A PROJECT REPORT ON

Customer satisfaction
In the Indian Banking Sector
SUBMITTE !OR
The "artia# fu#fi##ment of
Post graduate "rogramme in management
B$
REETES% &UMAR SIN'%
'UIE B$
MS( MANITA MAT%ARU
K.R. Mangalam Institute of Management,
Kailash Colony,
Near Summerfield School,
Greater Kailash-I,
New Delhi-!!"

)
#CKN$%&'DG'M'N(
(his )ro*ect would not ha+e ,een )ossi,le without the guidance, hel) and
coo)eration of a num,er of )eo)le. I e-tend my gratitude to all those )eo)le who
hel)ed me in some or other way to com)lete my )ro*ect.
#lso I would li.e e-)ress my dee)est sense of gratitude to Ms Manita Matharu, my
faculty guide in )ro+iding a sense of direction and continuous su))ort in my re)ort
and his in)uts regarding the conduct and e-ecution of this re)ort.
I wish to e-)ress my heart felt gratitude to all friends who ha+e ,een associated with
this study in many small and ,ig ways.
Reetesh Kumar Singh
*
D'C&#R#(I$N
I+ REETES% &UMAR SIN'% student of P'PMS from & R MAN'A,AM
INSTITUTE O! MANA'EMENT+ 'REATER &AI,AS% - )+ NE.
E,%I+ here/0 dec#are that I ha1e com"#eted issertation on 2Customer
satisfaction in the Indian /an.ing Sector3 as "art of the course
re4uirement(
I further dec#are that the information "resented in this "ro5ect is true and
origina# to the /est of m0 kno6#edge(

0Reetesh Kumar Singh1
7
C$N('N(S

#c.nowledgment
Declaration
)( INTROUCTION222222222222222222222.
)() %istor0 of /anking sector
)(* Emerging trends in /anking sector
)(7 Customer satisfaction
)(8 Rura# /anking
)(9 !oreign /anks in India
)(: Nationa#i;ation of /anking sector
)(< U"coming foreign /anks in India
3. &I('R#(4R' R'5I'%222222222222222222.
6. N''D 7$R R'S'#RC8222222222222222222..
7() Need for measuring Customer satisfaction
7(* E="ectations and customer satisfaction
7(7 !actors Affecting customers to6ards "articu#ar Banks
9. R'S'#RC8 M'(8$D$&$G:22222222222222.
8() O/5ecti1es of research
8(* Research design
8(7 Sources of data
8(8 Research instrument(

;. <4/&IC S'C($R /#NKS #ND <RI5#(' S'C($R /#NKS22
9() Pu/#ic sector /anks
9(* Pri1ate sector /anks
9(7 ifference /et6een "u/#ic sector /anks and "ri1ate sector /anks
8
9(8 ifference /et6een "u/#ic sector /anks and "ri1ate sector /anks in terms of
Customer satisfaction(
9(9 Reasons of dissatisfaction in "u/#ic sector /anks(
9(: Recommendations for "u/#ic sector /anks(
=. S(R#('GI'S $7 /#NKS ($ S#(IS7: (8'IR C4S($M'RS22.
:() Re#ationshi" marketing >CRM? in /anking sector
:(* Ten 6a0s to he#" 0ou im"ro1e 0our customer ser1ice
:(7 Ser1ice 4ua#it0 de1e#o"ment
:(8 Im"ro1ing customer satisfaction
:(9 imensions of ser1ice 4ua#it0 in the Indian retai# Banking En1ironment
:(: Marketing strategies
:(< Measuring Customer satisfaction in the Indian Banking sector
>. IM<#C( $7 #(M $N C4S($M'R S#(IS7#C(I$N222222..
?. #N#&:SIS @ IN('R<R'(#(I$N 222222222222222

". C$NC&4SI$N @ S4MM#R: 22222222222222222
!. &IMI(#(I$NS222222222222222222222222.
References
Auestionnaire
9
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(a,le 9.90a1 Demogra)hics0Gender1
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(a,le 9.90,? Marital status
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(a,le 9.90c1 Monthly family income
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(a,le 9.90e1 'ducation
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(a,le 9.90f1 $ccu)ation
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(a,le ?0a1 Customer satisfaction le+el in S/I
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(a,le ?0,1 Customer satisfaction le+el in <N/
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(a,le ?0c1 Customer satisfaction le+el in ID/I
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(a,le ?0d1 Customer satisfaction le+el in ICICI
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(a,le ?0e1 Customer satisfaction le+el in 8D7C
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(a,le "0a1 Ran.ing score sheet of customer )erce)tion
=
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Gra)h 9.90a1 Gra)h 9.90a1 Demogra)hics0Gender1
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Gra)h 9.90c1 Gra)h 9.90c1 Monthly family income
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Gra)h 9.90d1 Gra)h 9.90d1 #ge
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Gra)h 9.90e1 Gra)h 9.90e1 'ducation
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Gra)h 9.90f1 Gra)h 9.90f1 $ccu)ation
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Gra)h ?0a1 Gra)h ?0a1 Customer satisfaction le+el in S/I
;; ;;
Gra)h ?0,1 Gra)h ?0,1 Customer satisfaction le+el in <N/
;; ;;
Gra)h ?0c1 Gra)h ?0c1 Customer satisfaction le+el in ID/I
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Gra)h ?0d1 Gra)h ?0d1 Customer satisfaction le+el in ICICI
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Gra)h "0a1 Gra)h "0a1 Ran.ing score sheet of customer )erce)tion
=3 =3
. IN(R$D4C(I$N
The Pur"ose of this stud0 to in1estigates re#ationshi" dimensions and studies the
differences in "erce"tion of customers 6ith res"ect to ser1ices "ro1ided /0 fi1e Indian
/anks( The re#ationshi" dimensions 6hich #ead to customer satisfaction ha1e /een
identified( This stud0 re"orts on the different satisfaction #e1e#s of customers of "ri1ate
and "u/#ic sector /anks 6ith res"ect to the ser1ices "ro1ided /0 their /anks
)() 8IS($R: $7 (8' /#NKING S'C($R
<
Banking in India originated in the #ast decades of the )@th centur0( The first /anks 6ere
The 'enera# Bank of India 6hich started in )<@:+ and the Bank of %industan+ /oth of
6hich are no6 defunct( The o#dest /ank in e=istence in India is the State Bank of India+
6hich originated in the Bank of Ca#cutta in June )@A:+ 6hich a#most immediate#0
/ecame the Bank of Benga#( This 6as one of the three "residenc0 /anks+ the other t6o
/eing the Bank of Bom/a0 and the Bank of Madras+ a## three of 6hich 6ere esta/#ished
under charters from the British East India Com"an0( !or man0 0ears the Presidenc0
/anks acted as 4uasi-centra# /anks+ as did their successors( The three /anks merged in
)B*) to form the Im"eria# Bank of India+ 6hich+ u"on IndiaCs inde"endence+ /ecame the
State Bank of India(
Indian merchants in Ca#cutta esta/#ished the Union Bank in )@7B+ /ut it fai#ed in )@8@ as
a conse4uence of the economic crisis of )@8@-8B( The A##aha/ad Bank+ esta/#ished in
)@:9 and sti## functioning toda0+ is the o#dest Joint Stock /ank in India( It 6as not the
first though( That honor /e#ongs to the Bank of U""er India+ 6hich 6as esta/#ished in
)@:7+ and 6hich sur1i1ed unti# )B)7+ 6hen it fai#ed+ 6ith some of its assets and #ia/i#ities
/eing transferred to the A##iance Bank of Sim#a(
!oreign /anks too started to arri1e+ "articu#ar#0 in Ca#cutta+ in the )@:As( The Com"toire
dCEscom"te de Paris o"ened a /ranch in Ca#cutta in )@:A+ and another in Bom/a0 in
)@:*D /ranches in Madras and Pondicher0+ then a !rench co#on0+ fo##o6ed( %SBC
esta/#ished itse#f in Benga# in )@:B( Ca#cutta 6as the most acti1e trading "ort in India+
main#0 due to the trade of the British Em"ire+ and so /ecame a /anking center(
The Bank of Benga#+ 6hich #ater /ecame the State Bank of India(
The first entire#0 Indian 5oint stock /ank 6as the Oudh Commercia# Bank+ esta/#ished in
)@@) in !ai;a/ad( It fai#ed in )B9@( The ne=t 6as the Pun5a/ Nationa# Bank+ esta/#ished
in ,ahore in )@B9+ 6hich has sur1i1ed to the "resent and is no6 one of the #argest /anks
in India(
The "eriod /et6een )BA: and )B))+ sa6 the esta/#ishment of /anks ins"ired /0 the
S6adeshi mo1ement( The S6adeshi mo1ement ins"ired #oca# /usinessmen and "o#itica#
@
figures to found /anks of and for the Indian communit0( A num/er of /anks esta/#ished
then ha1e sur1i1ed to the "resent such as Bank of India+ Cor"oration Bank+ Indian Bank+
Bank of Baroda+ Canara Bank and Centra# Bank of India(
The fa1our of S6adeshi mo1ement #ead to esta/#ishing of man0 "ri1ate /anks in
akshina &annada and Udu"i district 6hich 6ere unified ear#ier and kno6n /0 the name
South Canara > South &anara ? district( !our nationa#i;ed /anks started in this district
and a#so a #eading "ri1ate sector /ank( %ence undi1ided akshina &annada district is
kno6n as ECrad#e of Indian BankingE(
(he State /an. of India 0S/I1 is the o#dest and #argest /ank in the countr0( Its origins
go /ack to the first decade of the )Bth centur0+ 6hen the Bank of Ca#cutta 6as esta/#ished
on * June )@A:( The /ank got its "resent name after an Act of Par#iament in Ma0 )B99
and the State Bank of India 6as constituted on ) Ju#0 )B99( Toda0+ SBI has a "henomena#
B+99B /ranches and its ATM net6ork is s"read across :+8<7 of its o6n #ocationsF tota#
@+AAAATMs inc#uding of those of its associate /anks(
State Bank of India is a successor to Im"eria# G Bank of India+ 6hich 6as esta/#ished in
)B*)(The /ank+ came into /eing on )(<()B99 through G the State Bank of India Act+ )B99(
States of India 5oined the State Bank 'rou"+ as su/sidiaries under the State Bank of India
>Su/sidiaries Banks? Act+ )B9B(
.3 'M'RGING (R'NDS IN /#NKING S'C($R
The #i/era#i;ation "rocess initiated /0 the go1ernment a/out a decade ago has changed
the #andsca"e of se1era# sectors of the Indian econom0( The financia# sector #ike other
sectors is a#so going through ma5or changes as a conse4uence of economic reforms( The
consum"tion-#ed /oom in India has fue##ed ro/ust demand for financia# "roducts
es"ecia##0 in the /anking domain( Emerging com"etition has generated ne6 e="ectations
from e=isting and ne6 customers( There is an urgent need to introduce ne6 and more
B
attracti1e customer-friend#0 "roducts and ser1ices( The /anking sector "resent#0 is at an
inf#e=ion "oint( E=isting "roducts need to /e de#i1ered in an inno1ati1e and cost-effecti1e
manner /0 taking fu## ad1antage of emerging techno#ogies( Techno#og0 has s6ift#0
/ecome a /usiness dri1er rather than a /usiness ena/#er( This sector has seen "henomena#
gro6th in terms of techno#og0 infusion and ado"tion in the recent "ast such asH Internet
and Mo/i#e Banking+ CRM+ etc( .ith increasing com"etition and tightening of "rudentia#
norms /0 the Reser1e Bank+ the "#a0ers in the /anking industr0+ /oth Indian and g#o/a#
