core service and systemization of the service delivery as yard sticks in differentiating between good and bad service, while the human factors seem to play a lesser role.
[22]

Teas (1993) questions SERVQUAL'S discriminant validity. He notes that the service quality expectations concept may have serious discriminant validity short-comings which can cause the "perceptions-minus-expectations" service quality measurement framework to be "a potentially misleading indicator of customer perceptions of service quality" (p.33). He notes that SERVQUAL's lack of discriminant validity results in a significant part of the variance in its expectations scores being determined by the respondent's

"misinterpretations" of the expectation questions.

Vriens (2000) developed an application for measuring retail banking service quality, which consists of 28 attributes including four service quality dimensions such as: accessibility; competence; accuracy and friendliness; and tangibles. The accuracy and friendliness dimension turned out to be the most important factor out of four determining banking preference, followed by competence, tangibles, and accessibility.

Walker (1990) suggested that the key determinants are product reliability, a quality environment and delivery system that work together with good personal service-staff attitude, knowledge and skills.

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CHAPTER 4 RESEARCH METHODOLOGY 4.1 Introduction

Research can be defined as the process of gathering information for the purpose of initiating, modifying or terminating a particular investment or group of investments. Research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. Research design is the conceptual structure within which research is conducted. It constitutes the blueprint for collection, measurement and analysis of data. The overall research design can be split into four parts: i. The sampling design which deals with the method of selecting items to be observed

for the given study; ii. The observational design which relates to the condition under which the observations are to be made; iii. The statistical design which concerns the questions of how many items are to be observed and how the information and data gathered are to be analysed; and iv. The operational design which deals with the techniques by which the procedures specified in the sampling. Statistical and observational designs can be carried out.

4.2

Hypotheses of the Study

The hypotheses that were formulated for the purpose of the study includes

HA1: There is a significant difference in the satisfaction level of the customers based on their job classification regarding the service quality offered by the organisation.

HA2: There is a significant difference in the satisfaction level of the customers based on
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their gender regarding the service quality offered by the organisation.

HA3: There is a significant difference in the satisfaction level of the customers based on their education regarding the service quality offered by the organisation.

HA4: There is a significant difference in the satisfaction level of the customers based on their age regarding the service quality offered by the organisation

4.3

Sampling Procedure

4.3.1 Universe
Universe refers to the set of objects to be studied. Examples of universe are population of a city, number of workers in factory (Kothari, 2008). The universe for this study includes all the customers of Indian Overseas Bank.

4.3.2 Sampling Unit

Sampling unit is a geographical unit or a social unit which the researcher selects for the study. The sampling unit for this study is Indian Overseas Banks branch at Puthencavu.

4.3.3 Sample Size

Sample size refers to the number of items to be selected from the universe to constitute a sample. The sample size taken up for the study was 60 respondents to analyse and study the customer perception regarding the service quality. The respondents include students, professionals, self employees in government and private organisations, business people, professionals and retired people.

4.3.4 Sampling Method

Convenience sampling method was used for selecting the respondents. When population elements are selected for inclusion in the sample based on the ease of access, it is referred

[25]

as convenience sampling. From the IOB Puthencavu branch, 60 customers were interviewed with a structured questionnaire

4.4

Data Collection

The study Service Quality Perception of Customers With special reference to Indian Overseas Bank was done based on the collection of primary and secondary data.

Primary Data
Primary research is original data collected for the problem at hand, usually at a significant cost. The primary data were collected using questionnaire. Questionnaire: Questionnaire is a structured technique for data collection that consists of a series of questions, written or verbal, that a respondent answers. Questions can be scaled on one of the four scales- nominal, ordinal, interval or ratio, depending on the nature of the variable. Questions can be either close ended or open ended. An open-ended question leaves it to the respondent to answer as he chooses. Close ended questions have two categories such as Yes or No. Rating/Ranking type questions are used to rank a product/brand.

Secondary data
Secondary data is collecting and possibly processing data by people other than the researcher in question. The secondary data was collected from books on equities, websites, previous project reports, company brochures, journals and newspapers.

4.5 Variables of Interest

The specific population parameters which are of interest are Service Quality Parameters: These reliability, assurance and empathy. include tangibility, responsiveness,

Demographic factors like Age group, education, gender and job of respondents

4.6 Techniques for Data Analysis

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For data analysis, SPSS (Statistical Package for the Social Sciences) is used. SPSS can be used to perform statistical tests like independent sample t-test, ANOVA and Chi-Square. ANOVA and independent sample t-test are used in this project. The tests were performed to check the relationship between the satisfaction levels of customers with different parameters. Percentage analysis, standard mean is also used to estimate the perception of customers regarding service quality delivered by the organisation

4.7

Duration of the study

The study was undertaken for a period of 60 days. The study was commenced on June 1, 2009. During the period the following steps were taken: 1. 2. 3. 4. Objectives were set and questionnaire was finalized Data were collected and recorded. Data were analysed and interpreted. Reports were generated.

4.8

Limitations of the study

The major barrier of the study was the shortage of time. The investigator had to spend lot of manual hours to identify clients. There was restriction in accessing some of the documents and manuals. It was also not possible to go detail into technical and infrastructural facilities for the services. Again, it was not possible to go into background and personal details of customers of IOB. Also, another major barrier was the element of bias that was present in the minds of both the customers and the employees.

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CHAPTER 5 SERVICE QUALITY PERCEPTION - ANALYSIS

Service quality is so important that companies have gone to great efforts to evaluate and keep records of service quality levels. It is essential to determine how to achieve high service quality and how to communicate the benefits of service quality. The aim of this study is involves the use of SERVQUAL instrument in order to ascertain any actual or perceived gaps between the customer expectations and perceptions of service offered.

The sample size of the study was 60 and was collected through questionnaires. The questionnaire mainly prepared to know the service quality perception of the customers about Indian Overseas Bank (IOB). Convenience sampling method has been adopted for selecting the samples. The respondents selected for the study purpose was the customers of IOB. The analysis of the data will give an idea of the factors that leads to customer satisfaction.

