Kamla-Raj 2011

J Economics, 2(1): 45-56 (2011)

A Comparative Study of Banking Services and Customer Satisfaction in Public, Private and Foreign Banks Surabhi Singh and Renu Arora*
Department of Resource Management, Gujarat Agricultural Dantiwada, Gujarat, University, *Department of Resource Management, Institute of Home Economics, India Delhi University, Delhi, India

KEYWORDS Transaction Based Banking Services. IT Enabled Banking Services. Customer Satisfaction. Service Quality ABSTRACT The bank system is facing challenges with stiff competition and advancement of technology. It becomes for service imperative providers to meet or exceed the target customerssatisfaction with quality of services expected by them. present research attempted to study customers perception of quality of services, both transaction based and IT enabled Hence, the of its constituent factors in public sector, private sector and foreign banks. Also through the present study, we would in terms extent of gauge theIT adoption in public sector, private sector and foreign banks in this e-age. The present investigation was the objective planned withto assess the extent of use of services especially the IT enabled services in these banks and to analyze the factors affecting customer satisfaction with the quality of services. The present study was conducted in public sector, constituent sector privateand foreign banks of Delhi. Multistage random sampling was used for selection of sample. The study was conducted in five zones (East, West, North, South, and Central) of Delhi. One branch of the above banks in any zone proposed to be was selected randomly. While selecting the branch, care was taken to see that branch should provide at least five of Delhi services. This IT enabled step was followed to have Intra Bank comparison. The study shows that the customers of nationalized not satisfied banks were with the employee behavior and infrastructure, while respondents of private and foreign banks were not with high satisfied charges, accessibility and communication.

1. INTRODUCTION Banks play a role of considerable economic significance as intermediaries in public savings and channelising the flow mobilizing funds for productive purposes, keeping on the of process of the economic growth of the country. Realizing the importance of the role of banks in economic development, Government the of India/Reserve Bank of India took major initiatives after the country attained several dependence to gear the banking system to serve inthe national One of objective. the most momentous of such initiatives was the substitution of private ownership by public ownership, through the medium of ordinance, of the 14 largest commercial an in the banks private sector on 19 July 1969. This popularly come to be known as nationalization has of these banks without which it would not have
Address for Dr. Surabhi Singh correspondence: New Hostel Warden Behind House, Gils Dantiwada Gujarat Agricultural Hostel, District University, Gujarat, Banaskantha, Telphone/Mobile: India E-mail: 09429429169 surabhi1882@yahoo.co.in

been possible to transform the class banking into mass banking and align bank credit to the planned priorities and social needs. serve expansion Branch programmes formulated by the Reserve Bank of India aimed at making necessary banking facilities in all parts of available country specially the unbanked rural and the urban semi- areas. This was perceived as essential implementation of project for rural development for and upliftment of economically weaker sections and also spreading the banking habit even the in remote areas of the country. Banks assisted in the rehabilitation of weak industrial units and in the prevention sickly unemployment, which would result from the of closure of industrial units for want of credit. Measures thus mentioned substantially contributed to the channelising of the bank credit the to various sectors of the economy which involved inter alia, flow of credit to sectors, which were hitherto neglected or the so called priority sectors. An efficient financial sector is an engine economic growth. It converts the fuel of savfor ings into kinetic energy for the economy. banking industry which is at the core of The financial sector must take the lead. The the process reform started in the 90s has given the indus-

46 try a great opportunity. Not only must sector the become more efficient it must also tify sectors having growth opportunities and idendevise strategies to move savings into sectors. these 1.1. Current Scenario Currently, overall banking in India is considered as fairly mature in terms of product range and reach even though reach supply, rural in India still remains a challenge for private sector and foreign banks. Well- computhe terized foreign banks are beginning to seriously compete with the nationalized banks. They at a profitable and wealthy part of the aim and, in market contrast to the nationalized banks, do not recognize any social responsibilities to small account holders or to a rural and semi urban clientele. Almost 80% of the businesses are still controlled by Public Sector Banks (PSBs). PSBs are still dominating the commercial system. banking The bank system is facing the with stiff competition and advancement challenges technology, the services provided by banks of have become more easy and convenient. competitive character has been promoted The facilitating the entry of foreign banks. The by ntry cou- is flooded with foreign banks and ATM their stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking are introduced. The tire en- system has become more convenient swift. and Time is given more importance money. than 1.2 Banking Services With years, banks are adding services to customers. The Indian banking industry their passing through a phase of customers market. is The customers have more choices in choosing their banks. A competition has been within the banks operating in established The India. new age IT (Information Technology) bringing about sweeping changes in the is ing industry, forcing them to re-engineer bankof their many basic processes and systems. Few of the technology-driven electronic banking services being offered are viz. Automated Teller chines Ma- ATM, Electronic Clearing Service (ECS), Electronic Funds Transfer (EFT), tele-banking,