are taking turns to6ards mergers and ac4uisitions( On#0 /anks ha1ing ade4uate
infrastructure+ techno#og0+ economies of sca#e and 6e## connected net6ork of /ranches
6i## /e a/#e to sur1i1e and meet the cha##enges of e1er increasing com"etition and
customer e="ectations( The /ook is di1ided into t6o sections( Section-I e=tensi1e#0
co1ers the trends+ issues and cha##enges re#ated to the techno#og0 i(e( ATMs+ e-/anking+
data 6arehousing and data mining+ CRM so#utions+ etc( Section-II co1ers other
contem"orar0 issues in the /anking sector such as Base# II+ financia# inc#usion+ ser1ice
4ua#it0+ risk management+ /anc assurance+ retai# /anking+ uni1ersa# /anking etc( The /ook
sha## ser1e as a rich reference resource for decision makers in the /anking industr0+
researchers+ academicians and students(
The traditiona# distinctions /et6een /anking and other financia# ser1ices #ike insurance
on one sideD and /et6een commercia# /anking+ de1e#o"menta# /anking and in1estment
/anking are getting /#urred( The emergence of uni1ersa# /anking and /anc assurance are
c#ear#0 "ointers( This g#o/a# con1ergence of financia# ser1ices ma0 gather further
momentum in the 0ears to come( The /anking and insurance sector reforms ha1e
encouraged "ri1ate sector "#a0ers to make fora0s into the /usiness in co##a/oration 6ith
ma5or internationa# com"anies(
This ne6 scenario 6i## 6itness financia##0 sound and e="erienced "#a0ers transforming
the industr0 6ith /est "ractices in "roduct de1e#o"ment+ o"erationa# efficienc0+ marketing
ca"a/i#it0+ ser1ice focus+ and tech sa10 orientation( Thus there is a need for intensi1e+
futuristic and career oriented "rograms in these t6o areasH Banking and Insurance( These
)A
de1e#o"ments in Banking and Insurance industr0 ca## for com"etent and "rofessiona##0
trained managersE+
Increasing com"etition+ thinner s"reads and introduction of ne6 techno#og0 dri1en
"roducts are some of the trends that the Indian /anking s0stem is e="eriencing( ERecent
trends in Indian /anking ha1e ref#ected the efforts of the ma5or "#a0ers to ada"t to a
ra"id#0 #i/era#i;ing and g#o/a#i;ing en1ironment(
.hi#e the im"act of these changes is "ossi/#0 a su/5ect of de/ate+ there is one grou"
6hich is not com"#aining the customers+ the /eneficiaries of the "rocess of
#i/era#i;ation+E o/ser1ed Amita/h 'uha+ State Bank of Tra1ancore(
!urther+ the techno#og0 oriented /anking has /ecome one of the #atest mantras of success
in the market+ es"ecia##0 to 6in o1er the customers(
To this+ sa0s SBI Chairman A& Pur6ar+ EIndian /anks need to fue# the market /0
/ringing ne6 "roducts at "ar 6ith the internationa# standards+ e=tending ATM faci#it0 to
rura# areas and 1i/rant net6orking countr06ide to com"ete 6ith the ne6 generation and
the MNC /anks in IndiaE
As T(S( Anantharaman+ !inancia# Ana#0st+ mentioned+ EThe sa1ings and in1estments
scenario in our countr0 has undergone tota# change in the "ast decade+ since the countr0
em/arked on a course of #i/era#i;ation and g#o/a#i;ation of its econom0
.ith the increasing so"histication of our econom0+ the 1ariet0 and t0"e of in1estments
o"tions a1ai#a/#e to us toda0 ha1e mu#ti"#ied( A#so+ 6ith the econom0 getting more and
more integrated 6ith the 6or#d econom0+ ra"id changes in the o"tions+ instruments+ rate
of return etc( ha1e /ecome the order of the da0(E Such a change is 1isi/#e in res"ect of
shares+ mutua# funds+ fi=ed income+ /ank de"osits+ #ife insurance+ "ension "#ans etc( since
change and inno1ation is in1o#1ed in this "rocess+ and one can #egitimate#0 e="ect an
e=citing and #ucrati1e career scenario in the /anking+ finance and insurance sector(
))
.6 C4S($M'R S#(IS7#C(I$N
Customer satisfaction+ a /usiness term+ is a measure of ho6 "roducts and ser1ices
su""#ied /0 a com"an0 meet or sur"ass customer e="ectation( It is seen as a ke0
"erformance indicator 6ithin /usiness and is "art of the four "ers"ecti1es of a Ba#anced
Scorecard(
In a com"etiti1e market"#ace 6here /usinesses com"ete for customers+ customer
satisfaction is seen as a ke0 differentiator and increasing#0 has /ecome a ke0 e#ement of
/usiness strateg0(
Organi;ations need to retain e=isting customers 6hi#e targeting non-customersD
Measuring customer satisfaction "ro1ides an indication of ho6 successfu# the
organi;ation is at "ro1iding "roducts andIor ser1ices to the market"#ace(
Customer satisfaction is an a/stract conce"t and the actua# manifestation of the state of
satisfaction 6i## 1ar0 from "erson to "erson and "roductIser1ice to "roductIser1ice( The
state of satisfaction de"ends on a num/er of /oth "s0cho#ogica# and "h0sica# 1aria/#es
6hich corre#ate 6ith satisfaction /eha1iors such as return and recommend rate( The #e1e#
of satisfaction can a#so 1ar0 de"ending on other factors the customer+ such as other
"roducts against 6hich the customer can com"are the organi;ationCs "roducts(
Satisfaction 6ith /anking ser1ices is an area of gro6ing interest to researchers and
managers( The commercia# /anking industr0 #ike man0 other financia# ser1ice industries
is facing ra"id#0 changing market( Ne6 techno#ogies+ economic uncertainties+ fierce
com"etition and more demanding customers and the changing c#imate ha1e "resented an
un"recedented set of cha##enges( Intangi/#e assets+ "articu#ar#0 /rands and customers+ are
critica# to an0 organi;ation and in toda0Js com"etiti1e en1ironment re#ationshi"
marketing is critica# to /anking cor"orate success(
)*
Banking is a customer oriented ser1ices industr0( As 6e kno6 that customer is the king
therefore customer is the main focus and customer ser1ice is the differentiating factor(
Banks ha1e a#so started rea#i;ing that /usiness de"ends on c#ient ser1ice and the
satisfaction of the customer and this is com"e##ing them to im"ro1e customer ser1ice and
/ui#d re#ationshi" 6ith customers( .ith the current change in the functiona# orientation of
/anks+ the "ur"ose of /anking /eing redefined( The main dri1er of this change is
changing customer needs and e="ectations( Customers #ook for a re#ationshi" 6ith /ank
6hen the0 recei1e /enefits from its ser1ices(
The /anking industr0 #ike man0 other financia# ser1ice industries is facing a ra"id#0
changing market+ ne6 techno#ogies+ economic uncertainties+ fierce com"etition and more
demanding customers and the changing c#imate has "resented an un"recedented set of
cha##enges (
The /anking industr0 in India has undergone dramatic change "ost inde"endence( Banks
ha1e a#so starts rea#i;ing that /usiness de"ends on c#ient ser1ice and the satisfaction of
the customer and this is com"e##ing them to im"ro1e customer ser1ice and /ui#d
re#ationshi" 6ith customers(
.ith the current changes in the functiona# orientation of /anks+ the "ur"ose of /anking is
/eing redefined( The main dri1er of this change is changing customer needs and
e="ectations( Customers In ur/an India no #onger 6ant to 6ait in #ong 4ueues and s"end
hours in /anking transactions( This change in customer attitude has gone hand in hand
6ith the de1e#o"ments of ATMs+ "hone and net /anking a#ong 6ith a1ai#a/i#it0 of ser1ice
right at the customer doorste"( !urther the 6or#d c#ass /anking e="erience "ro1ided /0
"ri1ate and mu#tinationa# /anks 6ith their e1er e1o#1ing "roducts and ser1ices has raised
the /ar of customer e="ectations( .ith the emergence of uni1ersa# /anking+ /anks aim to
"ro1ide a## /anking "roducts and ser1ice offering under one roof and their Endea1our is
to /e customer centric( The Indian /anking industr0 is a#so em/racing techno#og0 ra"id#0(
Big "#a0ers among the "ri1ate and "u/#ic sector /anks are reengineering and automating
their core /anking "rocesses(
)7
.9 R4R#& /#NKING
Rura# /anking in India started since the esta/#ishment of /anking sector in India( Rura#
Banks in those da0s main#0 focused u"on the agro sector( The %ar0ana State Coo"erati1e
A"e= Bank ,td( common#0 ca##ed as %ARCOBAN& "#a0s a 1ita# ro#e in rura# /anking in
the econom0 of %ar0ana State and has /een "ro1iding aids and financing farmers+ rura#
artisans+ agricu#tura# #a/orers+ entre"reneurs+ etc( in the state and gi1ing ser1ice to its
de"ositors( Nationa# Bank for Agricu#ture and Rura# e1e#o"ment >NABAR? is a
de1e#o"ment /ank in the sector of Regiona# Rura# Banks in India( It "ro1ides and
regu#ates credit and gi1es ser1ice for the "romotion and de1e#o"ment of rura# sectors
main#0 agricu#ture+ sma## sca#e industries+ cottage and 1i##age industries+ handicrafts(
.; 7$R'IGN /#NKS IN INDI#
!oreign Banks in India a#6a0s /rought an e="#anation a/out the "rom"t ser1ices to
customers( After the set u" foreign /anks in India+ the /anking sector in India a#so
/ecome com"etiti1e and accusati1e( Ne6 "o#icies are introduced /0 RBI for themKThe
"o#ic0 con1e0s that foreign /anks in India ma0 not ac4uire Indian ones >e=ce"t for 6eak
/anks identified /0 the RBI+ on its terms? and their Indian su/sidiaries 6i## not /e a/#e to
o"en /ranches free#0+ Main com"etitors for /anking sector( Post offices+ Mutua# fund+
Share market+ Insurance+ Mone0 #enders+ !ami#0 and friends+ Present scenario /anking
industr0 has /een undergoing a ra"id transformation+ Banks toda0 are market dri1en and
market res"onsi1e( .ith the entr0 of ne6 "#a0ers and mu#ti"#e channe#s+ customers >/oth
cor"orate and retai#? ha1e /ecome more discerning and #ess E#o0a#E to /anks( This makes
it im"erati1e that /anks "ro1ide /est "ossi/#e "roducts and ser1ices to ensure customer
satisfaction( The0 ha1e /een managing a 6or#d of information a/out customers - their
"rofi#es+ #ocation+ needs+ re4uirements+ cash "ositions+ etc( !urthermore+ /anks ha1e 1er0
strong in-house research and market inte##igence units in order to face the future
cha##enges of com"etition+ es"ecia##0 customer retention(
)8
The0 are focusing on region-s"ecific cam"aigns rather than nationa# media cam"aigns as
effecti1e strateg0 for a di1erse countr0 #ike India( Customer-centricit0 a#so im"#ies
increasing in1estment in techno#og0( A"art from the Mo/i#e Banking+ inc#uding of SMS
Banking+ Net Banking and ATMs are the ma5or ste"s taken /0 the /anks in India to6ards
moderni;ation( Ser1ices gi1en /0 /anks -mat account+ ,ockers+ Cash management
Insurance "roduct+ Mutua# fund "roduct+ ,oans+ ECS >E#ectronic c#earance s0stem?