The analysis part is divided into five sections. They are 1. 2. 3. 4. 5. Customer Profile Service Quality Parameters Overall Customer Perception Factors Influencing Service Quality Hypotheses Testing

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5.1

CUSTOMER PROFILE

Customer profile includes the demographic factors of the respondents like age, gender, income, education and for how many years they have been banking with IOB.

5.1.1 Age Group of Respondents

The age group is an important factor that determines the investment of customers. The following table and figure shows the age wise classification of respondents. Table 5.1: Age wise classification of Respondents Age Group Between 15 and 25 Between 25 and 40 Between 40 and 60 Greater than 60 Total Number of Respondents 4 46 7 3 60 Percentage 7 77 11 5 100

Figure5.1: Age wise classification of Respondents

Out

of

the

total majority of the

respondents,

respondents that is 77per cent were in the age group between 25 and 40 and the least was from the age group greater than 60that is only 5per cent. It can be inferred that majority of those who come to bank for transactions are youth.

5.1.2 Gender Profile of Respondents

The customers of the organisation fall in either gender. The banking sector is a sector which is having participation from both the genders. The following table and figure shows the gender wise classification of respondents

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Table 5.2: Gender wise classification of respondents Number of Respondents 31 28 60 Percentage 53 47 100

Gender Male Female Total

Figure 5.2: Gender wise classification of respondents

Among the respondents, 53 per cent were male and the remaining 47 per cent females. Thus, it is evident that mostly male members of the family comes to bank for money transactions.

5.1.3 Job Profile of Respondents

The satisfaction level of a person is very much influenced by the job of the person. The occupation of the customers can be classified as business men, government employee, private employee, retired and unemployed. The following table and figure shows the occupation wise classification of respondents.

Table 5.3: Job wise classification of respondents

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Occupation Business Govt. Employee Private Employee Retired Unemployed Total

No. of Respondents 11 7 28 2 12 60

Percentage 18 12 47 3 20 100

Figure 5.3: Job wise classification of respondents

From the sample size of 60, majority of the respondents that is 47 per cent are non government employees, 20 per cent are housewives, 18 per cent are business people, 12 per cent govt. employees and the least that is 3 per cent is retired people. It can be inferred that from the sample, private employees are the majority of the customers for the organisation. The trend indicates that the private employees are more interested in saving their money in banks than other groups.

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5.1.4 Education
Education profile of a person is a determinant of the persons satisfaction level. When a person is highly qualified, his expectation on service quality is also very high. The following table and figure shows the education wise classification of respondents.

Table 5.4: Education wise classification of Respondents

Education Matriculate Higher Secondary Graduate Post Graduate Doctorate Total

No. Of Respondents 8 12 23 16 1 60

Percentage 13 20 38 27 2 100

Figure 5.4: Education wise classification of Respondents

From the respondents, 38 per cent were graduates, 27 per cent were post graduates, 20 per cent were PDC holders, 13 per cent were SSLC and 2 per cent doctorate holders. Thus, the majority of the IOB customers are graduates.

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5.1.5 Banking Duration of Customers with IOB

The banking duration of the customers with IOB refers to the loyalty of the customers with the organisation. The loyal customers will be doing business with the organisation for a longer period. The following table and graph shows the customer classification based on the number of years they have been banking with IOB. Table 5.5: Banking Duration of Customers No. of Years Less than 1 year Between 1 and 3 yrs Between 3 and 5 yrs Above 5 yrs Total No. Of Respondents 4 8 16 32 60 Percentage 7 13 27 53 100

Figure 5.5: Banking Duration of Customers

Out

of

the 60 respondents,

majority of them that is 53 per cent have been with banking with IOB for more than 5 years and only 7 per cent were less than 1 year. It can be inferred that majority of the IOB customers are long time customers.

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5.1.6 Income
Annual income of a person is an influential factor for his investments. The customers pattern of investment can vary with the annual income he has. The following table and figure shows the income wise classification of respondents.

Table 5.6: Income wise classification of Respondents Income Less than 1 Lakh Between 1 and 5 Lakhs Between 5 and 10 Lakhs Above 10 Lakhs Total No. Of Respondents 11 23 16 9 60 Percentage 19 39 27 15 100

Figure 5.6: Income wise classification of Respondents

Among the respondents, 39 per cent of the respondents income was between 1 and 5 Lakhs, 27 per cent was between 5 and 10 Lakhs, 19 per cent was less than 1 Lakh and 15 per cent had an annual income above 10 Lakhs. It can be inferred that majority of the IOB customers belongs to middle class

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5.2

SERVICE QUALITY PARAMETERS

The measurement of service quality should take into account customer expectations of service as well as perceptions of service. The service quality measurement model that has been extensively applied in this project is SERVQUAL model. This model has five generic dimensions or factors for measuring service quality. They are tangibles, reliability, responsiveness, assurance and empathy.

5.2.1 Tangibility
The tangibility is an important dimension on which the service quality is rated. The tangibility stands for the physical facilities, equipment and appearance of personnel. Thus tangibility refers to the tangible experience that the customer receives from the service provider. The customer perception on the service quality is dependent on the tangible experience that he receives. The tangibility thus evolves to be one of the major criteria for assessing the customer perception

1.

Exteriors of the bank

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Exteriors of the bank include the external appearance of the bank like location of the bank, parking facilities, building structure etc. The following table and figure shows the satisfaction level of respondents on the exteriors of the bank. Table 5.7: Exteriors of the bank is visually appealing Satisfaction Level Highly dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 6 34 18 2 60 Percentage 0 10 57 30 3 100

Figure 5.7: Exteriors of the bank is visually appealing

Out of the total respondents, 3 per cent was highly satisfied, 30 per cent were satisfied, 57 per cent were neither satisfied nor dissatisfied and 10 per cent were dissatisfied. It can be inferred that majority of the customers are not much satisfied with the external appearance of the bank. So the company must take efforts to improve its external appearance inorder to make it more visually appealing.

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2.