SURABHI SINGH AND RENU ARORA

internet banking etc. New technological bilities capa- could be effectively used to create and to better manage customer value Reddy (2001) stated Banks are at different relationship. stages of technology adoption partly due to their different legacies, as much as the differences their in strategic approaches to and technology absorption. computerization The foreign banks are ahead in better banking services and products, coupled offering with smart use of IT adoption and have erably consid-achieved high operational (RBI 2001). efficiency Vyas P (2004) concluded that there effective implementation of e-banking was in case of private banks and foreign services whereas, banks, nationalized banks were found to have lesser degree of computerization. Dr. Rangarajan, the former Deputy Governor, Reserve Bank of India, says Indian banks have to conform to international accounting standards, if Indian banks are to get their place due and recognition in the global market (Jankiraman financial 1994). 1.3 Banking Technology Financial reforms had its impact on banks and financial institutions. In the Indian changing financial environment, fierce fast petition com- and changes in the regulatory created uncertainty and risk for the policies banking Indian industry. Realizing this fact, cians and academi- practitioners highlighted in their dies stu- that information source in banks is of capital importance and they look at information technology as strategic response to changing financial environment/challenges 1996). The (Ammayya Rangarajan Committee (1989) was the first path breaking step in Report direction, which highlighted that this zation must computeri- be looked upon as a means to prove im- customer service and efficiency and the thatbanks workforce should realize that mechanization would lead to growth and loyment emp- expansion (Bide 1997). Subsequently, Narasimham Committee (1992), while lighting the problems faced by Indian highsector public banks, and, as an antidote to the identified lacunae, also stressed the need for greater measure of computerization in banks. The mittee com- observed that modern banking a great deal of processing of mass of informainvolves

ACOMPARATIVE STUDY OF BANKING SERVICES AND CUSTOMER SATISFACTION

47

tion and commitment to technology is the only solution that ensures timeliness, accuracy and resultant improved performance and enhanced customer service (Bide 1997). On similar several academicians and practitioners lines, that technology in banks would help to increase argued the level of productivity and customer satisfaction (Girish and Preetha 1997). To meet challenges posed by the entry of foreign banks, the Indian banks will have to invest heavily in nology tech- to meet competition, reduce cost, improve customer service, improve productivity and offer new products/services. Technology in service organizations is portant for success. Some scholars have studied imtechnology in service organizations from different perspectives. Harsh (1993) studied neficial aspects of technology and befive major benefits of technology to a service identified organization. First, the equipment could employed in place of work force. Such substibe tution of equipment and machines for reduces labour cost of operation and increases efficiency. Second, introduction of technology may help to achieve standardization in the quality service. Third, higher service levels could of achieved by such blending of technology. Fourth, be service organizations can maintain close with links their customers by hooking up in the puter com- net works such technologies permit one firm to link itself with the information of the other and, thereby, be in touch. Finally, system technology may be useful in directing ees behaviour and enhancing status and employvation. motiAmmayya (1996), along with Godse (1997), while appreciating the introduction of tion technology in banks, stressed on training informaneeds of people who play crucial role in turning the hardware and software and networking tools into a powerful combination to aid the bank improving the service quality and in Salma (1998) performance. studied technological reforms in the banking sector. The emphasis on technology as the key factor for improving performance and increasing productivity in banks has well exemplified by her through been Most Indian illustrations. banks, mainly private ones, hastening to interconnect their are branches (Aishah 1997). Keeping on the countrywide of promoting speed, SBI has lines Electronic Fund Transfer Systems (EFTS) in introduced thirty branches in sixteen cities in two mes, State Bank Instant Remittance (SBIR) scheand