Ta=es(
.= N#(I$N#&IB#(I$N $7 /#NKING S'C($R-
The nationa#i;ation of /anks in India took "#ace in )B:B /0 Mrs( Indira 'andhi the then
"rime minister( It nationa#i;ed )8 /anks then( These /anks 6ere most#0 o6ned /0
/usinessmen and e1en managed /0 them( Centra# Bank of India+ Bank of Maharashtra+
ena Bank Pun5a/ Nationa# Bank S0ndicate Bank+ Canara Bank Indian Bank Indian
O1erseas Bank+ /ank of Baroda+ Union Bank+ A##aha/ad Bank United Bank of India
UCO Bank(
After that Banks ha1e introduced man0 more "roducts and faci#ities in the /anking sector
in its reforms measure( In )BB)+ under the chairmanshi" of M Narasimham+ a committee
6as set u" /0 his name 6hich 6orked for the #i/era#i;ation of /anking "ractices( The
countr0 is f#ooded 6ith foreign /anks and their ATM stations( Efforts are /eing "ut to
gi1e a satisfactor0 ser1ice to customers( Phone /anking and Net /anking is introduced(
The entire s0stem /ecame more con1enient and s6ift( Time is gi1en more im"ortance
than mone0(
.> 4<C$MING 7$R'IGN /#NKS IN INDI#
B0 *AAB fe6 more names is going to /e added in the #ist of foreign /anks in India( This
is as an aftermath of the sudden interest sho6n /0 Reser1e Bank of India "a1ing
roadma" for foreign /anks in India greater freedom in India( Among them is the 6or#dCs
)9
/est "ri1ate /ank /0 Euro Mone0 maga;ine+ S6it;er#andCs UBS( The fo##o6ing are the
#ist of foreign /anks going to set u" /usiness in IndiaH-
GRo0a# Bank of Scot#and
GS6it;er#andCs UBS
GUS-/ased 'E Ca"ita#
GCredit Suisse 'rou"
GIndustria# and Commercia# Bank of China

3. &I('R#(4R' R'5I'%-
Customer satisfaction is an im"ortant theoretica# as 6e## as "ractica# issue for most
marketers and consumer researchers >)A?( Customer satisfaction can /e considered the
essence of success in toda0Js high#0 com"etiti1e 6or#d of /usiness( Thus the significance
of customer satisfaction and customer retention in strateg0 de1e#o"ment for a market
):
oriented and customer focused firm can not /e o1erstated( Conse4uent#0+ customer
satisfaction is increasing#0 /ecoming a cor"orate goa# as more and more com"anies stri1e
for 4ua#it0 in their "roduct and ser1ices >))?( Customer satisfaction is the fee#ing or
attitude of a customer to6ards a "roduct or ser1ices after it has /een used and is genera##0
descri/ed as a fu## meeting of oneJs e="ectations >)*?( Customer satisfaction is a ma5or
outcome of marketing acti1it0 6here/0 it ser1es as a #ink /et6een the 1arious stages of
consumer /u0ing /eha1ior( !or instance+ if customers are satisfied 6ith "articu#ar ser1ice
offering after its use+ then the0 are #ike#0 to engage in re"eat "urchase and tr0 #ine
e=tensions >)7?(A stud0 conducted /0 ,e1es4ue and Mcouga## >)8? confirmed and
reinforced the idea that unsatisfactor0 customer ser1ice #eads to a dro" in customer
satisfaction and 6i##ingness to recommend the ser1ice to a friend( This 6ou#d in turn #ead
to an increase in the rate of s6itching /0 customers(
There can /e "otentia##0 man0 antecedents of customer satisfaction as the dimensions
under#0ing satisfaction 5udgment are g#o/a# rather than s"ecific >)9?( %o6e1er+ some
argue that customers de1e#o" norms for "roduct "erformance /ased on genera# "roduct
e="eriences+ and these+ rather than e="ectations from a /randJs "erformance+ determine
the confirmation Idisconfirmation "rocess >):?( More recent 6ork has argued that in
addition to the cogniti1e com"onents+ satisfaction 5udgments are a#so de"endent u"on
affecti1e com"onents as /oth coe=ist and make inde"endent contri/utions to the
satisfaction 5udgments >)<?(
Researchers ha1e esta/#ished some of the ke0 antecedents of customer satisfaction in
retai# /anking 6ith res"ect to customer satisfaction in the com"etiti1e 6or#d of /usiness
as 6e## as the ke0 antecedents to the formation of o1era## customer satisfaction >)@?( The
/ottom #ine is that organi;ations 6i## a#6a0s /e attenti1e to ma=imi;ing "rofits and their
success 6i## /e determined /0 ho6 the0 manage customer re#ationshi"s( Marketing has
taken some initia# ste"s to "#ace the customer at the center of its efforts+ such as
information sharing in customer ser1ice channe#s+ sa#es force automation and target
market segmentation( Customer "rofita/i#it0 management re4uires a mu#ti-#e1e#
marketing return on in1estment ana#0sis co1ering a series of marketing acti1ities that can
/e integrated and o"timi;ed for a customer or customer segment >)B?(
)<
Customer satisfaction+ a /usiness term+ is a measure of ho6 "roducts and ser1ices
su""#ied /0 a com"an0 meet or sur"ass customer e="ectation( It is seen as a ke0
"erformance indicator 6ithin /usiness and is "art of the four "ers"ecti1es of a Ba#anced
Scorecard(
In a com"etiti1e market"#ace 6here /usinesses com"ete for customers+ customer
satisfaction is seen as a ke0 differentiator and increasing#0 has /ecome a ke0 e#ement of
/usiness strateg0(
There is a su/stantia# /od0 of em"irica# #iterature that esta/#ishes the /enefits of customer
satisfaction for firms(
Organi;ations need to retain e=isting customers 6hi#e targeting non-customer( Measuring
customer satisfaction "ro1ides an indication of ho6 successfu# the organi;ation is at
"ro1iding "roducts andIor ser1ices to the market"#ace(
Customer satisfaction is an a/stract conce"t and the actua# manifestation of the state of
satisfaction 6i## 1ar0 from "erson to "erson and "roductIser1ice to "roductIser1ice( The
state of satisfaction de"ends on a num/er of /oth "s0cho#ogica# and "h0sica# 1aria/#es
6hich corre#ate 6ith satisfaction /eha1iors such as return and recommend rate( The #e1e#
of satisfaction can a#so 1ar0 de"ending on other factors the customer+ such as other
"roducts against 6hich the customer can com"are the organi;ationCs "roducts(
.ork done /0 Parasuraman+ Leitham# and Berr0 >,eonard ,? /et6een )B@9 and )B@@
de#i1ered SERMNUA, 6hich "ro1ides the /asis for the measurement of customer
satisfaction 6ith a ser1ice /0 using the ga" /et6een the customerCs e="ectation of
"erformance and their "ercei1ed e="erience of "erformance( This "ro1ides the researcher
6ith a satisfaction Ega"E 6hich is semi-4uantitati1e in nature( Cronin and Ta0#or
e=tended the disconfirmation theor0 /0 com/ining the Ega"E descri/ed /0 Parasuraman+
Leitham# and Berr0 as t6o different measures >"erce"tion and e="ectation? into a sing#e
measurement of "erformance re#ati1e to e="ectation(
)@
The usua# measures of customer satisfaction in1o#1e a sur1e0 6ith a set of statements
using a ,ikert Techni4ue or sca#e( The customer is asked to e1a#uate each statement in
terms of their "erce"tion and e="ectation of "erformance of the ser1ice /eing measured(
Because the conce"t of customer satisfaction is ne6 to man0 com"anies+ itCs im"ortant to
/e c#ear on e=act#0 6hatCs meant /0 the term(
Customer satisfaction is the state of mind that customers ha1e a/out a com"an0 6hen
their e="ectations ha1e /een met or e=ceeded o1er the #ifetime of the "roduct or ser1ice(
The achie1ement of customer satisfaction #eads to com"an0 #o0a#t0 and "roduct
re"urchase( There are some im"ortant im"#ications of this definitionH
Because customer satisfaction is a su/5ecti1e+ no 4uantitati1e state+ measurement 6onCt
/e e=act and 6i## re4uire sam"#ing and statistica# ana#0sis(
Customer satisfaction measurement must /e undertaken 6ith an understanding of the
ga" /et6een customer e="ectations and attri/ute "erformance "erce"tions(
There shou#d /e some connection /et6een customer satisfaction measurement and
/ottom-#ine resu#ts(
ESatisfactionE itse#f can refer to a num/er of different facts of the re#ationshi" 6ith a
customer( !or e=am"#e+ it can refer to an0 or a## of the fo##o6ingH
Satisfaction 6ith the 4ua#it0 of a "articu#ar "roduct or ser1ice
Satisfaction 6ith an ongoing /usiness re#ationshi"
Satisfaction 6ith the "rice-"erformance ratio of a "roduct or ser1ice
Satisfaction /ecause a "roductIser1ice met or e=ceeded the customerCs e="ectations
Each industr0 cou#d add to this #ist according to the nature of the /usiness and the
s"ecific re#ationshi" 6ith the customer( Customer satisfaction measurement 1aria/#es 6i##
differ de"ending on 6hat t0"e of satisfaction is /eing researched( !or e=am"#e+
)B
manufacturers t0"ica##0 desire on-time de#i1er0 and adherence to s"ecifications+ so
measures of satisfaction taken /0 su""#iers shou#d inc#ude these critica# 1aria/#es(
C#ear#0 defining and understanding customer satisfaction can he#" an0 com"an0 identif0
o""ortunities for "roduct and ser1ice inno1ation and ser1e as the /asis for "erformance
a""raisa# and re6ard s0stems( It can a#so ser1e as the /asis for a customer satisfaction
sur1e0ing "rogram that can ensure that 4ua#it0 im"ro1ement efforts are "ro"er#0 focused
on issues that are most im"ortant to the customer(
6. N''D 7$R R'S'#RC8
.hi#e re#ationshi"s ha1e /een e=tensi1e#0 studied in marketing channe#s +industria#
settings+ and some consumer setting in 6estern cu#tura# conte=ts such as Euro"e +US+ the
U& +and e1en Austra#ia +fe6 studies ha1e e=amined the "aradigm in an eastern cu#tura#
conte=t such as India( The maturing of ser1ices marketing+ the increased recognition of
*A
"otentia# /enefits for customer and techno#ogica# de1e#o"ments are the main factors
dri1ing the de1e#o"ments of re#ationshi" marketing77(the "resence of these factors in the
Indian /anking sector moti1ated this research( .ith /anks #osing @O of their c#ients e1er0
0ear 78(re#ationshi" marketing strateg0 to satisf0 customers and im"ro1e their
"rofita/i#it0 has mo1ed to the forefront(
!or centuries /anks ha1e "#a0ed an im"ortant ro#e in financia# s0stem of the countr0( The
1ita# ro#e continues e1en toda0 a#though the form of /anking has changed toda0 6ith
changing need of the econom0 and indi1idua#s(
The Banking s0stem in India has three tiers( There are schedu#ed commercia# /anksD the
regiona# rura# /anksD and the coo"erati1e /anks( The schedu#ed commercia# /anks
constitute those /anks 6hich are inc#uded in the second schedu#e of RBI Act )B78(In the
organi;ed segmentD /anking s0stem occu"ies an im"ortant "#ace in nationJs econom0( It
"#a0s a "i1ota# ro#e in the economic de1e#o"ment of a countr0 and forms the core of the
mone0 market in an ad1anced countr0( The commercia# /anks in India com"rise of /oth
Pu/#ic sector as 6e## as "ri1ate sector /anks( There are tota# *@ Pu/#ic sector and *<
"ri1ate sector /anks are functioning in the countr0 "resent#0( Banks ha1e to dea# 6ith
man0 customers e1er0da0 and render 1arious t0"es of ser1ices to its customer( ItJs a 6e##
kno6n fact that no /usiness can e=ist 6ithout customers(
3.1 The Need to Measure Customer Satisfaction:

Satisfied customers are centra# to o"tima# "erformance and financia# returns( In man0
"#aces in the 6or#d+ /usiness organi;ations ha1e /een e#e1ating the ro#e of the customer
to that of a ke0 stakeho#der o1er the "ast t6ent0 0ears( Customers are 1ie6ed as a grou"
6hose satisfaction 6ith the enter"rise must /e incor"orated in strategic "#anning efforts(
!or6ard-#ooking com"anies are finding 1a#ue in direct#0 measuring and tracking
customer satisfaction >CS? as an im"ortant strategic success indicator( E1idence is
mounting that "#acing a high "riorit0 on CS is critica# to im"ro1ed organi;ationa#
"erformance in a g#o/a# market"#ace( .ith /etter understanding of customersC
"erce"tions+ com"anies can determine the actions re4uired to meet the customersC needs(
*)
The0 can identif0 their o6n strengths and 6eaknesses+ 6here the0 stand in com"arison to
their com"etitors+ chart out "ath future "rogress and im"ro1ement( Customer satisfaction
measurement he#"s to "romote an increased focus on customer outcomes and stimu#ate
im"ro1ements in the 6ork "ractices and "rocesses used 6ithin the com"an0(
Customer satisfaction is 4uite a com"#e= issue and there is a #ot of de/ate and confusion
a/out 6hat e=act#0 is re4uired and ho6 to go a/out it( (his artic#e is an attem"t to re1ie6
the necessar0 re4uirements+ and discuss the ste"s that need to /e taken in order to
measure and track customer satisfaction(
6.3 '-)ectations and Customer SatisfactionC
E="ectations ha1e a centra# ro#e in inf#uencing satisfaction 6ith ser1ices+ and these in
turn are determined /0 a 1er0 6ide range of factors #o6er e="ectations 6i## resu#t in
higher satisfaction ratings for an0 gi1en #e1e# of ser1ice 4ua#it0( This 6ou#d seem
sensi/#eD for e=am"#e+ "oor "re1ious e="erience 6ith the ser1ice or other simi#ar ser1ices
is #ike#0 to resu#t in it /eing easier to "#easant#0 sur"rise customers( %o6e1er+ there are
c#ear#0 circumstances 6here negati1e "reconce"tions of a ser1ice "ro1ider 6i## #ead to
#o6er e="ectations+ /ut 6i## a#so make it harder to achie1e high satisfaction ratings - and
6here "ositi1e "reconce"tions and high e="ectations make "ositi1e ratings more #ike#0(
6.6 7actors affecting customers towards )articular ,an.