Interiors of the bank

The interiors of the bank refer to how the office room of the bank is arranged. The interior must be properly arranged in a neat and convenient manner. The following table and figure shows the satisfaction level of customers on the interiors of the bank. Table 5.8: Interiors of the bank Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 5 14 32 9 60 Percentage 0 8 23 54 15 100

Figure 5.8: Interiors of the bank

From the total respondents, 15 per cent was highly satisfied, 54 per cent were satisfied, 23 per cent were neither satisfied nor dissatisfied and 8 per cent were dissatisfied. It can be inferred that majority of the customers are satisfied with the interiors of the bank. The main reason for this trend is due to the fact that the arrangement of employees counter, customers area etc in the bank are arranged in a proper order so that no inconvenience is created for a customer.

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3.

Appearance of Employees

The appearance of employees in this context refers to both physical and emotional aspect. The physical aspect refers to employees external appearance like way of dressing, and posture. The emotional aspect refers to employees behaviour, politeness and discipline. The following table and figure shows the satisfaction level of customers on the appearance of employees. Table 5.9: Appearance of Employees Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 2 18 27 13 60 Percentage 0 3 30 45 22 100

Figure 5.9: Appearance of Employees

From the 60 respondents, 22 per cent was highly satisfied, 45 per cent were satisfied, 30 per cent were neither satisfied nor dissatisfied and 3 per cent were dissatisfied. It can be inferred that customers are satisfied with the appearance of employees. They are satisfied with employees dress code and their behaviour.

4.

Spacious Interiors of the Bank

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Spacious interiors mean that the customers have enough and more space in their bank for their transactions. The customers should not feel congested when they come to their bank. This will directly affect their satisfaction level. The following table and figure shows the customers satisfaction level on the interior space provided by the bank. Table 5.10: Spacious Interiors Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 1 24 24 11 60 Percentage 0 2 40 40 18 100

Figure 5.10: Spacious Interiors

Among the total respondents, 18 per cent was highly satisfied, 40 per cent were satisfied, 40 per cent were neither satisfied nor dissatisfied and 2 per cent were dissatisfied. The majority of the customers had a neutral satisfaction level. The firm must take measures on its interiors arrangement to change the customers satisfaction level from neutral to satisfy.

5.2.2 Reliability
Reliability refers to the ability to perform the promised service dependably and accurately. While considering the service quality of a service the customers consider the reliability of the service provider. The customers will be more inclined towards those organisations
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which will give them better reliability. The reliability is a factor that the customer values the most while doing an investment. The customers prefer only those banks which offer them better reliability by performing the service accurately according to customer needs. Thus, reliability is an important factor which influences the customer perception of the service quality offered by the firm.

1. Error free service by employees

The employees must provide an error free service to its customers else it will cause of wastage of both time and money. The following table and figure shows the satisfaction level of respondents on the error free service by the employees. Table 5.11: Error free service Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 0 5 37 18 60 Percentage 0 0 8 62 30 100

Figure 5.11: Error free service

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Out of the total respondents, 30 per cent was highly satisfied, 62 per cent were satisfied and 8 per cent were neither satisfied nor dissatisfied. It can be inferred that the customers are satisfied with the services provided by the employees.

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2.

Confidentiality in Transactions

Majority of the customers wish to maintain secrecy on their transactions. The bank must make sure that a detail regarding their customers transaction is not leaked out. The following table and figure shows the satisfaction level of the customers in the confidentiality that the employees maintains in their transactions. Table 5.12: Confidentiality in transactions Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 2 11 33 14 60 Percentage 0 4 18 55 23 100

Figure 5.12: Confidentiality in transactions

From the total respondents, 23 per cent was highly satisfied, 55 per cent were satisfied, 18 per cent were neither satisfied nor dissatisfied and 4 per cent were dissatisfied. It can be inferred that employees carry out customer transactions confidentially.

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3.

Informs Customers about the banks financial operations

The customers are assets of an organisation. The firm must inform their customers about their achievements and operations. The following table and figure shows the satisfaction level of customers when the bank informs them about its financial operations. Table 5.13: Bank Informs Customers Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 1 10 11 27 11 60 Percentage 2 17 18 45 18 100

Figure 5.13: Bank Informs Customers

Out of the total respondents, 18 per cent was highly satisfied, 45 per cent were satisfied, 18 per cent were neither satisfied nor dissatisfied, 17per cent were dissatisfied and 2 per cent were highly dissatisfied. The bank must make efforts to inform customers about their achievements, profit margins etc to the customers whenever they occur.

5.2.3 Responsiveness
Responsiveness refers to the characteristic of the organisation of willingness to help customers and provide prompt service. This is an important parameter as the customers value the responsiveness of the organisation while considering the service quality provided
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by the organisation. The customers are satisfied only if responsiveness of the organisation is up to their expectation. Thus responsiveness is an important dimension by which the customers perception regarding the service quality can be quantified. 1. Employee serves Customers in a good manner

Customer requires assistance of employees in various transactions. The employees must serve their customers inorder to carry out transactions completely. The following table and figure shows the satisfaction level of the customers on how the employees treat them.

Table 5.14: Employee serves Customer Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 1 4 37 18 60 Figure 5.14: Employees serves Customer Percentage 0 2 7 61 30 100

From the total respondents, 30 per cent was highly satisfied, 61 per cent were satisfied, 7 per cent were neither satisfied nor dissatisfied and 2 per cent were dissatisfied. It can be inferred that the customers are highly satisfied with the service provided by the IOB
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employees.

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Employees knowledge to respond to problems

Employees of a firm must be knowledgeable enough to resolve the problems faced by their customer. The following table and figure shows whether the customers are satisfied with the employees knowledge to respond to problems. Table 5.15: Employees Knowledge Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 1 8 30 21 60 Percentage 0 2 13 35 50 100

Figure 5.15: Employees Knowledge

Among the total respondents, 35 per cent was highly satisfied, 50 per cent were satisfied, 13 per cent were neither satisfied nor dissatisfied and 2 per cent were dissatisfied. Thus the majority of the respondents have the opinion that employees are knowledgeable to respond to problems faced by the customers.

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3.