State Bank Rapid Remittance (SBRR) when mittances are made the same and the next rerespectively (Shanker 1995). day Many authors, while studying customer service and bank marketing, have observed the that need for computerization/bank tion has automa-arisen because customers expect their cheques to be encashed within a reasonable time, prompt realization of clearing cheques, a transfer quick of funds and timely receipt of correct statements of their accounts etc (Chidambaram and Alamelu 1996). All this can be possible banks are automated. if 1.4 Customers Satisfaction A customer can be defined as a user or potential user of banking services. A would include an account holder, or his recustomer presentative, or a person carrying out casual business transactions with a bank, or a person who, on his own initiative, may come the banking fold (Talwar Committee within 1976). Report The efficiency of a banking sector upon how best it can deliver services to depends target customers. In order to survive in this its competitive environment and provide customer satisfaction, the providers of banking continual services are now required to continually improve the quality of services. The globalization Indian economy has truly called for much more of disciplined approach on the part of Indian ing sector to improve the overall quality bankcustomer services through smart use, absorpof tion and adoption of flexible and appropriate information technology. It is seen that 5% increase in retention can increase profitability by customer in banking business, 50% in insurance 35% brokerage, and 125% in the consumer and card market. Therefore, banks are now strescredit sing on retaining customers and market share increasing (Chothani et al. 2004). A favorable climate for excellent manifests itself in employee behavior, for exservice ample, being attentive to customers, favorably about the organization and its servispeaking ces. With frequent employee-customer contact, customers are more often exposed to such positive behaviors, which in turn, affect satisfaction. customer To sum up, the adoption of technology in

48 banks is increasing with the growing use Internet, electronic commerce, and of other banking innovations. Evolution of techvarious nology in banks is taking place at an enormous pace and it is only question of time before commit banks themselves on full-scale technology up gradation, aiding their growth and their competitive features. The computer adding the and communication age is opening up a of new flood opportunities that are redefining very concept of traditional banking. It is the the for individual banks to reinvest and reconfigure their business processes and themselves practices in tune with the growing expectations in an ever increasing customer ve environment. There is no way, a bank competitiremain lukewarm to new technology products can and yet hope to grow because it is a choice of survival or extinction. In such a competitive environment, ncial institutions are forced to examine finaperformance because their survival in their dynamic economies of the coming years the be dependent upon their overall efficiencies. will response, banking firms have been trying In adopt and to adjust themselves to to their efficiencies in the changing social improve economic environment. The efficiency of and b a anking sector depends upon how best it can deliver services to its target customers or how far the expectations of customers are met. Any service to be provided to the customers can be differentiated by the service provider from rest the of the service providers if it posses some unique selling proposition. The customers compare the perceived service with the service. The customer perceives the service expected lity qua-to be high if it is perfect on his This perception leads to customer satisfaction expectation. with the related service. In the present customer satisfaction is an interesting time, dynamic concept. It is a concept, which and from time to time. What is considered as varies customer good services today may be termed tomorrow. IT strategies therefore, need to be in bad proper consonance with banks marketing strategies. Customers are now demanding individualistic and are no longer willing to an cept ac- delay in transactions. A customer view has centric replaced the earlier product view centric . Therefore, it becomes imperative for service providers to meet or exceed the customers satisfaction with quality of services target

SURABHI SINGH AND RENU ARORA

expected by them. Hence, the present will attempt to study customers perception of research quality of services, both transaction based and IT enabled in terms of its constituent factors public sector, private sector and foreign banks. in Also, the present study attempts to identify lacunae, if any, that exists which might good customer service and in turn, affects cushamper tomer satisfaction. Also through the present study, we would gauge the extent of IT adoption in public sector, private sector and foreign banks in this eage. 1.5 Objectives of the Study Following objectives are planned in present investigation: the - To assess various aspects of services provided by the public sector, private sector and foreign banks. - To assess the extent of use of services especially the IT enabled services in banks. these - To determine and compare the extent customers satisfaction with quality of of banking services on the basis of different constituent factors. 2. RESEARCH METHODOLOGY Research methodology deals with a systematic and scientific methods that can be to solve adopted research problems. Methodology is a crucial step in any research because it influences directly the whole research and its The present study will be carried out to findings. an insight into the customer satisfaction gain with the quality of services provided by level sector, public private sector and foreign banks. 2.1 Research Questions What are the major factors affecting customers satisfaction with the quality of services? What is the level of customer satisfaction with the quality of services provided by public tor, sec-private sector and foreign banks? Do customers switch over to the IT adoption in sector public banks and to which extent? 2.2 Research Design Descriptive research design was chosen to find out various services provided by sector, private sector and foreign banks, the public