Relationship marketingD financial performanceD
electronic commerceD e-commerceD online bankingD electronic bankingDD
internet bankingD information technologyD privacyD
business researchD customer researchD business innovationD
9. R'S'#RC8 M'(8$D$&$G:
9. $/D'C(I5' $7 (8' R'S'#RC8
The main o/5ecti1e of this stud0 are-
**
To identif0 customer satisfaction 1aria/#es 6hich #ead to /ui#ding re#ationshi"
6ith customers in the Indian /anking sector
To stud0 the difference in "erce"tion of the customers of the /ank to6ards 1arious
ser1ices "ro1ided /0 /ank(
To ana#0;e the satisfaction #e1e# of customers 6ith res"ect to the 1arious ser1ice
"ro1ided /0 the /anks
To identif0 the strategies of /anks to satisf0 their customers(
9.3 R'S'#RC8 D'SIGNC '-)loratory design
This stud0 is e="#orator0 in nature( It "ro1ides a descri"tion of contem"orar0 satisfaction
"arameter in the Indian /anking sector( E="#orator0 research "ro1ides insights into and
com"rehension of an issue or situation( E="#orator0 research he#"s to determine the /est
research design+ data co##ection method and se#ection of su/5ects(
9.6 S$4RC'S $7 D#(#-
There are man0 sources of data co##ection+ such as secondar0 data co##ection and Primar0
data co##ection(
<rimary data- -
There are 1arious 6a0s to undertake the gathering of "rimar0 data+ inc#uding conducting
sur1e0s to create market data or using other research instruments such as 4uestionnaire(
Sam"#e si;e- )AA
Sam"#e techni4ues- Con1enience sam"#ing
Secondary data
This in1o#1es information that a#read0 e=ists some6here+ such as in studies a#read0
undertaken on this area as 6e## as "u/#ished /ooks+ artic#es in 5ourna#s+ artic#es on the
internet and other sources(
*7
Re#ationshi" marketing dimensions 6ere identified /0 conducting a customer satisfaction
sur1e0 of fi1e /anks in India( The research "rocess in1o#1ed the fo##o6ing ste"s(
!irst+ a #iterature re1ie6 6as undertaken to identif0 6hat "arameters to consider in
research( It out#ines the "re1ious research 6ith res"ect to customer satisfaction in the
/anking industr0(
Second+ in-de"th inter1ie6 6ere he#d 6ith customers to esta/#ish the e1a#uation criteria
and factors 6hich resu#ts in customer satisfaction(
Third+ a 4uestionnaire 6as constructed and "i#oted(
,ast+ the "o"u#ation and sam"#ing "rocedure 6ere esta/#ished and methods of data
co##ection and ana#0sis determined(
The "resent research is e="#orator0 in nature and aims to de1e#o" h0"othesis 6hich can
/e tested #ater( It "ro1ides descri"tion of contem"orar0 satisfaction "arameters in the
/anking industr0( It is not e="#anator0 as it does not test an0 casua# re#ationshi"s(
9.9 R'S'#RC8 INS(R4M'N(
The 4uestionnaire 6as designed from the #iterature re1ie6 as 6e## as from the resu#ts of
in-de"th inter1ie6s( It inc#uded si=teen 1aria/#es 6hich determined the satisfaction of the
customers of the fi1e /anks chosen for the stud0( T6o of these /anks 6ere nationa# /anks
name#0 +state Bank of India>SBI? and Pun5a/ Nationa# Bank>PNB? and three 6ere Pri1ate
sector Banks name#0+ %ousing e1e#o"ment !inance cor"oration>%!C?+Industria#
Credit and In1estment Cor"oration of India>ICICI?+and Industria# e1e#o"ment Bank of
India>IBI?( SBI and PNB 6ere chosen /ecause the0 ha1e the #argest net6ork of
/ranches in India( ICICI+ %!C and IBI 6ere the first "ri1ate /anks to introduce
2inte##igent3 /anking in India( These /anks ha1e a strong retai# "resence and offer a
com"rehensi1e range of information to the customer( The0 ha1e taken initiati1es to
satisf0 customers and "ro1ide 1a#ue added ser1ices(
ata from )AA customers 6ere co##ected( The fi1e /anks 6ere contacted indi1idua##0 to
o/tain the contact addresses of the customers and the 4uestionnaire 6as administered to
customers 6ho had /een 6ith the /ank for three 0ears( The 4uestionnaire is di1ided in to
fi1e sections( The second "art of 4uestionnaire dea#t 6ith res"ondent satisfaction 6ith
*8
res"ect to ser1ices and the third "art dea#t 6ith 1aria/#es 6hich in1o#1e transactions(
Customer satisfaction 6as recorded on a < "oint semantic differentia# sca#e ranging from
e=treme#0 goodIsatisfied to e=treme#0 /adIdissatisfied( The other "arts of the
4uestionnaire recorded information a/out customers e="erience 6ith their res"ecti1e
/anks+ their /anking ha/its and demogra"hic information(
Demogra)hic )rofile of the customers
(a,le 9.90a1 Demogra)hics
)( 'ender
Ma#e :B(BO
!ema#e 7A()O
'ra"h 8(8>a?
INTERPRETATION-There are :B(BO ma#e and 7A()O fema#e res"ondent in m0 stud0(
Ta/#e 8(8>/? - Marita# status
Married ;!.?E
Unmarried 9?.;E
Other !.>E
*9
'ra"h 8(8>/?
INTERPRETATION- There are 9A(@O married and 8@(9O unmarried res"ondent in m0
stud0(
Ta/#e 8(8>c?-Month#0 !ami#0 income
,ess than Rs)AAAA )B(:O
Rs)AAAA-*AAAA *@(:O
Rs*AAAA-7AAAA *<(AO
Rs7AAAA-8AAAA ):(*O
More than 8AAAA @(9O
*:
'ra"h 8(8>c?
INTERPRETATION- There are )B(:O +*@(:O+*<(AO+):(*O+@(9O res"ondent 6hose
month#0 fami#0 income is #ess than Rs)AAAA+Rs)AAAA-*AAAA+Rs*AAAA-7AAAA+Rs7AAAA-
8AAAA+more than 8AAAA res"ecti1e#0 in m0 stud0(
(
Ta/#e 8(8>d?-Age
Be#o6 *9 0ears 7*(@O
*9-79 0ears *<(AO
79-89 0ears *7(@O
89-99 0ears ))(BO
A/o1e 99 0ears 8(9O
*<
'ra"h 8(8>d?
INTERPRETATION- There is 7*(@O+ *<(AO+ *7(@O+))(BO+8(9O res"ondent 6hose age
are /e#o6 *9 0ears+*9-79 0ears+79-89 0ears+89-99 0ears and a/o1e 99 0ears res"ecti1e#0(
Ta/#e 8(8>e?-Education
Secondar0 )(7O
%igher secondar0 *(<O
Undergraduate 7(8O
'raduate 8A(BO
Post 'raduate 9)(<O
*@
'ra"h 8(8>e?
INTERPRETATION- There is )(7O+*(<O+7(8O+8A(BO and 9)(<O res"ondent 6hose
education are secondar0+ higher secondar0+ Undergraduate +'raduate+ Post graduate
res"ecti1e#0 in m0 stud0(
Ta/#e 8(8>f?-Occu"ation
%ome maker 8(BO
Ser1ice 89(:O
Se#f em"#o0ed *9(*O
Retired )(:O
Students **(<O
'ra"h 8(8>f?