Employees are polite to customers

Customers expect that the employees of a firm must be well mannered and respectful to them. This directly affects the retention rate of customers of the firm and thereby satisfaction level. The following table and figure shows the customers satisfaction level in employees politeness. Table 5.16: Employees Politeness Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 1 0 2 35 22 60 Percentage 2 0 3 58 37 100

Figure 5.16: Employees Politeness

Out of the 60 respondents, 35 per cent was highly satisfied, 50 per cent were satisfied, 13 per cent were neither satisfied nor dissatisfied and 2 per cent were dissatisfied. It can be inferred that the employees behave to their customers in a polite manner.

4. Warm relationship between Employees and Customers

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A firm must be able to maintain a good rapport with their customers as it affects their satisfaction level on the service. The following table and figure shows the satisfaction level of the customers in relationship between them and the employees. Table 5.17: Relationship between Employees and Customers Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 1 1 7 33 18 60 Percentage 2 2 11 55 30 100

Graph 5.17: Relationship between Employees and Customers

As per the available data, 30 per cent was highly satisfied, 55 per cent were satisfied, 11 per cent were neither satisfied nor dissatisfied, 2 per cent were dissatisfied and 2 per cent were highly dissatisfied. It can be inferred that there is a strong and healthy relationship between the employees and customers of IOB.

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5.2.4 Assurance
The assurance factor includes knowledge and courtesy of employees and their ability to inspire trust and confidence. Thus assurance parameter includes the organisations competence, courtesy, credibility and security over the service offered. The customer values the assurance offered by the organisation while assessing the service quality. The organisation needs to build trust and confidence in the minds of the customers so that they will regard the organisation as their own and will be loyal to the organisation. Thus the assurance dimension has high priority among the customers while assessing the service quality delivered by the organisation. 1 Satisfied with Employees expertise and knowledge The employees of a firm must be proficient in the industry that they are working as it directly affects their work and the customers of that firm. The following table and figure shows the customers satisfaction level in employees expertise and knowledge on banking. Table 5.18: Employees Expertise and Knowledge Level Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 1 12 31 16 60 Percentage 0 2 20 51 27 100

Figure 5.18: Employees Expertise and Knowledge Level

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Out of the total respondents, 27 per cent was highly satisfied, 51 per cent were satisfied, 20 per cent were neither satisfied nor dissatisfied and 2 per cent were dissatisfied. It can be inferred that the employees have high expertise and knowledge in banking operations.

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2. Trustworthiness of the bank

An organisation must be trustworthy to its customers. If an organization is trustworthy, then their customers will also be loyal to that firm. The following table and graph shows the satisfaction level of the respondents in the trustworthiness of the bank. Table 5.19: Banks Trustworthiness Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 1 0 6 27 26 60 Percentage 2 0 10 45 43 100

Figure 5.19: Banks Trustworthiness

Among the total respondents, 43 per cent was highly satisfied, 45 per cent were satisfied, 10 per cent were neither satisfied nor dissatisfied and 2 per cent were highly dissatisfied. It can be inferred that the customers are highly satisfied with the banks trustworthy.

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5.2.5 Empathy
Empathy refers to caring and individualized attention that the firm provides to its customers. While considering the service quality the customers take into account the individual attention and caring they receive from the organisation. They regard the service of those firms better which provide them better caring. Thus in effect empathy refers to all those factors including access, communication and understanding of the customers by the organisation. While assessing the service quality, the customer regards the firm which shows empathy as that which is having better service quality. 1 Standing in Queue An organisation must avoid the situation of customers standing in a queue. The long waiting time might lessen the satisfaction level of the customers. The following table and graph shows the satisfaction level of the customers on whether the employees make them to stand in queue.

Table 5.20: Queuing time in Bank Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 0 5 35 20 60 Percentage 0 0 8 59 33 100

Figure 5.20: Queuing time in Bank

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Among the 60 respondents, 33 per cent was highly satisfied, 59 per cent were satisfied and 8 per cent were neither satisfied nor dissatisfied. It can be inferred that the employees carryout the customers transaction in proper time so that the customers need not stand in queue for very long time.

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2. Timeliness
Employees must be able to carry out the customers transactions within an appropriate time. The following table and figure shows the satisfaction level of customers on the timeliness of the employees. Table 5.21: Timeliness of banking services Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 1 1 9 30 19 60 Percentage 2 2 15 50 32 100

Figure 5.21: Timeliness of banking services

As per the available data, 32 per cent was highly satisfied, 50 per cent were satisfied, 15 per cent were neither satisfied nor dissatisfied, 2 per cent were dissatisfied and 2 per cent were highly dissatisfied. It can be inferred that employees enact the customers transactions timely.

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3.

Employees help Customers

Employees of a firm are expected to help their customers in order to carry out their transactions efficiently. The following table and graph shows the customers satisfaction level on the helping mentality of employees towards their customers. Table 5.22: Helping mentality of Employees Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 0 3 44 13 60 Percentage 0 0 5 73 22 100

Figure 5.22: Helping mentality of Employees

Out of the total respondents, 22 per cent was highly satisfied, 73 per cent were satisfied and 10 per cent were neither satisfied nor dissatisfied. It can be inferred that the employees of IOB helps their customers to carry out their transactions properly.

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4.

Individualised attention to Customers

Every customer of a firm expects an individualised attention from the employees of the firm. The following table and figure shows the satisfaction level of customers on the individualized attention that the employees provide. Table 5.23: Individualized attention of Employees Satisfaction Level Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied Total No. of Respondents 0 0 6 34 20 60 Percentage 0 0 10 57 33 100

Figure 5.23: Individualized attention of Employees

Out of the total respondents, 33 per cent was highly satisfied, 57 per cent were satisfied and 10 per cent were neither satisfied nor dissatisfied. It can be inferred that the employees provide individualized attention to each and every IOB customer.