ACOMPARATIVE STUDY OF BANKING SERVICES AND CUSTOMER SATISFACTION

49

extent of adoption of IT enabled services among 2.4 Selection of by the for Data Collection Besides cheque deposit and cheque vice introduced Tools bank. On the other services, 40 per cent respondents of PNB were customers provided by banks. private clearing hand, and foreign banks informed their availing locker facilities. The other facility, Selection of appropriate instrument or tetomers for any new service introduced by the cusis, 2.3term deposit was availed by 30 per cent chnique is an important criterion in bank. thatSelection of Locale and spondents. Almost 20 per cent respondents were methodology. The data shows that only 20 per The analysis of tools would comprise of the reSample research availingpresent study was conducted in following: per cent respondents of SBI and The loan and issuance of demand draft cent and 10 cility. private sector and foreign banks of sector,A few respondents (10 percent) were ben- PNB respectively answered positively to fa- public efited Multistage random cash credit Delhi. by mail transfer and sampling was A. Interview the bank about any new informed by Schedule for Customers be All the for selection of sample. facility. used respondents in Canara bank were deor scheme. No respondent answered positive service positing and clearing cheque. AboutIndia was Firstly, a list of top 20 banks in 40 per An Interview schedule was used for collectto be informed by the Canara bank on introdurespondents in Canara bank were the three made. A scrutiny of this list of all made ing base line data of customers, extent to which cent cing any new service or ance of that is, draft. sector, private sector tegoriesdemand public The other facilities and they adopt IT enabled banking services issucascheme. and foreign banks was done. Thereafter, 10 per cent by public of bank private sector and foreign loanlocker were availing by 20 per cent provided sector,customers by getting Distribution respondent. of total number of banks was selected in each banks. Thenew service/scheme schedule was based informationinterview introduced by of each s All the respondents in ICICI deposited t category having the maximum number of and following bank on 12 0 subheadingsn e d cleared nches. cheque, while half of the respondents Different aspects of banking services used bra- Hence, three banks (State Bank of n o 10 0 had taken loan from the bank. No Bank) p Punjab National Bank and Canara other facility by customers India, s e r 80 is being public availed by two banks (ICICI Extent of using IT enabled among sector banks, any respondent of and Cenf o bank. Bank respondents in Centurion BOP turion All theof Punjab) among private sectordeCustomer satisfaction with quality of serICICI e services 60 g a posited and cleared (Standard Chartered) ambanks and one bank cheque. About 10 per cent vices t n 40 e eachforeign bankswere availing locker and loan c ong respondents were selected for the study. Suggestions of customers for improving r e 20 p facility This step was followed to have Inter Bank combanking parison. respondents in Standard Chartered 0 . All the services. SBI PN CANARA ICICI BOP were depositing and clearingto be conducted The study was proposed cheque, while 3. RESULT AND DISCUSSION SC B ban k 10 per in five cent respondents were availing loan faonly zones (East, West, North, South, and different cility from Delhi. One other of the 3.1 Different Bankingbanks Services Availed Central) ofthis bank. Nobranchfacility was led by Customers banks any of the of Delhi was avaiby above in any zonerespondent. selected It domly. While selecting from the study ran- can be concluded the branch, care cheque taken see that branch should provide are All the respondents in each bank were that was todeposition and cheque clearanceat least most ailing facility of cheque deposit and 5 IT enabled banking services among the custhe popular avtomers of all three types of banks. ICICI was clearing. Only one respondent (10 per cent) had After cheque services. identification of branches, the reseafound to be banks. It money lender select rcher visitedthe largestwas planned tobank among taken loan in SBI. About 30 per cent responall the banks. Easy lending of loan and customers randomly from each bank customer dents were using the facility of issuance 10 friendly demand draft, while 20 per cent each a total of 60 customers as sample by making of making approach might be attributed as of the personal visit to this finding. The customers other facilities like locker, mail transfer one reason for the respective branches availed term banks. of ICICI and Standard Chartered bank perceand deposit (Table 1). ive the charges of bank very high on Table 1: Distributionbe bank customers by availing not services. It may of one of the reasons of different services of different bank availing some other services provided by these Canar Services SBI PN ICIC Centurio SC(n=10 banks such as locker, issuance of demand draft, a (n=10 (n=10 Ban (n=10 BO B I n ) (n=10 (n=10 traveler cheque etc. Due to more ) ) k ) P ) ) offers and attractive easy procedure of giving loan, n % n % n % n % n % n % ICICI bank was the largest bank under study Locke 2 20 40 2 20 1 10 in providing loan to the customers. 4 Traveler r
Loa 1 10 2 20 2 cheques Mail 20 1 10 3.2 Different Sources 2 Information about of n Cash New 1 transfer Any credit Service/Scheme Introduced 10 Gift facility Bank by Cheque 10 100 10 100 10 cheques Cheque 10 100 10 100 10 deposit Issuance investigator tried to probe whether the 4 3 30 2 20 The clearing of demand Term 2 20 3 draft informed the customers about any 30 bank Cheque clearing deposit scheme/service launched by- the bank. Itnew enquiry status evident from Figure that is payment facility 1 - nationalized Stop did not of cheque banks inform customers about any new ser20 100 100 40 5 10 10 50 100 100 1 10 10 10 100 100 1 10 10 10 100 100 -