*B
INTERPRETATION- There are 8(BO+ 89(:O+ *9(*O+ )(:O+ **(<O res"ondent 6hose
occu"ation is %ome maker+ ser1ice se#f em"#o0ed+ retired and student res"ecti1e#0 in m0
stud0(
;. <4/&IC S'C($R #ND <RI5#(' S'C($R /#NKS
;. <4/&IC S'C($R /#NKS
Among the Pu/#ic Sector Banks in India+ United Bank of India is one of the )8 ma5or
/anks 6hich 6ere nationa#i;ed on Ju#0 )B+ )B:B( Its "redecessor+ in the Pu/#ic Sector
Banks+ the United Bank of India ,td(+ 6as formed in )B9A 6ith the ama#gamation of four
/anks 1i;( Comi##a Banking Cor"oration ,td( >)B)8?+ Benga# Centra# Bank ,td( >)B)@?+
Comi##a Union Bank ,td( >)B**? and %oogh#0 Bank ,td( >)B7*?(This Pu/#ic Sector Bank
India has im"#emented )8 "oint action "#an for strengthening of credit de#i1er0 to 6omen
and has designated 9 /ranches as s"ecia#i;ed /ranches for 6omen entre"reneurs(
;.3 <RI5#(' S'C($R /#NKS-
7A
The first Pri1ate /ank in India to /e set u" in Pri1ate Sector Banks in India 6as IndusInd
Bank( It is one of the fastest gro6ing Banks in India( IBI ranks the tenth #argest
de1e#o"ment /ank in the 6or#d as Pri1ate Banks in India and has "romoted 6or#d c#ass
institutions in India( The first Pri1ate Bank in India to recei1e an in "rinci"#e a""ro1a#
from the Reser1e Bank of India 6as %ousing e1e#o"ment !inance Cor"oration ,imited+
to set u" a /ank in the "ri1ate sector /anks in India as "art of the RBICs #i/era#i;ation of
the Indian Banking Industr0( It 6as incor"orated in August )BB8 as %!C Bank ,imited
6ith registered office in Mum/ai and commenced o"erations as Schedu#ed Commercia#
Bank in Januar0 )BB9(Co o"erati1e /anks in India(
;.6 Difference ,etween )ri+ate sector and )u,lic sector ,an.s
A "ri1ate sector is an econom0 is made u" of a## /usinesses and firms o6ned /0 ordinar0
mem/ers of the genera# "u/#ic( It a#so consist of a## the "ri1ate househo#ds in 6hich
"eo"#e #i1e((+6hereas+ "u/#ic sector is an econom0 is o6ned and contro##ed /0 a
go1ernment ( It consist of go1ernment /usinesses and firms +and goods and ser1ices
"ro1ided /0 the go1ernment+ such as the nationa# hea#th ser1ice+ state
education+5o/s+roads+"u/#ic "arks and #a6 and order(
;.9 Com)arison of )ri+ate sector ,an.s with )u,lic sector ,an.s in
terms of customer satisfaction-
The o/5ecti1e of this stud0 is to com"are the "u/#ic sector /anks and "ri1ate sector /anks
in terms of customer satisfaction and to find out the 1arious reasons of customer
dissatisfaction in these /anks(
The sco"e of the stud0 is confined in com"aring the Pu/#ic sector and "ri1ate sector
/anks in terms of customer satisfaction( The stud0 6i## /e undertaken on the /asis of
sam"#e sur1e0(
7INDINGS
7)
Customer satisfaction #e1e# is higher in Pri1ate sector /anks as com"ared 6ith the Pu/#ic
Sector Banks(
;.; R'#S$NS $7 DISS#(IS7#C(I$N IN <4/&IC S'C($R /#NKS
Beha1ior and attitude of the staff in "u/#ic sector /anks is the first reason of Customer
dissatisfaction(
Time taken to "rocess the transaction is the second reason of customer
dissatisfaction(
Man0 of the ser1ices are not "ro1ided /0 the Pu/#ic sector /anks 6hen com"ared 6ith
the Pri1ate sector /anks e(g( ATM Banking is not "ro1ided /0 Union Bank of India(
Internet Banking and Mo/i#e /anking is a#so not "ro1ided /0 man0 of the Pu/#ic sector
/anks(
;.= R'C$MM'ND#(I$NS
The staff shou#d /e ade4uate#0 trained to dea# 6ith the customer on one to one
/asis(
Man0 "u/#ic sector /anks need to re1i1e their infrastructure to ha1e "ace 6ith the
com"eting en1ironment(
Man0 of the ser1ices needs im"ro1ement in "u/#ic sector /anks e(g( ATM
faci#ities(
Staff shou#d /e ade4uate#0 trained to encourage face to face dea#ing(
Staff shou#d /e friend#0 and a""roacha/#e(
C#ear#0 defined customer "o#ic0 shou#d /e ado"ted /0 the /anks(
CustomerJs needs shou#d /e antici"ated in ad1ance so that the0 can /e he#"ed out
in a /etter 6a0(
%onor 0our "romises(
7*
=. Strategies of ,an.s to satisfy their customers-
A main strateg0 of /anks to satisf0 their customer is CRM(
:() CRM in /anking sector-CRMH A Com"etiti1e Too# for Indian Banking Sector-
In toda0Js com"etiti1e en1ironment re#ationshi" marketing is critica# to /anking cor"orate
success( Banking is a customer oriented ser1ices industr0 and Indian /anks ha1e started
rea#i;ing that /usiness de"ends on c#ient ser1ice and the satisfaction of the customer( This
is com"e##ing them to im"ro1e customer ser1ice and /ui#d re#ationshi"s 6ith customers(
This stud0+ conducted among fi1e Indian /anks+ aimed at identif0ing customer
satisfaction 1aria/#es 6hich #ead to re#ationshi" /ui#ding+ and de1e#o"ing a conce"tua#
77
frame6ork of re#ationshi" marketing "ractices in Indian /anks /0 ca"turing the
"ers"ecti1es of customers 6ith res"ect to their satisfaction 6ith 1arious ser1ices( It a#so
sought to identif0 6hether demogra"hics ha1e a ro#e to "#a0 in customer satisfaction( A
4uestionnaire designed from a #iterature re1ie6 and in-de"th inter1ie6s 6ere uti#i;ed to
arri1e at the ): 1aria/#es 6hich determined the satisfaction of 999 customers of the fi1e
/anks((
The three re#ationshi" dimensions+ name#0+ traditiona# ser1ices+ mu#ti channe# /anking
and interna# marketing+ 6hich #ead to customer satisfaction+ 6ere identified through
factor ana#0sis( A re"eated measure of ANOMA 6as run on the re#ationshi" dimensions to
assess significant difference in the #e1e# of satisfaction of the customer( A "erce"tua# ma"
6as created using the factor scores of each of the fi1e /anks 6hich he#"ed identif0 ho6
each /ank 6as "ositioned in the customersJ minds(
Re"orting on the different satisfaction #e1e#s of the customers+ the findings suggest that
6hi#e "ri1ate /anks ha1e /een a/#e to attract the 0ounger customers 6ith higher
educationa# #e1e#s+ 6ho are comforta/#e 6ith mu#ti channe# /anking+ the customers of the
nationa# /ank are o#der and more satisfied 6ith the traditiona# faci#ities( The resu#ts from
this stud0 cou#d "ro1ide manageria# #essons on assessment of strengths and im"ro1ement
of ser1ices and in e1o#1ing a research strateg0 that 6i## /enefit the management of /anks
Customer Re#ationshi" Management has emerged as a "o"u#ar /usiness strateg0 in
toda0Js com"etiti1e en1ironment( It is a disci"#ine 6hich ena/#es the com"anies to
identif0 and target their most "rofita/#e customers( CRM in1o#1es ne6 and ad1ance
marketing strategies 6hich not on#0 retain the e=isting customers /ut a#so ac4uire ne6
customers( It has /een in1ented as a uni4ue techni4ue ca"a/#e of remarka/#e changes in
tota# out"ut of com"anies( .hi#e the conce"t of re#ationshi" marketing 6as forma##0
introduced in ear#0 BAs 6hen financia# ser1ices+ air#ines and other ser1ice institutions
stated to Pre6ard to retainJ the e=isting customers /0 introducing #o0a#t0 "rograms+ CRM
is on#0 a "roduct of the #ate nineties( The "ur"ose of this "a"er is to find the differences in
an organi;ationJs ser1ices em"#o0ing CRM Mis a Mis others+ as "ercei1ed /0 the
customer( It a#so tries to find out the re#ationshi" /et6een "erce"tion and satisfaction+
78
commitment and #o0a#t0 6hich under#ines the significance of CRM in Indian /anking
sector(
CRM has de1e#o"ed into a ma5or cor"orate strateg0 for man0 organi;ations( It is
concerned 6ith the creation+ de1e#o"ment and enhancement of indi1idua#i;ed customer
re#ationshi"s 6ith carefu##0 targeted customers and customer grou"s resu#ting in
ma=imi;ing their tota# customer #ife time 1a#ue(
It is said that CRM is not a "roduct or ser1iceD it is an o1era## /usiness strateg0 that
ena/#es com"anies to effecti1e#0 manage re#ationshi"s 6ith their customers( It "ro1ides
an integrated 1ie6 of a com"an0Js customers to e1er0one in the organi;ation( .ith the
intensified com"etition+ com"anies rea#i;ed that the0 ha1e to treat their customers 6ith
res"ect( Customers ha1e a #ot more choices and the0 do not ha1e to /e #o0a# to an0
com"an0( Com"anies are no6 tr0ing to figure out 6a0s to manage customer re#ationshi"s
effecti1e#0+ not on#0 to ac4uire ne6 customers /ut a#so to retain their e=isting
customers(Shani and Cha#asani >)BB*? define re#ationshi" marketing as an integrated
effort to identif0+ maintain and /ui#d u" a net6ork 6ith indi1idua# customers and to
continuous#0 strengthen the net6ork for the mutua# /enefit of /oth sides through
interacti1e+ indi1idua#i;ed and 1a#ue added contacts o1er a #ong "eriod( Narro6
functiona##0 /ased traditiona# marketing is /eing re"#aced /0 CRM( A narro6 "ers"ecti1e
of CRM is data/ase marketing em"hasi;ing the "romotiona# as"ects of marketing #inked
to data/ase efforts >Bickert )BB*?(Berr0 >)BB9? stresses that attracting ne6 customers
shou#d /e 1ie6ed on#0 as an intermediate ste" in the marketing "rocess(
e1e#o"ing c#ose re#ationshi"s 6ith these customers and turning them into #o0a# ones are
e4ua# as"ects of marketing( Thus he "ro"osed re#ationshi" marketing as attracting+
maintaining and in mu#ti ser1ice organi;ations- enhancing customer re#ationshi"s( Berr0Js
notion of customer re#ationshi" management resem/#es that of 'ronroos >)BBA?+
'ummesson and ,e1itt >)B@)?( Another im"ortant facet of CRM is customer se#ecti1it0(
As se1era# research studies ha1e sho6n not a## customers are e4ua##0 "rofita/#e for an
indi1idua# com"an0 >Stor/acka*AAA?(
.hi#e am"#e #iterature is a1ai#a/#e on CRM toda0+ hard#0 an0 information is forthcoming
on the gains from CRM+ 6hether for the organi;ation or the customer+ in concrete terms(
79
No stud0 has 0et re"orted in "recise form and figure+ as to 6hat and ho6 much an
organi;ation+ em"#o0ing the CRM "hi#oso"h0 has /enefited out of it+ 6hi#e the c#aims are
man0( Sti## more scarce is #iterature on 6hat is in it for the customer( Is the customer
gaining an0thing out of the e=ercise >CRM?Q oes he fee# that the ser1ices handed out to
him /0 a /usiness cor"oration using CRM as a strateg0 is an0 /etter than others in the
industr0Q In order to seek an ans6er to this 4uestion a sur1e0 on customer "erce"tions of
ser1ice 4ua#it0 6as carried out( The "a"er re"orts findings of the said sur1e0(
=.3 (en %ays to 8el) :ou Im)ro+e :our Customer Ser+ice-
B0H Catherine !ran;
)( Sta0 in contact 6ith customers on a regu#ar /asis( Just as it is /ad ne6s to send
out too man0 emai#s to customers+ it is 5ust as /ad to not sta0 in contact 6ith
them( Customers donCt 6ant to fee# a/andoned( So donCt( %ere are three things to
he#" 0ou sta0 in touchH Offer them 0our e;ine su/scri"tion( Ask customers if the0
6ant to /e u"dated /0 e-mai#( !o##o6-u" after each sa#e to see if the0 are satisfied
6ith their "urchase( Send an e-mai# out a fe6 da0s after their "urchase+ another in
a 6eek or t6o+ and then another in a month(
*( Create a customer focus grou" /0 in1iting )A to *A #o0a# customers to meet
regu#ar#0( A#ternati1e#0+ send out a month#0 sur1e0 to this grou" asking for ideas
and in"ut on ho6 to im"ro1e 0our customer ser1ice( 'i1e them a re6ard( Pa0
themD gi1e them a gift certificate+ or send them free "roduct(
7( %a1e a 6e/ site that is eas0 to na1igate( Add a fre4uent#0 asked 4uestionCs E!ANE
"age and e="#ain an0thing that might confuse 0our customers or 1isitors( !o##o6-
u" 6ith an e#ectronic sur1e0 6ith 4uestions on ho6 to increase 0our siteCs user-
friend#iness(
8( Reso#1e customer com"#aints 4uick#0 and com"#ete#0( Ans6er a## e-mai# and