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5.3 OVERALL CUSTOMER PERCEPTION

The overall perception of the customers regarding the service quality could be deducted from the total score given by the customers to the service quality parameters. For calculation purpose, the respondents response was converted to a five interval scale. If the response from the respondent is as highly satisfied then it will be converted into a numeral number 5, for satisfied, numeral is 4, neutral it is 3, dissatisfied is 2 and for highly dissatisfied is 1. The sum of all the questions related to the service quality parameters is added and the pattern is analysed. The total score is divided into maximum, neutral and minimum scores for identifying the customer perception. The scores are rated based on the class in which it belongs and the customer perception is analysed. Table 5.24: Overall Customer Perception Maximum Score 85; Neutral Score 51; Minimum Score -17 Service Quality Score Interval No. of Respondents 50-55 56-60 61-65 66-70 71-75 76-80 81-85 Total 1 2 13 26 6 6 3 60

Percentage 1.67 3.33 21.67 43.33 10.00 10.00 5.00 100.00

Figure 5.24: Overall Customer Perception

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The majority of the customers are highly satisfied with the service delivered by the organisation. Only 1.67 per cent of the respondents have responded as dissatisfied of the service offered by the organisation. This score was deduced from the sum of all the scores given by the respondents to the different service quality questions. Only 1.67 per cent of respondents responded as dissatisfied which comes below the score of 51 for the total questions which corresponds to the response of being neutral. Similarly 68.33 per cent of the respondents are satisfied and 5 per cent of the respondents are highly satisfied with the services offered the organisation. 24.97 per cent of the respondents were neutral in the opinion. Thus it is the evident that the majority, 68.33 per cent of the respondents are satisfied with the service quality offered by the organisation to them and only 1.67 per cent of the respondents are dissatisfied. Thus, the majority of the clients of the organisation regards that the service quality of the organisation meets their expectation.

5.4 FACTORS INFLUENCING SERVICE QUALITY

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The factors influencing the service quality are tangibility, reliability, responsiveness, assurance and empathy. The five dimensions together influence the quality of service offered by the organisation. The customer perception regarding the service quality can be accessed by taking the mean of the responses of each parameter. The mean response for each service quality dimension is taken based on the parameters of each and the total mean score is deducted. The total score of all the service quality dimensions are taken together to analyse the overall service quality perception of the customer regarding the service of the organisation.

5.4.1 Tangibility Factors

Table 5.25: Tangibility Parameters

Tangibility Parameters Exteriors of the bank Interiors Neat appearance of Employees Spacious Interior Total

Mean 3.26 3.75 3.85 3.75 3.65

Standard Deviation 0.69 0.82 0.80 0.77

The tangible parameters are the key factors for the analysis of service quality. Tangibility is the parameter by which the customer can experience the service externally. It is the parameter by which the customer sees, feels and understands the various services offered by the organisation them. These parameters include the location, ambience, physical facilities, equipments and appearance of personnel. Among the respondents, the mean response for the exteriors of the bank is visually appealing is 3.26 and its standard deviation (SD) is 0.69 which indicates that customers are neither satisfied nor unsatisfied with the exteriors of the bank. Regarding the interiors, the

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respondents mean value and SD are 3.75 and 0.82 which indicate that customers are satisfied with the interiors. The respondents consider that the appearance of employees and interiors of the bank are satisfactory as their mean values are 3.85 and 3.75 and corresponding SDs are 0.80 and 0.77. The respondents have their mean response for the tangibility parameter of the service quality of the organisation as 3.6525, which indicate that the respondents are satisfied with the different factors of tangible services offered by the organisation. The customers of the organisation are satisfied with the physical facilities offered by the organisation.

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5.4.2 Reliability Factors

Table 5.26: Reliability Parameters Reliability Parameters Provides Error free service Confidentiality in transactions Informs accurately Total Mean 4.21 3.98 3.61 3.93 Standard Deviation 0.58 0.75 1.03

Reliability is the quality that any organisation must have, who are in the business of financial services. Reliability is the quality that the organisation must possess for the smooth running of the business of the organisation. It also includes the ability of the organisation to perform the promised service dependably and accurately. Among the respondents the mean response and standard deviation (SD) for providing error free service is 4.21 and 0.58. This indicates that the respondents are highly satisfied with the service. Regarding the confidentiality in customers transactions, the mean and SD value is 3.98 and 0.75 which indicate that customers are satisfied. The mean and SD value for the parameter bank informs a customer about its financial operations accurately is 3.61 and 1.03 that is the customer is satisfied with the banks service. The respondents have the mean response for the reliability parameter as 3.94, which indicate that the customers are satisfied with the reliability of the organisation. That is the organisation is able to perform the promised service dependably and accurately.

5.4.3 Responsiveness Factors

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Table 5.27: Responsiveness Parameters Standard Deviation 0.69 0.72 0.63 0.80

Responsiveness Parameters Polite to Customers Employees knowledge to respond to customers problems Employees serves Customers in a good manner Warm relationship between employees and customers Total

Mean 4.28 4.18 4.2 4.1 4.19

Responsiveness is the process of taking action quickly to meet the specific needs of customers. It means keeping customers informed about ongoing activity to meet their requests and giving them a sense that fulfilling their requests is important. The customers response regarding the employees politeness, knowledge in banking and other factors are taken into consideration in responsiveness parameter. The respondents have the mean and SD response as 4.28 and 0.72 for politeness to customers which indicate that they are highly satisfied. Respondents are highly satisfied with the employees knowledge to respond to their problems. The mean and SD response is 4.18 and 0.63. There is a warm and healthy relationship between the employees and customers. The mean and SD value for this factor is 4.1 and 0.80 The respondents have the mean response for the responsiveness parameter as 4.19. It indicates that the respondents are highly satisfied with the responsiveness of the organisation.

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5.4.4 Assurance Factors

Table 5.28: Assurance Parameters Standard Deviation 0.74 0.78

Assurance Parameters Customers are satisfied with employees expertise Customers are satisfied with bank's trustworthiness Total Mean

Mean 4.03 4.283 4.1565

Assurance is the quality that makes the organisation dearer to the customers. The customers always prefer to have transactions within an organisation that provides them assurance over their transaction. Assurance in service quality means knowledge and courtesy of employees and their ability to inspire trust and confidence. It also includes the factors such as competence, courtesy, credibility and security The respondents are satisfied with the employees expertise in banking. The mean and SD response for the factor is 4.03 and 0.74. The satisfaction level of the respondents regarding the trustworthiness of the organisation is satisfactory as the mean and SD value for the same is 4.283 and 0.78. The respondents have the mean response for the assurance provided by the organisation as 4.1565, which indicates that the customers are very much satisfied. The respondents consider that the employees are having the knowledge and courtesy and they are able to inspire trust and confidence among the clients.