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SURABHI SINGH AND RENU ARORA

YES No

Fig. 1. Distribution of bank customers by information of new service/scheme introduced by bank getting

About 40 per cent respondents were informed by the Centurion BOP on introducing new service/scheme. On the other hand, ICICI Standard Chartered bank informed majority of and the respondents, that is, 60 per cent and 70 per cent respectively about new service/scheme troduced by the bank. inThe reason behind not informing customers about new service/scheme would be poor communication and customer service of nationalized banks. On the basis of above analysis, ICICI bank and Standard Chartered bank have good communication with their customers. 3.3 Information about Availing Loan Customers by The results presented in Table 2 revealed only one respondent in SBI had taken study loan that and only 20 per cent each of the respondents of PNB and Canara bank had taken loan. highest number of the respondents, that is, half The of the total respondents had taken loan from the ICICI bank. Only 10 per cent respondents each from the Centurion BOP and Standard Char-

ACOMPARATIVE STUDY OF BANKING SERVICES AND CUSTOMER SATISFACTION Table 2: Distribution of bank customers by availing loan from the bank Type of SBI PN Canar (n=10 (n=10 Ban loan B a (n=10 ) ) k ) n %% n % n % Car Property loan Two wheeler loan Home loan Personal loan Othe loan r Tota l 1 1 10 10 1 1 2 10 10 20 1 1 2 10 10 20 ICIC (n=10 I ) n 1 1 3 5 % 10 10 30 50 Centurio BO n (n=10 P ) n % 1 1 10 10

51

SC(n=10 ) n 1 1 10 10

tered had taken loan from their bank. Thus, findings are pointed to the fact that the the number highest of respondents availed loan from ICICI bank. Easy and feasible approach of the bank to provide loans to its customers might be one of the reasons of above results. Providing proper information about loan facility to the customers might also be its reason.

a wide range of services, suitable and to the customers and secondly, prompt and effibeneficial cient delivery of these services by the front staff. line To ensure quick delivery of these services, banks have to introduce revolutionary technological changes like Electronic Fund Transfer (ETF), Electronic Clearing Service(ECS), Net Working the Service Branches, Automatic Machines (ATM), modern and up-dated Teller 3.4 Customers Opinion on Charges Levied munication comby the Bank for Different Services An attempt was made to scrutinize facilities. IT differentservices used by customers. enabled The investigator tried to know customers sis of results reveals that no customer was usAnalypoint of view on charges levied by the bank for ing two services, that is, online tax accounting different services. The results of the present insystem and Real Time Gross Settlement vestigation as given in Table 3 highlights (RTGS). ATM was the most common IT System fact the that customers of nationalized banks found service enabledamong customers of every bank. Custhe charges normal levied by the bank for tomers of nationalized banks were using comferent dif- services. On the other hand, private and paratively fewer IT enabled services as foreign banks customers found the above charges red to private and foreign banks (Table compahigh. 4). About half of the respondents were using The reason of the above results would be the ATM in SBI bank, while 30 per cent difference of charges in different types of banks. dents were availing centralized banking responThe charges levied by the bank on different only and 10 per cent were having credit card vices are higher in private or foreign banks serdebit and card. In PNB, ATM and centralized compared to nationalized as ing each was using by 30 per cent respondents, bankbank. while a few of all the respondents, that is, 10 3.5 Different IT Enabled Services Used per cent each using credit card and debit Customers by and cardECS. Majority of the respondents were using ATM, while 20 per cent respondents Sesha Sai (1999) suggests that to overcome availing Electronic Clearing growing customer dissatisfaction banks should were All the respondents adopt two-fold strategy. Firstly, the creation ofin ICICI bank were usServices.
Table 3: Distribution of bank customers by their opinion on charges levied by the bank for different services Services SBI PN Canar ICIC Centurio (n=10 (n=10 Ban (n=10 BO B a I n (n=10 (n=10 ) ) k ) P ) ) n %% n % n % n % n % High Normal charges charges Tota l 1 9 10 10 90 100 1 9 10 10 90 100 2 8 10 20 80 100 8 2 10 80 20 100 3 7 10 30 70 100 SC(n=10 ) n 6 4 10 60 40 100