"hone ca##s 6ithin a fe6 hours( This 6i## sho6 0our customers 0ou rea##0 care
a/out them(
7:
9( onCt make 0our customers or 1isitors hunt for 0our contact information( Make it
eas0 for them to contact 0ou( Offer as man0 contact methods as "ossi/#e(
%0"er#ink a## 0our e-mai# addresses so the0 donCt ha1e to find or t0"e it( Offer a
to## free num/er(
:( If 0ou ha1e strategic a##iances or em"#o0ees+ make sure the0 are fami#iar 6ith
0our customer ser1ice "o#ic0( 'i1e 0our em"#o0ees /onuses or incenti1es to
"ractice e=ce##ent customer ser1ice( Te## em"#o0ees to /e f#e=i/#e 6ith each
indi1idua# customer+ each one has different concerns+ needs and 6ants(
<( 'i1e 0our customers more than the0 e="ect( Send thank 0ou gifts to #ong time
customers( E-mai# them greeting cards on ho#ida0s or /irthda0s if 0ou ha1e their
address or on#ine cards if 0ou on#0 ha1e their e-mai# address and name( 'i1e
/onuses to 0our customers 6ho make a /ig "urchase or mu#ti"#e "urchases(
@( U-6e#come+ "#eases+ and thanks 0ou and can ne1er /e o1er used( Be "o#ite no
matter 6hat( Admit and a"o#ogi;e for mistakes 4uick#0 and make it u" to them in
BI' 6a0s if 0ou 6ant them to continue /eing a customer(
@( Re6ard in "oints -- gi1e customers a "oint for e1er0 do##ar the0 s"end( Set u" a
"oints-earned sheet( E-mai# the customer an u"date month#0( If the0 send 0ou a
referra# the0 get )A "oints+ if the0 /u0 something add )A more "oints(
B( )A( If 0our /usiness is #oca#+ in1ite customers to 0our office for #unches+ "arties+
/ar/ecues+ dances+ seminars or other s"ecia# e1ents(
It isnCt 6hat 0ou "ercei1e as 1a#ua/#e /ut 6hat customers see from their e0es( $et+
sometimes+ 0ou 5ust canCt "#ease some fo#ks( If that occurs+ do 0ou /est and then #et it go(
$ou donCt 6ant them for c#ients an06a0( A/out the AuthorH Catherine !ran;+ a Certified
Professiona# Marketing F .riting Coach+ s"ecia#i;es in "roduct de1e#o"ment+ Internet
6riting and marketing+ nonfiction+ and training(
=.6 Ser+ice Auality De+elo)ment -
7<
Before )B@7+ the definition of 4ua#it0 6as defined "rimari#0 /ased on the conce"t of
4ua#it0 contro# 6ith corres"onding standards focused com"#ete#0 on achie1ing 4ua#it0(
Juran >)B<8? defined 4ua#it0 as Esuita/#e useE( Moreo1er+ Cros/0 >)B<B? defined 4ua#it0
as Econsistent 6ith needsE+ and assumed the e=istence of corres"ondence /et6een 4ua#it0
and o"erationa# standards( Corne## >)B@8? considered that the ser1ice industr0 re4uired a
/roader definition of 4ua#it0 than that used /0 the manufacturing industr0D Limmerman
>)B@9? took the 4ua#it0 contro# conce"t of the manufacturing industr0 and a""#ied it to
ser1ice 4ua#it0( Limmerman considered the com"onents of ser1ice 4ua#it0+ inc#udingH
"ractica#it0+ re"#ication of manufacturing a/i#it0+ immediac0+ u#timate user satisfaction+
and corres"onding standards( Based on the conce"t of PLB >)B@9? and Leitham# >)B@@?+
consumers see the "rocess of ser1ice 4ua#it0 formation as em"#o0ing /oth interior and
e=terior attri/utes of #o6-#e1e# "roduction 4ua#it0 or ser1ice 4ua#it0+ "assing through an
interna# united com"arison+ and "roceeding to esta/#ish a higher #e1e# of "ercei1ed
ser1ice 4ua#it0(
7@
Banks in India ha1e succeeded in "romoting ne6 ser1ices to its customers( The
#ike#ihood of current customers is tem"ted to do /usiness on#ine( Based on e=tant
#iterature on /ank marketing+ a 4uestionnaire 6as designed( Then+ in a #arge-sca#e
sur1e0 /0 means of "ersona# and te#e"hone inter1ie6s+ data 6as o/tained from /ank
customers( This "a"er focuses on the ado"tion of internet /anking /0 e=isting /anks
customers through an in1estigation of the factors that inf#uence customerCs
acce"tance of internet /anking ser1ice( The 4uestionnaire 6as designed from the
#iterature re1ie6( It inc#uded *B 1aria/#es 6hich 6i## he#" in enhancing the
satisfaction of the customer 6ith usage of internet /anking in India( Si= Indian /anks
6ere chosen 6here the 4uestionnaire 6as random#0 administered to *)A res"ondents
6ho 6ere a#so customers of the /ank( Out of *)A 4uestionnaires+ )B: 6ere
com"#eted 4uestionnaires( The /anks chosen for the "ur"ose of the stud0 6ere the
ones 6ho ha1e strong retai# "resence and offer com"rehensi1e range of information
to the customer( An e="#orator0 stud0 of the Indian customers in si= /anks is
conducted to identif0 the factors 6hich #ead to ado"tion of internet /anking ser1ices
6ith the he#" of data reduction techni4ue ca##ed factor ana#0sis(
The /anking industr0 in India has undergone sea change since "ost inde"endence( More
recent#0+ #i/era#i;ation+ the o"ening u" of the econom0 in the BAs and the go1ernmentCs
decision to "ri1ati;e /anks /0 reduction in state o6nershi" cu#minated in the /anking
reforms /ased on the recommendations of Narasimha Committee >7?( The "rime mo1er
for /anks toda0 is "rofit+ 6ith c#ear indications from the go1ernment to C"erform or
"erishC( Banks ha1e a#so started rea#i;ing that /usiness de"ends on c#ient ser1ice and the
satisfaction of the customer >8? and this is com"e##ing them to im"ro1e customer ser1ice
and /ui#d u" re#ationshi" 6ith customers(
.ith the current change in the functiona# orientation of /anks+ the "ur"ose of /anking is
redefined( The main dri1er of this change is changing customer needs and e="ectations(
Customers in ur/an India no #onger 6ant to 6ait in #ong 4ueues and s"end hours in
/anking transactions( This change in customer attitude has gone hand in hand 6ith the
de1e#o"ment of ATMs+ "hone and net /anking a#ong 6ith a1ai#a/i#it0 of ser1ice right at
the customerCs doorste"( .ith the emergence of uni1ersa# /anking+ /anks aim to "ro1ide
7B
a## /anking "roduct and ser1ice offering under one roof and their endea1or is to /e
customer centric >9?( .ith the emergence of economic reforms in 6or#d in genera# and in
India in "articu#ar+ "ri1ate /anks ha1e come u" in a /ig 6a0 6ith "rime em"hasis on
technica# and customer focused issues(
In this "a"er+ the main contention of the author is to high#ight the customer satisfaction
through ser1ice 4ua#it0 "ro1ided /0 the /anks-SBI from the "u/#ic sector /anking and
ICICI from the "ri1ate sector /anking( Another contention is to demonstrate the
"erformance of the t6o /anks SBI F ICICI in terms of customer satisfaction(
The "a"er is organi;ed in to si= sectionsH Section- )H starts 6ith a /rief "rofi#e of the
/anking industr0+ es"ecia##0 the SBI and ICICI( Section- *H co1ers Research
Methodo#og0 com"rising o/5ecti1es+ %0"othesis+ research design and sco"e of the stud0
inc#uding nature of data co##ection( Section-7H #a0s out the measurement of customer
satisfaction 6ith ser1ice 4ua#it0 and re1ie6 of #iterature( Section-8H "uts for6ard the core
strategies to address ser1ice 4ua#it0 ga"s( Section-9H dea#s 6ith Ana#0sis and
Inter"retation in #ine 6ith the o/5ecti1e of the stud0( Section-:H /rief#0 summari;es the
conc#usion and "o#ic0 im"#ementation of the stud0(
Profi#e of the Banking Industr0-SBI and ICICI
State Bank of India
State Bank of India >SBI? is the #argest /ank in India( It is measured /0 the num/er of
/ranch offices and em"#o0ees as the #argest /ank in the 6or#d( Esta/#ished in )@A: as
Bank of Benga#+ it remains the o#dest commercia# /ank in the Indian Su/continent and
a#so the most successfu# one "ro1iding 1arious domestic+ internationa# and NRI "roducts
and ser1ices+ through its net6ork of )7+BA@ /ranches+ inc#uding 8+<7) associate /anksC
/ranches in India and o1erseas( It a#so "ro1ides financia# ser1ices+ such as #ife insurance+
merchant /anking+ mutua# funds+ credit card+ factoring+ securit0 trading and "rimar0
dea#ershi" in the mone0 market( .ith an asset /ase of R)*: /i##ion and its reach+ it is a
regiona# /anking /ehemoth( The /ank 6as nationa#i;ed in )B99 6ith the Reser1e Bank of
8A
India ha1ing a :A "ercent stake( It has #aid em"hasis on reducing the huge man"o6er
through 'o#den handshake schemes and com"uteri;ing its o"erations(
It a#so has non-/anking su/sidiaries and 5oint 1entures+ such as SBI Ca"ita# Markets ,td(+
SBI !%I ,td(+ SBI !unds Management P1t ,td(+ SBI !actors F Commercia# Ser1ices
P1t ,td( and SBI ,ife Insurance Com"an0 ,td( Effecti1e from A"ri# *A+ *AA9D it ac4uired
a 9) "ercent stake in Indian Ocean Internationa# Bank ,td(
This stud0 e=amines 6hether there are economic /enefits to /e gained from im"ro1ing
ser1ice 4ua#it0 in the Tai6anese /anking industr0( Ser1ice 4ua#it0 is "ercei1ed 4ua#it0D
and different from o/5ecti1e or actua# 4ua#it0D /eing a 5udgment usua##0 made 6ithin a
customer e1oked set( Ser1ice 4ua#it0 resem/#es an attitude in man0 6a0s+ and ser1ice
4ua#it0 is distinct from customer satisfaction( Traditiona# financia# ratios are not
a""ro"riate for measuring the economic /enefits of ser1ice 4ua#it0 im"ro1ement( The
main sing#e factor inf#uence on /usiness unit "erformance is goods and ser1ice 4ua#it0(
The author de1e#o"s a frame6ork for this "a"er /ased on ser1ice 4ua#it0 and "rofita/i#it0
theoretica# /ackground( Re#ationshi"s are a#so esta/#ished among ser1ice 4ua#it0+
customer satisfaction+ and "rofita/i#it0( The main conc#usion of this stud0 is that the
"erformance sca#e de1e#o"ed in the SERMPER! mode# and customer satisfaction in the
"rofita/i#it0 mode# are confirmed in the Tai6anese /anking industr0( The author finds
that "erce"tion 4ua#it0 is an antecedent of attitude+ ser1ice 4ua#it0 is an antecedent of
customer satisfaction+ customer satisfaction direct#0 affects "urchase intention+ and
customer satisfaction is an antecedent of "rofita/i#it0( !ina##0+ the author finds ga"
/et6een customers and ser1ice "ro1iders and thus demonstrates that Profita/i#it0 is
"ositi1e#0 affected /0 ser1ice 4ua#it0 im"ro1ement(
Pre1ious#0+ ser1ice 4ua#it0 6as not /een e="#icit#0 #inked to "rofit( Leitham# >*AAA? has
found e1idence a/out the inf#uences of ser1ice 4ua#it0 on "rofits( Rust+ Lahorik+ and
&einingham >)BB9? "ro1ided a mode# of ser1ice 4ua#it0 im"ro1ement and "rofita/i#it0
and the su/mode#s+ 6hich together constitute the RON a""roach( The ser1ice "rofit chain
of %eskett et a#( >)BB<? sti"u#ates that Edirect and strongE re#ationshi"s e=ist among
ser1ice 4ua#it0+ customer satisfaction and "rofita/i#it0( As documented a/o1e+ this stud0
8)
6i## de1e#o" a frame6ork that com/ines ser1ice 4ua#it0+ customer satisfaction+ and
"rofita/i#it0 into a chain of effects
=.9 IM<R$5ING C4S($M'R S#(IS7#C(I$N-
Pu/#ished standards e=ist to he#" organi;ations de1e#o" their current #e1e#s of customer
satisfaction( The Internationa# Customer Ser1ice Institute >TICSI? has re#eased The
Internationa# Customer Ser1ice Standard >TICSS?( TICSS ena/#es organi;ations to focus
their attention on de#i1ering e=ce##ence in the management of customer ser1ice+ 6hi#st at
the same time "ro1iding recognition of success through a 7rd Part0 registration scheme(
TICSS focuses an organi;ationJs attention on de#i1ering increased customer satisfaction
/0 he#"ing the organi;ation through a Ser1ice Nua#it0 Mode#(
TICSS Ser1ice Nua#it0 Mode# uses the 9 PCs - Po#ic0+ Processes+ Peo"#e+ Premises+
ProductISer1ices+ as 6e## as "erformance measurement( The im"#ementation of a
customer ser1ice standard shou#d #ead to higher #e1e#s of customer satisfaction+ 6hich in
turn inf#uences customer retention and customer #o0a#t0.