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5.4.5 Empathy Factors

Table 5.29: Empathy Parameters Standard Deviation 0.60 0.83 0.49 0.62

Empathy Parameters Queuing time in bank Timeliness Helps Customers Individual attention Total

Mean 4.2 4.083 4.167 4.23 4.17

Empathy can be defined in service quality as the method of access, communications and understanding the customer. It also means caring and individualized attention that the firm provides to it customers. The bank does not make its customers to stand in a queue for a long time as the mean and SD value for the factor is 4.2 and 0.60. The mean and SD response for the factor timeliness is 4.083 and 0.83 which indicate that the employees enact transactions on a timely manner to their customers, The respondents agrees that the employees helps customers in their transactions and they also provide individualized attention to each and every customer as their mean values are 4.167 and 4.23 and corresponding SDS are 0.49 and 0.62. The respondents have the mean response for the empathy factor as 4.17 which indicate that the customers are satisfied with the individualized attention provided by the bank.

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5.4.6 Overall Service Quality Factors

Table 5.30: Overall Service Quality Factors Service Quality Parameters Tangibility Reliability Responsiveness Assurance Empathy Total The service Mean 3.65 3.94 4.19 4.16 4.17 4.02 quality is a Rank 5 4 1 3 2

diagnostic tool that uncovers a firms strength and weakness. The service quality is the expectation that the customer has while he is availing the service. When the perception of the service meets the expectation, the customer is satisfied. In this project, service quality of the firm was measured using the tool SERVQUAL. In this model, service quality as a whole is expressed in five dimensions. They are tangibility, reliability, responsiveness, assurance and empathy. From the response of the respondents, the responsiveness that is expressed by the organisation that is willingness to help customers and provide prompt service, is the most satisfying factor among the service quality parameters, the mean response for the same is 4.19. The second most satisfying factor is empathy, care and individualized attention by employees to customers. The mean response for the factor is 4.17. The parameter that satisfies the customer is tangibility. Tangibility refers to appearance of physical facilities, equipment, personnel and communication materials .The mean response is 3.65. The total mean score given by the respondents for the service quality parameter as a whole is 4.02, which implies that the respondents are satisfied with the service quality provided by the organisation. The most satisfying parameter among the service quality is responsiveness, while the least satisfying parameter is tangibles. The organisation must
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concentrate on improving the exteriors of the bank to be more visually appealing like new generation banks, interiors of the bank and must use latest technology devices for communication inorder to appeal the young generation. The overall satisfaction level on the service provided by the bank to their customer is highly satisfactory. This is evident as the mean value is 4.02.

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5.5

HYPOTHESES TESTING

Hypothesis refers to a proposition or set of propositions set forth as an explanation for the occurrence of some specified group of phenomena either asserted merely as a provisional conjecture to guide some investigation or accepted as highly probable in the light of established facts. A research hypothesis is a predictive statement, capable of being tested by scientific methods, that relates an independent variable to some dependant variable.

After analysing the data, hypothesis is tested. The hypotheses in this study are tested through the use of ANOVA and independent sample t-test. Hypothesis testing will result in either accepting the hypothesis or rejecting in it.

For the study, 4 hypotheses have been formulated. The hypotheses are

HA1: There is a significant difference in the satisfaction level of the customers based on their job classification regarding the service quality offered by the organisation.

HA2: There is a significant difference in the satisfaction level of the customers based on their gender regarding the service quality offered by the organisation.

HA3: There is a significant difference in the satisfaction level of the customers based on their education regarding the service quality offered by the organisation.

HA4: There is a significant difference in the satisfaction level of the customers based on their age regarding the service quality offered by the organisation

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5.5.1 Job Profile vs. Satisfaction Level

The respondents of the study have different job profiles. The satisfaction level of respondents having white collar jobs varies from those having a blue collar job. Earlier one expects high service quality while later one expectation is less. So, the satisfaction level of customers varies on the basis for their job profile. To analyse whether there is any significant difference on the satisfaction levels among the customers based on their jobs, following null hypothesis is formulated. Null Hypothesis H01: There is no significant difference in the satisfaction level among the customers based on their job classification on the service quality offered by the organisation. To test the above null hypothesis, ANOVA is used. The following tables 5.31 and 5.32 shows the descriptive statistics and ANOVA results. Table 5.31: Descriptive Statistics: Job Profile vs. Satisfaction Level

Occupation Business Govt. Employee Employee Retired Unemployed Total

Number of Respondents 11 7 28 2 12 60

Mean 68.45 69.14 67.86 72.5 67.75 68.25

Std. Deviation 8.311 5.521 6.895 4.95 4.413 6.438

Minimum 53 61 58 69 61 53

Maximum 85 78 82 76 74 85

Table 5.32 ANOVA Result: Job profile vs. Satisfaction Level Sum of Squares Between Groups Degrees of Freedom (df) 4
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Mean Square 12.372

Sig.

49.487

Within Groups Total

2395.763 2445.25

55 59

43.559

0.284

0.887

From the above table F value is 0.284 and the significance level value .887.As the significance value is greater than 0.05 we accept the null hypothesis at 5per cent level of significance. Hence we conclude that there is no significant difference in the satisfaction level among the customers based on their job profile.