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Table 4: Distribution of bank customers by using IT enabled services IT enabled SBI PN Canar (n=10 (n=10 Ban services B a (n=10 ) ) k ) n %% n % n % Electronic clearing Electronic services fund Utility transferpayment Interactive services voice system response Credit card and debit enquiry ATM card Internet Centralized banking Online tax banking Foreign exchange accounting RTGS system 1 5 3 10 50 30 1 1 3 3 10 10 30 30 2 6 20 60 -

SURABHI SINGH AND RENU ARORA ICIC (n=10 I ) n 3 1 1 4 10 2 2 1 % 30 10 10 40 100 20 20 10 Centurio BO n (n=10 P ) n % 10 100 SC(n=10 ) n 2 2 1 10 10 1 2 1 20 20 10 100 100 10 20 10

ing ATM, while about 40 per cent respondents were using credit card and debit card and per 30 cent respondents were using ECS. About 20 per cent each were availing internet banking centralized banking. A little respondents, and is, 10 that per cent were availing utility payment vices and interactive voice response system serquiry. en- All the respondents in Centurion BOP were using ATM in Centurion All BOP. the respondents in the above bank were using ATM and credit card and debit card. 20 per cent each were availing other About that is, ECS, EFT and centralized services, while 10 banking, per cent respondents each were ing Interactive voice response system availInternet enquiry, banking and The RTGS. analysis of data reveals that a few spondents in Delhi were availing IT reservices enabled other than ATM. No respondent in any above bank was using online tax accounting and foreign exchange system. The dents were asked about the reasons of not using responIT enabled services and they mentioned reasons various such as security, no facility, no awareness and no need. Banks should create more awareness regarding all Information Technology enabled services among customers should put more efforts in increasing security and features of these services. The findings are in tune with the done in Nigeria. It is revealed from the study that among the e-banking processes adopted study by Nigerian banks, ATM was the most patronized by customers (Central Bank of 2007). In Nigeria addition, it was found that nal dispositions significantly influenced attituditheir

ATM usage. Similarly in their research, (2009) KPMG found that Nigerian bank customers give special consideration to IT particularly Although, it seems that Nigerian banks customATM. ers are increasingly associating quality of services bank with online real time, they are now more alert and meticulous in choosing banks to patronize (Idowu et al. 2002). 3.6 Customers Satisfaction with Quality of Services Customers satisfaction was assessed with five parameters of quality of services, i.e., ployee behavior, accessibility, ambience, emstructure and working hours. infraTable 5 shows that majority of the respondents were not satisfied with employee ior in SBI behav- (60 per cent), PNB (70 per cent) and Canara bank (70 per cent). On the contrary, majority of the respondents were satisfied with employee behavior in private and foreign i.e., ICICI (60 per cent), Centurion BOP (80 per bank, cent) and Standard Chartered (80 per cent). It shows that customer satisfaction with employee behavior was higher in level and foreign banks than nationalized banks. private would be due to strong management system of It the above banks. In an attempt to overcome the customer dissatisfaction, several researchers growing (Harsh 1993; Muniraj 1994; Nageswar Sundaram 1984; and Tandam and Sanjay 1987; have emphasized training and development 1994) bank of personnel, employee motivation, procedures and systems, customer education, ana-

ACOMPARATIVE STUDY OF BANKING SERVICES AND CUSTOMER SATISFACTION Table 5: Distribution of bank customers by satisfaction with quality of services Quality SBI PN Canar servic (n=10 (n=10 Ban of B a (n=10 e ) ) k ) n %% n % n % Employee Satisfie Behavior Not d Tota satisfied Accessibilit l y Satisfie Not d Tota satisfied Ambienc l e Satisfie Not d Tota satisfied Infrastructure l Satisfie Not d Tota satisfied Working l Satisfie Hours Not d Tota satisfied l 4 6 10 9 1 10 5 5 10 3 7 10 6 4 10 40 60 100 90 10 100 50 50 100 30 70 100 60 40 100 3 7 10 3 7 10 8 2 10 3 7 10 5 5 10 30 70 100 30 70 100 80 20 100 30 70 100 50 50 100 3 7 10 2 8 10 4 6 10 6 4 10 2 8 10 30 70 100 20 80 100 40 60 100 60 40 100 20 80 100 ICIC (n=10 I ) n 6 4 10 8 2 10 7 3 10 6 4 10 8 2 10 % 60 40 100 80 20 100 70 30 100 60 40 100 80 20 100 Centurio BO n (n=10 P ) n % 8 2 10 6 4 10 5 5 10 4 6 10 8 2 10 80 20 100 60 40 100 50 50 100 40 60 100 80 20 100