=.; (8' DIM'NSI$NS $7 S'R5IC' A4#&I(:C # S(4D: $7 (8'
INDI#N R'(#I& /#NKING 'N5IR$NM'N(-
Regu#ator0+ structura# and techno#ogica# factors are significant#0 changing the /anking
en1ironment throughout the 6or#d( One factor that is s"urring the gro6th of the ser1ice
econom0 in India is the #i/era#i;ation that has /een ushered in /0 the go1ernment in the
/anking sector(
The financia# sector reform in India 6as designed to infuse 2greater com"etiti1e 1ita#it0
in the s0stem3( To achie1e this o/5ecti1e+ the 2Narasimhan Committee3 6as formed( The
Narasimhan Committee re"ort suggested 6ide ranging reforms for the Indian /anking
sector in )BB* to introduce internationa##0 acce"ted /anking "ractices and ena/#e Indian
/anks >6hich 6ere hitherto resisting #i/era#i;ation and o"ening of their markets? to
achie1e ser1ice e=ce##ence( The 2Narasimhan Committee3+ recommended the
#i/era#i;ation of entr0 norms and suggested that ne6 /anks /e "ermitted in the "ri1ate
8*
sector "ro1ided the0 conformed to the minimum start u" ca"ita# and other re4uirements(
The committee recommended too+ a #i/era# "o#ic0 to6ards a##o6ing foreign /anks to
o"en offices in India( Since the reforms started+ the interest rate structure has /een
deregu#ated to a great e=tent and /anks ha1e /een gi1en a great degree of freedom in
determining their rate structure for de"osits and ad1ances+ as 6e## as their "roduct range(
Banking has a#so /ecome more com"etiti1e in res"ect of the #ocation of "oints of sa#e+
that is+ the /ranch net6ork( The end resu#t is that market "o6er is getting shifted from
/anks to their customers( .ith the #o6ering of entr0 /arriers and /#urring "roduct #ines of
/anks and non-/anks+ the o#igo"o#istic nature of Indian /anking is fast changing and
gi1ing 6a0 to a re#ati1e#0 freer market "#ace( The freedom of choice 6hich /ank
customers did not ha1e ear#ier /ecause of standardi;ed "roducts and regimented interest
rates has /een gi1en to the customers as a resu#t of the changes taking "#ace
>Su/ramanian FMe#a0udham+ )BB<?(
In other 6ords+ financia# #i/era#i;ation has #ed to intense com"etiti1e "ressures and retai#
/anks are conse4uent#0 directing their strategies to6ards increasing customer satisfaction
and #o0a#t0 through im"ro1ed ser1ice 4ua#it0( Retai# /anks are "ursuing this strateg0+ in
"art+ /ecause of the difficu#t0 in differentiating /ased on the ser1ice offering( T0"ica##0+
customers "ercei1e 1er0 #itt#e difference in the /anking "roducts offered /0 retai# /anks
as an0 ne6 offering is 4uick#0 matched /0 com"etitors(
%o6e1er+ much of the research on ser1ice 4ua#it0 has /een in the de1e#o"ed countries
>%er/ig F 'enestre+ )BB:?+ e1en though ser1ices are among the fastest gro6ing sectors
in emerging countries >Ma#hotra et al(+ )BB7?( In fact+ the /u#k of the research on ser1ice
4ua#it0 in /anks has /een in the conte=t of US and Euro"ean /anking institutions( At this
5uncture+ it is im"ortant to a#so stud0 /anking institutions /ased in de1e#o"ing economies
#ike India+ 6hich has recent#0 #i/era#i;ed its /anking sector( As /anks in such countries as
India mature+ #essons ma0 /e #earned from their e="eriences /0 /anks in de1e#o"ed
economies as 6e## as in other de1e#o"ing countries+ as /anking /ecomes more and more
g#o/a##0 integrated( In fact+ there e=ists a significant ga" in the ser1ice marketing
#iterature on ho6 consumers e1a#uate ser1ice 4ua#it0 in conte=ts and cu#tures 1er0
different from the de1e#o"ed countries+ e1en though research has /egun to e="#ore this
area >Bo#ton and M0ers+ *AA7?(
87
In #ight of this "aucit0 of research on ser1ice 4ua#it0 issues in de1e#o"ing countries #ike
India+ it has /ecome 1er0 im"ortant that /anks in India determine the ser1ice 4ua#it0
factors+ 6hich are "ertinent to the customerJs se#ection "rocess+ as 6ith increased
com"etition+ 6ith the ad1ent of internationa# /anking+ the trend to6ards #arger /ank
ho#ding com"anies+ and inno1ations in the market"#ace+ customers are no6 ha1ing
greater difficu#t0 in se#ecting one institution from another( In order to "ro1ide e=ce##ent
ser1ice 4ua#it0+ identif0ing the under#0ing dimensions of the ser1ice 4ua#it0 construct is
the first ste" in the definition and hence "ro1ision of 4ua#it0 ser1ice and hence shou#d /e
a centra# concern for retai# /ank managers as 6e## as ser1ice management academics and
"ractitioners(
This "a"er endea1ors to fi## the ga" in the ser1ice 4ua#it0 #iterature /0 e="#oring the
dimensions of customer "ercei1ed ser1ice 4ua#it0 in the conte=t of the Indian retai#
/anking industr0( A set of ser1ice 4ua#it0 "arameters+ dra6n from customersJ "erce"tions
a/out ser1ice 4ua#it0 as 6e## as the /ank marketing and ser1ice 4ua#it0 #iterature ha1e
/een dra6n u"( These "arameters ha1e /een used in the conte=t of four of the #argest
/anks in India to identif0 the under#0ing dimensions of ser1ice 4ua#it0( !ina##0+ the "a"er
has dra6n u"on the findings of the ser1ice 4ua#it0 dimensions to contend the initiati1es
that /anksJ managers can take to enhance em"#o0eesJ ski##s and attitudes and insti## a
customer-ser1ice cu#ture(
(he Dimensions of Ser+ice Auality
Under"inning our understanding of ser1ice 4ua#it0 is an arra0 of factors or determinants(
A num/er of researchers ha1e "ro1ided #ists of 4ua#it0 determinants+ /ut the /est kno6n
determinants emanate from Parasuraman and co##eagues from the USA+ 6ho found fi1e
dimensions of ser1ice 4ua#it0+ name#0+ tangi/#es+ re#ia/i#it0+ res"onsi1eness+ assurance
and em"ath0 and used these as the /asis for their ser1ice 4ua#it0 measurement instrument+
SERMNUA, >Parasuraman et al(+ )B@@D Leitham# et al(+ )BBA?(
The resu#t 6as the de1e#o"ment of the SERMNUA, instrument+ /ased on the ga" mode#(
The centra# idea in this mode# is that ser1ice 4ua#it0 is a function of the difference scores
or ga"s /et6een e="ectations and "erce"tions( An im"ortant ad1antage of the
SERMNUA, instrument is that it has /een "ro1en 1a#id and re#ia/#e across a #arge range
of ser1ice conte=ts( %o6e1er+ 6hi#e the SERMNUA, instrument has /een 6ide#0 used+ it
88
has /een su/5ected to certain criticisms as 6e##( The contention that ser1ice 4ua#it0
consists of fi1e /asic dimensions >Parasuraman et al(+ )B@@? is according to some
researchers 4uestiona/#e and the0 ha1e suggested that SERMNUA,Js dimensions are
conte=tua# and not uni1ersa##0 a""#ica/#e >Ekinci F Ri#e0+ )BBBD Bro6n et al(+ )BB7D
Cronin F Ta0#or+ )BB*D Teas+ )BB7D Bouman F Mander .ie#e+ )BB*D 'ag#iano F
%athcote+ )BB8+ &ang and James+ *AA8D ,ee+ *AA9D !o6dar+ *AA<?( Instead+ the num/er
and com"osition of the ser1ice 4ua#it0 dimensions are "ro/a/#0 de"endant on the ser1ice
setting >Bro6n et al(+ )BB7D Carman+ )BBA?( It has /een suggested that for some ser1ices
the SERMNUA, instrument needs considera/#e ada"tation >a/ho#kar et al(+ )BB:? and
that items used to measure ser1ice 4ua#it0 shou#d ref#ect the s"ecific ser1ice setting under
in1estigation+ and that it is necessar0 in this regard to modif0 some of the items and add
or de#ete items as re4uired >Carman+ )BBA?( Moreo1er+ research suggests that cu#ture ma0
"#a0 a fundamenta# ro#e in determining ho6 consumers "ercei1e 6hat constitutes ser1ice
4ua#it0(
In a nutshe##+ there are sti## issues and 1ar0ing o"inions a/out the dimensiona#it0 of
ser1ice 4ua#it0 and the uni1ersa#it0 of the fi1e dimensions+ >Rust and O#i1er+ )BB8?( These
are of interest to and significant for users of SERMNUA, and for a## those 6ho 6ish to
understand /etter the conce"t of ser1ice 4ua#it0(
%ence there is sti## a need for fundamenta# research into the dimensiona#it0 of ser1ice
4ua#it0 /earing in mind the conte=tua# circumstances+ the s"ecific industr0 and the
s"ecific ser1ice setting(
=.= M#RK'(ING S(R#('GI'S
!inancing ra"id industria# gro6thK.ith the Indian econom0 gro6ing at a /#istering "ace
on the /ack of strong industria# and ser1ices gro6th+ the Indian com"anies are #ooking to
/ui#d u" ca"acit0 to meet future demand(KBanks "#a0 a "i1ota# ro#e in financing this
industria# gro6th( Techno#ogica# inno1ations F cha##engesKBanks are aggressi1e#0
ado"ting the #atest techno#og0 in order to im"ro1e "roduct offerings+ customer ser1ice+
and o"erationa# efficienc0 and risk management s0stems(
89
!inancia# inc#usion F Rura# K MicrofinanceKIn the 4uest for ne6 markets and customer
segments+ as 6e## as 6ith the RBI directi1es in this area+ /anks are #ooking at the rura#
and un/anked segments in a ne6 #ight as a huge /usiness o""ortunit0(
Con1ergence to a sing#e so#ution "ro1iderK.ith "ressures on the s"reads and the
com"etition in the ur/an markets increasing ra"id#0+ /anks need to de1e#o" ne6 6a0s to
sustain "rofita/i#it0(KBanks #ed to a "#ethora of ne6 "roducts+ hence /ecoming a one sto"
sho" for a## financia# so#utions(
Roadma" /0 RBI for foreign /anksKThe RBI has #aid out a t6o "hased roadma" for
gi1ing greater freedom to the foreign /anks in India(KThis has s"urred the entr0 of
se1era# other foreign /anks in India+ a#ong 6ith acting as a signa# to the domestic "#a0ers
to "u## u" their socks to face the ne6 com"etitors(
'ro6th in retai# #endingKThe under /anked Indian "o"u#ation as 6e## as the high margin
on retai# "roducts makes this a 1er0 attracti1e market for the /anks(KThe a##-inc#usi1e
nature of this gro6th in terms of sectors co1ers a## consumer segments as 6e## as "roduct
segments(
emand for deri1ati1es F other risk management "roductsKThe increasing#0 d0namic
/usiness scenario and financia# so"histication a#so increase the need for customi;ed
e=otic financia# "roducts(KThe com"#e= and "ecu#iar nature of risks faced /0 the
com"anies are "assed onto the /anks(KInno1ati1e financia# too#s and ad1anced risk
management methods are re4uired /0 the /anks to ca"ita#i;e on this /usiness o""ortunit0(
=.> M'#S4RING C4S($M'R S#(IS7#C(I$N IN (8' INDI#N
/#NKING S'C($R -

Banking o"erations are /ecoming increasing#0 customer dictated( The demand for
/anking su"er ma##sC offering one-sto" integrated financia# ser1ices is 6e## on the rise(
The a/i#it0 of /anks to offer c#ients access to se1era# markets for different c#asses of
financia# instruments has /ecome a 1a#ua/#e com"etiti1e edge( Con1ergence in the
industr0 to cater to the changing demogra"hic e="ectations is no6 more than e1ident(
8:
Banc assurance and other forms of cross se##ing and strategic a##iances 6i## soon a#ter the
/usiness d0namics of /anks and fue# the "rocess of conso#idation for increased sco"e of
/usiness and re1enue( The thrust on farm sector+ hea#th sector and ser1ices offers se1era#
in1estment #inkages( In short+ the domestic econom0 is an increasing "ie 6hich offers
e=tensi1e economies of sca#e that on#0 #arge /anks 6i## /e in a "osition to ta"( .ith the
"henomena# increase in the countr0Cs "o"u#ation and the increased demand for ke0
differentiators for each /ankCs future success( Thus it is im"erati1e for /anks to get usefu#