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5.5.2 Gender vs. Satisfaction Level

The respondents of the study fall in both genders. The satisfaction level of customers varies on the basis for their gender profile. Generally, males prefer higher service quality compared to female. This test is to analyse whether there is any significant difference on the satisfaction levels among the customers based on their gender following null hypothesis is formulated Null Hypothesis H02: There is no significant difference in the satisfaction level among the customers based on their gender on the service quality offered by the organisation. To test the above null hypothesis independent sample t-test is used. The following table shows independent sample t-test of gender profile and satisfaction level Table 5.33: Independent sample t-test: Gender vs. Satisfaction Level

Gender Male Female

N 31 28

Mean 67.55 68.93

Std. Deviation 6.791 6.164

t -0.814

Sig (2-tailed) 0.417

From the above table, p-value is greater than .05 we accept the null hypothesis at 5per cent level of significance. Hence it can be concluded that there is no significant difference in the opinion of males and females regarding the service quality delivered by the organisation.

5.5.3 Education Profile vs. Satisfaction Level

Education is an important determinant of service quality. The satisfaction level of customers varies on the basis for their education profile. An educated person expects a high service quality compared to an uneducated. To analyse whether there is any significant
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difference on the satisfaction levels among the customers based on their education, following null hypothesis is formulated

Null Hypothesis
H03: There is no significant difference in the satisfaction level among the customers based on their education on the service quality offered by the organisation. To test the above null hypothesis ANOVA is used. The following tables 5.34 and 5.35 shows the descriptive statistics and ANOVA results. Table 5.34 Descriptive Statistics: Education Profile vs. Satisfaction Level No. of Respondents 8 12 23 16 1 60 Std. Deviation 7.344 6.293 5.187 7.191 . 6.438

Occupation Matriculate Higher Secondary Graduate Post Graduate Doctorate Total

Mean 72.75 66.83 66.78 68.88 73 68.25

Minimum 58 53 61 60 73 53

Maximum 80 76 81 85 73 85

Table 5.35: ANOVA Results: Education Profile vs. Satisfaction Level Sum of Squares Between Groups Within Groups Total 264.42 2180.83 2445.25 Df 4 55 59 Mean Square 66.105 39.651 1.667 0.171 F Sig.

From the above table F value is 1.667 and the significance level value is 0.171. As the significance value is greater than 0.05 we accept the null hypothesis at 5per cent level of
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significance. Hence it can be concluded that there is no significant difference on the satisfaction level among the customers based on their education profile.

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5.5.4 Age Profile vs. Satisfaction Level

The satisfaction level of customers varies on the basis of their age. Youth prefers high service quality compared to old people. To analyse whether there is any significant difference on the satisfaction levels among the customers based on their age, following null hypothesis is formulated

Null Hypothesis
H04: There is no significant difference in the satisfaction level among the customers based on their age on the service quality offered by the organisation. To test the above null hypothesis ANOVA is used. The following tables 5.36 and 5.37 shows the descriptive statistics and ANOVA results. Table 5.36: Descriptive Statistics: Age Profile vs. Satisfaction Level No. of Respondents Between 15 and 25 Between 25 and 40 Between 40 and 60 Greater than 60 Total 4 46 7 3 60 Mean 75 67 69.43 75.5 68.25 Std. Deviation 6.608 5.873 5.503 8.718 6.438 Minimum 66 53 61 69 53 Maximum 80 82 76 85 85

Table 5.37 ANOVA Results: Education Profile vs. Satisfaction Level Sum of Squares 428.536 2016.714 Degrees of freedom 3 56 Mean Square 142.845 3.967 36.013 0.012 F Sig.

Column1 Between Groups Within Groups

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Total

2445.25

59

From the above table F value is 3.967 and the significance level value is 0.012. As the significance value is less than 0.05 we reject the null hypothesis. Hence it can be concluded that there is a significant difference between age profile and satisfaction level of IOB customers. The least mean value, 67, is for the age group between 25 and 40 that is youth and the highest mean value, 75.5, is for the age group greater than 60 years. It can be inferred that youth are least satisfied by the banks service quality while old people are highly satisfied. Inorder to retain the young customers, the bank must take appropriate strategies like better customer service.

In this chapter, the collected data were coded and converted into numerals. The coded data was tabulated that is the classified data were put in the form of tables based on various service quality parameters.. Analysis work was done after tabulation.

CHAPTER 6 FINDINGS, SUGGESTIONS AND CONCLUSION

The study of the customer perception on service quality delivered by Indian Overseas Bank is relevant to the organisation as it gives a clear insight into the way in which the customers regard the organisation. The level of satisfaction on different parameters of service quality provides the organisation an opportunity to improve their offered services. Questionnaires were distributed among the 60 customers and the required data were collected. The
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collected data were quantified and the customers perception on service quality was assessed. For analyzing the data, tools such as t-test and ANOVA were used. In this final chapter finding of the study, suggestions to the bank for improvement based on the study and general conclusions are drawn. This chapter is divided in to three sections: Findings, Suggestions and Conclusion.

6.1 Findings of the study

The sample size of the study was 60 customers of IOB, Puthencavu. The demographic factors of the respondents were collected for preliminary analysis. They are summarized as follows .The majority of the customers who comes to bank for carrying out transaction are males. Majority of the customers are in the age group between 25 and 40. Private

employees are the majority customers for the organisation. Majority of the customers were degree holders. Majority of the customers are in the income group between 1 and 5 Lakhs. Majority of the customers are long time customers who have been banking with IOB for more than 5 years.

6.1.1 Service Quality Parameters

The study gives a clear understanding of the current trend in the customer perception of the organisation. The customers were made to answer the questions which were framed based on the service quality parameters of tangibility, reliability, responsiveness, assurance and empathy. This gives the customer perception on the service quality delivered by the organisation. The customers response along the five parameters can be summarized as, 1. With reference to tangibility parameter, 4 factors were considered. They are exteriors of the bank, interiors of the bank, neat appearance of employees and interior space. The respondents have their mean response for the tangibility