53

SC(n=10 ) n 8 2 10 1 9 10 10 10 10 10 10 10 80 20 100 10 90 100 100 100 100 100 100 100

lysis of individual customer behaviour implies which the banker to have training in logical and social aspects, opening of psychocounters on busy days (pay days, examination extra fee pay days etc.) and display of day to changes in rules and regulations which day improve understanding between both bank staff will and its customers. Almost all the respondents, that is, 90 per cent were satisfied with the accessibility SBI, of while majority of the respondents, that is, 70 per cent and 80 per cent were not satisfied with the accessibility of the PNB and bank. Canara On the other hand, majority of the ondents were satisfied with accessibility respICICI (80 per cent) and Centurion BOP (20 per of cent). Further the investigator found that a few of the respondents, that is, 10 per cent were satisfied with the accessibility of Standard tered Char-bank. The reason of the above findings might attributed that SBI has maximum number be branches and ATMs in Delhi in comparison of PNB to and Canara bank. Among private ICICI banks,and Centurion BOP have the branches in maximum Delhi. The ICICI bank has a number good of ATMs also. Standard Chartered has only 12 Branches in Delhi and a few of ATMs, numbers so people have faced accessibility problem.

The analysis of data shows that half of the respondents were satisfied with the of SBI, while majority of the respondents were ambience satisfied with the ambience of PNB. A little than half (40 per cent) of the respondents in less Canara bank were satisfied with the of bank. ambienceOn the other hand, majority of respondents, that is, 70 per cent respondents the were satisfied with the ambience of bank and half of the respondents were satisfied ICICI with the ambience of Centurion BOP. All respondents were satisfied with the the of Standard ambience Chartered bank. This is the era of technological and the banking is highly competitive. advancement computerized private and foreign banks Wellbeginning to compete seriously with the are nalized natio- banks. Banks are trying to get omers cust- attention and good ambience be the would part of this competition. It would the be reason of great satisfaction of respondents with ambience of almost all the Another factor of quality of service, measured banks. by the investigator, was infrastructure of the banks. The figures in the Table 5 shows that f aew respondents, that is, 30 per cent each were satisfied with the infrastructure of SBI PNB, and while 60 per cent respondents satisfied with the infrastructure of Canara bank. On the other hand, majority of the respondents, i.e., 60 per cent were satisfied with the infrastructure

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SURABHI SINGH AND RENU ARORA Centurio BO n (n=10 P ) n % SC(n=10 ) n

Table 6: Distribution of bank customers by nature of complains made to branch officials Nature SBI PN Canar ICIC complain (n=10 (n=10 ban (n=10 of B a I (n=10 s ) ) k ) ) n %% n % n % n % They Ever Complai Made n Ye No s Tota Nature of l Cheque Complain Draft delay Extra delay charges Loan applicable Response for delay Solve Complain Unsolve d Takes d time

1 9 10 1 1 -

10 90 100 10 10 -

2 8 10 1 1 1 1

20 80 100 10 10 10 10

3 7 10 2 1 2 1

30 70 100 20 10 20 10

1 9 10 1 1 -

10 90 100 10 10 -

2 8 10 1 1 1 1

20 80 100 10 10 10 10

1 9 10 1 1 -

10 90 100 10 10 -

of ICICI bank and a little less than half the of respondents were satisfied with the infrastructure of Centurion BOP. On the contrary, all the respondents were satisfied with infrastructure of Standard Chartered bank. the More respondents of private and foreign banks were satisfied with infrastructure of their banks in comparison to national banks. Majority of the respondents, that is, 60 per cent were satisfied with working hours of the SBI, while half of the respondents in PNB were satisfied with working hours of the bank, while a little of the respondents, i.e., 20 per cent respondents were satisfied with working hours of Canara bank. On the other hand, majority of respondents, that is, 80 per cent were not satisfied with working hours of ICICI and Centurion BOP, while all the respondents of Standard Chartered were satisfied with the working hours of bank. Working hours are longer in the private foreign banks rather than nationalized and Similarly, Metawa and Almossawi bank. observe that bank selection criteria have (1998) heavily been investigated over the past two (Khazeh decades and Decker 1992; Metawa Almossawi 1998). Various studies named sevand eral attributes that were found to play a crucial role in the process of bank selection to include: availability of credit, relatives advice and ommendations, friends advice and recdation, convenient location, variety of bank serrecommenvices, the quality of services, availa-bility ATM, adequate banking hours, Return on Inof vestment, friendliness of personnel, understa-

nding financial needs, special services for women, and bank In a study reputation. carried out by Dutta and (2007), it was found that the availability Kundu core of banking facility and ATM facility having mean value 4.88) were the (all which customers consider next in terms attributes their of importance after than security features. 3.7 Nature of Complains Made by Customers The investigator made an attempt to tinize complains of respondents to their scruThe analysis of data (Table 6) shows that the bank. percentage of respondents, who made complains to their bank, is small. A few respondents, that is, only 10 per cent in SBI made complain bank, while 20 per cent and 30 per cent responto dents made complain to PNB and Canara respectively. A little respondent in ICICI bank Centurion BOP made complain to their bank, and that is, 10 per cent and 20 per cent In Standard Chartered also, only 10 per cent respectively. respondents complained. The nature of complains in different banks were found to Cheque delay, Draft delay, Extra charges and be applicable Loan The delay. single matter in Standard Chartered was unsolved, while PNB, Canara bank bank Centurion BOP had taken lots of time to solve and customers complain. Rest of the matters, that is, 10 per cent each in SBI, PNB, ICICI Centurion BOP were solved, while 20 per cent and

ACOMPARATIVE STUDY OF BANKING SERVICES AND CUSTOMER SATISFACTION

55

matters were solved by Canara bank as it maximum number of complains, that is, 30 had cent. per The above analysis shows that complaining matters were so little in each of the bank. It mean does that customers had negligible Sometimes complains. respondents did not expect the matter to be solved, while sometimes they did not want to go for complaining. On the contrary, a study was conducted by Uppal (2010) on customer complaints in banks: nature, extent and strategies to mitigation. the In study, the numbers of complaints were mal in maxi- public sector banks and the complaints maximum were related to deposit, credit cards and housing loans. The present study was related to 2006 - 2007 and 2007 - 2008. 3.8 Suggestions of the Customers The analysis presented in Table 7 shows respondents of nationalized banks wanted to that improve employee behavior, ambience and frastructure. They also wanted longer working inhours. On the other hand, respondents of private and nationalized bank wanted ments in improve-other areas such as lower charges, more accessibility and good communication. 4. CONCLUSION

Table 7: Suggestions given by the customers improving the bank for services Bank Suggestion s s SBI Infrastructure should be Ambience should be improved Employee improved behavior should be Work should be completed improved PN Employees behavior should be easily Infrastructure should be B improved Proper guidance should be given to the improved ers customInterest rate should be Working increasedhours should be Different increased forms for transaction should be played disCanar Accessibility should be properly Ban Working a increasedhours should be More facilities should be provided by the k increased ICIC Charges should be bank Accessibility should be I reduced Communication with customers should be increased crease inS d tatements of transactions should be issued the to customers Centurion Proper guidance should be given to the timely BO mers custoInformation about new services should P given to the be SC Charges should be customers Accessibility should be reduced Communication with customers should be increased creased in-

mostly delay in transaction and extra charges. Hence, the study throws light on different aspects and drawback of services of the nationalVarious traditional and IT enabled ized, private and foreign banks. Training services used by customers are studied in banking stress present paper. In addition, customer satisfaction on management and public dealing the be imparted to the employees of was also measured with various dimensions. should banks. Nationalized banks need to improve is It observed that cheque deposit and cheque clear- nationalized infrastructure and ambience to compete ance were the most common banking their private and foreign banks in India. Branches used by the customers of all six banks. While with services private and foreign banks should be increased the charges levied by the bank on of for easy accessibility. services differentwere perceived higher by the ers in private and foreign banks in customto nationalized banks. A small number of REFERENCES comparison spondents were using IT enabled services other rethan ATM. Security, lack of facility, Aishah S 1997. The Key to Success. Chartered Analyst, June, P. Financial awareness improper and so on were found to be the reaAmmayya T 1996. Developing competitive 70. sons for not using IT enabled services. The custhrough advantage absorption of technology in knowledge, tomers of nationalized banks were not satisfied and attitudes of people. IBA Bulletin, 18(12): 38skills with the employee behavior and infrastructure, Bide 42. 1997. Information technology in banks. MG IBA Bulletin, 68(4): 149while respondents of private and foreign banks Chidambaram RM, Alamelu KMS 1996. Services 152. were not satisfied with high charges, Challenges and strategies. State Bank of India marketing: bility and accessi- communication. The study shows Review, 35(6): 303Monthly only that a few respondents made complain to their Chotani PY, Siva P, Narayanan L 2004. From 308. www.crmzday.com> (Retrieved November 3, respective banks. The nature of complain <http:// 2008). was