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parameter as a whole as 3.65, which indicate that the respondents are satisfied with the tangibility parameter .The customers are highly satisfied with the exteriors and interiors of the bank. While a majority of them were not satisfied with arrangement of the office and appearance of the personnel. 2. With regard to reliability of the firm, 3 factors were considered. They are error free service by the employees, confidentiality in transactions and providing information about the bank to the customers. The respondents have the mean response for the reliability parameter as 3.94, which indicate that the customers are satisfied with the reliability of the organization. The customers are satisfied with the error free service provided by the employees and information provided by the bank. Some of the respondents are not satisfied with the confidentiality an employee maintains for loan transactions. 3. When the responsiveness factors were considered, 4 factors were taken. They are employees politeness, knowledge, manners and their relationship with customers. The respondents have the mean response for the responsiveness parameter as 4.19 which indicate that the respondents are highly satisfied with all the responsiveness factors. 4. With reference to assurance parameter, 2 factors were considered. They are knowledge and courtesy of employees and their ability to inspire trust and

confidence. The respondents have the mean response for the assurance provided by the organization as 4.15, which indicates that the customers are satisfied with the assurance factors. 5. Lastly with the empathy factor, 4 factors were considered. They are queuing time in bank, timeliness of transactions, helping mentality of employees and individualized attention provided by employees to customers. The respondents have the mean

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response for empathy factor as 4.17 which indicate that most of the respondents were highly satisfied with the caring and individualised attention that the bank provides to its customers.

6.1.2 Overall Customer Perception

The customer perception on the overall service quality of the organisation can be summarized as, 1. The majority of the customers of the bank regards that the service quality of the organisation meets their expectations. They are satisfied with the quality of service offered to them. 2. Customers are very much satisfied with the responsiveness expressed by the organisation among the overall service quality factors, empathy is the second most factor followed by assurance, reliability and tangibility. The respondents are least satisfied with the tangibility factor especially the interiors of the bank and employees appearance.

6.1.3 Influence of Demographic Factors

Hypotheses testing were used to find whether demographic factors like gender, age, education and income have any influence on service quality. The findings from the hypotheses testing can be summarized as, 1. There is no significant difference of satisfaction about the service quality offered by the organisation among the male and female respondents. 2. There is no significant difference in the satisfaction level among the customers based on their job profile regarding the service quality of the organisation.

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3.

There is no significant difference in the satisfaction level among the customers based on their education profile regarding the service quality of the organisation.

4.

There is a significant difference in the satisfaction level among the customers based on their age profile regarding the service quality of the organisation. It was found that the respondents who are in the age group between 25 and 40 are least satisfied and those who are in the age group above 60 are highly satisfied with the service provided by the bank.

Summary of Findings
Customers are satisfied with the service quality of the organisation. Customers are very much satisfied with the responsiveness expressed by the organisation and least satisfied with the tangibility factor among the overall service quality factors.

It was found out from the hypotheses tests that there is no significant difference in the satisfaction level among the customers based on their job, gender and income. While there is a significant difference in the satisfaction level based on age group. The satisfaction level of respondents who are in the age group between 25 and 40 years is significantly lower than the respondents whose age is above 60 years.

6.2

Suggestions of the study

The study implies that the customers are almost satisfied with the services provided by the organisation. Even though the service quality of the organisation is well perceived by the customers, there is a need for improving the quality of service by the organisation due to the intense competition in the banking sector. For retaining the quality of service and to improve the same, the following suggestions can be adopted.

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1.

Majority of the respondents are not satisfied with the appearance of the employees. In order to rectify it, employees must be given training on proper dressing and appearing neat. Good looking uniforms must be provided to employees.

2.

The respondents are not satisfied with the interior arrangement of the bank. In order to satisfy the customers, the bank must arrange the office furniture in a neat and orderly manner which will provide enough work space for the customers to carry out their transactions.

3.

The bank must maintain confidentiality of each customers transactions to create confidences in the banking system and to provide comfort for the people that their transactions with the bank will not be exposed to the public or disclosed, except in cases where so permitted by law. The bank must penalize board members or employees who disclose customers transaction details.

4.

People who are in the age group between 25 and 40 years of age are not satisfied with the service quality provided by the bank. In order to retain the existing and attract new young customers, the bank must make effort to make them aware of Core Banking Solutions (CBS) and Real Time Gross Settlement (RTGS) transfer services provided by the bank which will help them to transfer money across the globe within minutes.

5.

During the project period it was observed that customers use the bank only for depositing and withdrawing money. The customers should be given information on various agency services like payment of telephone bills provided by the bank so that they will be able to utilize those services properly.

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6.

Most banks are diversifying their business nowadays. As a part of diversification, banks sell insurance nowadays. Employees must make efforts to market and sell the insurance products to the banks customers.

7.

Some of the respondents consider that employees are unaware about the latest trends in banking. So, employees must be given training on the emerging trends in the financial sector in order to make them knowledgeable to answer to all type of customers queries.

8.

Talking to customers directly about his expected service quality is the only solution to improve service quality. Make the customers also a part in designing

communication efforts with the help of customer service executive.

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6.3

Conclusion

The project identifies customer perception regarding the service quality of Indian Overseas Bank. The key to successful service quality management is to strengthen the relationships with clients and employees. The study reveals that Indian Overseas Bank is successful in maintaining an effective relationship with its clients. Management is successful in implementing service quality processes and services. The shortfalls identified can be effectively tackled through innovation strategies. The resolution of such problems will help the bank to attain high growth in the financial sector. The focus must be keep long term relationships with clients who are in position to become high net worth clients for the organisation at some later stages. The study was conducted by following SERVQUAL methodology. It is a set of comprehensive service attributes that could be used to measure service performance which was identified by Parsauraman, Zeithaml and Berry (PZB). The five dimensions in the SERVQUAL are tangibles, reliability, responsiveness, assurance and empathy. The questionnaire was prepared based on these five parameters. Knowing how customer perceive the service quality and being able to measure service quality can benefit industry professionals in quantitative and qualitative ways. The measurement of service quality provides specific data that can be used in quality management. Assessing service quality and better understanding how various dimensions affect overall service quality would enable organisations to effectively design the service delivery process and bring in value additions and innovations thus creating service excellence. By identifying, the strength and weakness pertaining to the dimensions of service quality can better allocate resources to provide better service and ultimately better service to customers.

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The study of service quality is both important and challenging from an organisation point of view. Future efforts should continue to advance the understanding of the concept and the means to measure and improve service quality along with innovations in service delivery.

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