feed/ack on their actua# res"onse time and customer ser1ice 4ua#it0 as"ects of retai#
/anking+ 6hich in turn 6i## he#" them take "ositi1e ste"s to maintain a com"etiti1e edge(

The 6orking of the customerCs mind is a m0ster0 6hich is difficu#t to so#1e and
understanding the nuances of 6hat customer satisfaction is+ a cha##enging task( This
e=ercise in the conte=t of the /anking industr0 6i## gi1e us an insight into the "arameters
of customer satisfaction and their measurement( This 1ita# information 6i## he#" us to
/ui#d satisfaction amongst the customers and customer #o0a#t0 in the #ong run 6hich is an
integra# "art of an0 /usiness( The customerCs re4uirements must /e trans#ated and
4uantified into measura/#e targets( This "ro1ides an eas0 6a0 to monitor im"ro1ements+
and deciding u"on the attri/utes that need to /e concentrated on in order to im"ro1e
customer satisfaction( .e can recogni;e 6here 6e need to make changes to create
im"ro1ements and determine if these changes+ after im"#emented+ ha1e #ed to increased
customer satisfaction( EIf 0ou cannot measure it+ 0ou cannot im"ro1e it(E - ,ord .i##iam
Thomson &e#1in >)@*8-)BA<?(
8<
>. IM<#C( $7 #(M $N C4S($M'R S#(IS7#C(I$N -
This "resents the im"act of ATM on customer satisfaction( This is a com"arati1e stud0 of
three ma5or /anks i(e( State Bank of India+ ICICI /ank and %!C /ank( This "a"er has
/een di1ided into t6o sections( !irst section "resents the introduction of ATM+ /rief
histor0 of three Banks com"i#ed through the #iterature a1ai#a/#e in the fie#d( It a#so
inc#udes the re1ie6 of the 1arious ser1ices "ro1ided /0 the three /anks under stud0(
Second section "resents the resu#t o/tained on the /asis of the data co##ected for the three
/anks( A sam"#e of 7:A res"ondents e4ua##0 re"resenting each /ank has /een taken
through 4uestionnaire( ata has a#so /een co##ected through inter1ie6 a#so( Then 1arious
statistica# too#s ha1e /een used according#0 to com"i#e the resu#t(
K': %$RDSC ATM+ Customer satisfaction+ !ees+ Pro/#ems+ ATM ser1ices+ Banks(
#(M means neither Fa+oids tra+eling with moneyG nor Fany time money,G /ut
certain#0 im"#ies /oth( S#im ATM cards are fast re"#acing confounding 6ithdra6a# forms
as a con1enient 6a0 of getting 0our mone0 from /anks( In a 6a0+ the0 are re6riting the
ru#es of financia# transaction( A smart "erson no #onger needs to carr0 a 6a##et-fu## of
"a"er mone0 on his "erson( A## he needs to do is fish out an ATM >automated te##er
machine? card+ insert it in the s#ot+ "unch in a fe6 detai#s and go home 6ith hard cash(
#utomated teller machines 0#(Ms1 6ere the first 6e##-kno6n machines to "ro1ide
e#ectronic access to customers( .ith ad1ent of Automatic Te##er Machines >ATM?+ /anks
are a/#e to ser1e customers outside the /anking ha##( ATM is designed to "erform the
most im"ortant function of /ank( It is o"erated /0 "#astic card 6ith its s"ecia# features(
The "#astic card is re"#acing che4ue+ "ersona# attendance of the customer+ /anking hourJs
restrictions and "a"er /ased 1erification( ATMs ha1e made hard cash 5ust seconds a6a0
a## throughout the da0 at e1er0 corner of the g#o/e( ATMs a##o6 0ou to do a num/er of
8@
/anking functions K such as 6ithdra6ing cash from oneJs account+ making /a#ance
in4uiries and transferring mone0 from one account to another K using a "#astic+ magnetic-
stri" card and "ersona# identification num/er issued /0 the financia# institution(
(he Indian #(M industry has seen e="#osi1e gro6th in recent times( ATMs re"resent
the sing#e #argest in1estment in the e#ectronic channe# ser1ices for the Banks( In India+
%SBC set the trend and set u" the first ATM machine here in )B@<( Since then+ the0 ha1e
/ecome a common sight in man0 of our metros( Automated Te##er Machines >ATMs?
ha1e gained "rominence as a de#i1er0 channe# for /anking transactions in India( Banks
ha1e /een de"#o0ing ATMs to increase their reach( .hi#e ATMs faci#itate a 1ariet0 of
/anking transactions for customers+ their main uti#it0 has /een for cash 6ithdra6a# and
/a#ance en4uir0( As at the end of Octo/er *AA<+ the num/er of ATMs de"#o0ed in India
6as 7)+A<@( According to some estimates the tota# cash mo1ement through ATMs across
India 6as around Rs( <A+AAA crore in !$ A:( C#ear#0+ industr0 6atchers forecast a /right
future for ATMs in India( .hi#e the ATM is a great ser1ice for customers+ for the /anks it
means immense sa1ings on the cost of o"erations( .hi#e a t0"ica# cash transaction
carried out in a /anks /ranch "remise 6ou#d cost Rs 8A that in an ATM 6i## on#0 cost
Rs)@trans#ating into a cost sa1ing of Rs ** "er transaction(
#(M Networ.s
The ATMs of a /ank are connected to the accounting "#atform of the /ank through ATM
s6itches( Inter-/ank ATM net6orks are created /0 setting u" a"e= #e1e# s6itches to
communicate /et6een the ATM s6itches of different /anks( The inter-/ank ATM
net6orks faci#itate the use of ATM cards of one /ank at the ATM>s? of other /anks for
/asic ser1ices #ike cash 6ithdra6a# and /a#ance en4uir0( Banks o6ning the ATMs charge
a fee for "ro1iding the ATM faci#it0 to the customers of other /anks( The ATM de"#o0ing
/ank from the card issuing /anks reco1ers this fee referred to as Pinterchange feeJ(
%o6e1er the interchange fee is not fi=ed across /anks and de"ends on the terms of
/i#atera# I mu#ti#atera# arrangements( Banks 6ith #arger ATM net6ork treat interchange
fee as an im"ortant stream of re1enue( >Sultan Singh+ Ms. Komal, 0<h.D.1
8B
?. #N#&:SIS @ IN('R<R'(#(I$N-
It takes continuous effort to maintain high customer satisfaction #e1e#s (,y Ke+in
Cacio))o1
#s mar.ets shrin.+ com"anies are scram/#ing to /oost customer satisfaction and kee"
their current customers rather than de1oting additiona# resources to chase "otentia# ne6
customers( The c#aim that it costs fi1e to eight times as much to get ne6 customers than
to ho#d on to o#d ones is ke0 to understanding the dri1e to6ard /enchmarking and
tracking customer satisfaction(
Measuring customer satisfaction is a re#ati1e#0 ne6 conce"t to man0 com"anies that
ha1e /een focused e=c#usi1e#0 on income statements and /a#ance sheets( Com"anies no6
recogni;e that the ne6 g#o/a# econom0 has changed things fore1er( Increased
com"etition+ cro6ded markets 6ith #itt#e "roduct differentiation and 0ears of continua#
sa#es gro6th fo##o6ed /0 t6o decades of f#attened sa#es cur1es ha1e indicated to toda0Cs
shar" com"etitors that their focus must change(
Com"etitors that are "ros"ering in the ne6 g#o/a# econom0 recogni;e that measuring
customer satisfaction is ke0( On#0 /0 doing so can the0 ho#d on to the customers the0
ha1e and understand ho6 to /etter attract ne6 customers( The com"etitors 6ho 6i## /e
successfu# recogni;e that customer satisfaction is a critica# strategic 6ea"on that can
/ring increased market share and increased "rofits(
The "ro/#em com"anies face+ ho6e1er+ is e=act#0 ho6 to do a## of this and do it 6e##(
The0 need to understand ho6 to 4uantif0 measure and track customer satisfaction(
.ithout a c#ear and accurate sense of 6hat needs to /e measured and ho6 to co##ect+
9A
ana#0;e and use the data as a strategic 6ea"on to dri1e the /usiness+ no firm can /e
effecti1e in this ne6 /usiness c#imate( P#ans constructed using customer satisfaction
research resu#ts can /e designed to target customers and "rocesses that are most a/#e to
e=tend "rofits(
Too man0 com"anies re#0 on outdated and unre#ia/#e measures of customer satisfaction(
The0 6atch sa#es 1o#ume( The0 #isten to sa#es re"s descri/ing their customersC states of
mind( The0 track and count the fre4uenc0 of com"#aints( And the0 6atch aging accounts
recei1a/#e re"orts+ recogni;ing that unha""0 customers "a0 as #ate as "ossi/#e--if at a##(
.hi#e these a""roaches are not com"#ete#0 6ithout 1a#ue+ the0 are no su/stitute for a
1a#id+ 6e##-designed customer satisfaction sur1e0ing "rogram(
ItCs no sur"rise to find that market #eaders differ from the rest of the industr0 in that
the0Cre designed to hear the 1oice of the customer and achie1e customer satisfaction( In
these com"aniesH
Marketing and sa#es em"#o0ees are "rimari#0 res"onsi/#e for designing >6ith customer
in"ut? customer satisfaction sur1e0ing "rograms+ 4uestionnaires and focus grou"s(
To" management and marketing di1isions cham"ion the "rograms(
Cor"orate e1a#uations inc#ude not on#0 their o6n customer satisfaction ratings /ut a#so
those of their com"etitors(
Satisfaction resu#ts are made a1ai#a/#e to a## em"#o0ees(
Customers are informed a/out changes /rought a/out as the direct resu#t of #istening to
their needs(
Interna# and e=terna# 4ua#it0 measures are often tied together(
Customer satisfaction is incor"orated into the strategic focus of the com"an0 1ia the
mission statement(
9)
Stakeho#der com"ensation is tied direct#0 to the customer satisfaction sur1e0ing
"rogram(
A concentrated effort is made to re#ate the customer satisfaction measurement resu#ts
to interna# "rocess metrics(
To /e successfu#+ com"anies need a customer satisfaction sur1e0ing s0stem that meets the
fo##o6ing criteriaH
The s0stem must /e re#ati1e#0 eas0 to design and understand(
It must /e credi/#e enough that em"#o0ee "erformance and com"ensation can /e
attached to the fina# resu#ts(
It must generate actiona/#e re"orts for management(
Increasing com"etition >6hether for-"rofit or non"rofit? is forcing /usinesses to "a0
much more attention to satisf0ing customers( >It ma0 he#" the reader to notice the ro#e of
customer satisfaction in the o1era## conte=t of "roduct or ser1ice de1e#o"ment and
management( See ProductISer1ice Management( A#so notice the Re#ated Info >inc#uding
customer ser1ice? in the #i/rar0(?
Retai# /anking has undergone ra"id changes 6ith the introduction of ne6 techno#og0
/ased channe#s and its interesting to note ho6 "eo"#e ha1e ada"ted to different 6a0s of
deri1ing their /anking needs( This stud0 uses "s0chogra"hics to stud0 the /anking
channe# ada"tation and the trends in the retai# /anking scenario in &arnataka+ India( It has
/een found that "eo"#e c#ear#0 6ant con1enience and securit0 in their choice of /anking
channe#s(
Techno#ogica# ad1ances has 6itnessed the a""#ication of techno#og0 in increasing the
num/er of /anking channels namely #(M, Internet /an.ing, (ele /an.ing and
,ranch ,an.ing.
In retai# /anking scenario+ it is a#so im"#icit that man0 /anks are com"eting for the same
customer segment and the com/ined resources /eing s"ent in terms of channe#
9*
de1e#o"ment and other efforts ma0 e=ceed the "rofita/i#it0 of the segment targeted at+ /0
the /anks "ut together( It has /een o/ser1ed that one of the cha##enges /eing faced /0
retai# /anking sectors ha1e /een in the usage of "ro"er segmentation techni4ues /ased on
the customer "s0chogra"hics 6ith res"ect to the /anking channe#s( !or e(g( 6ho 6ou#d /e
6i##ing to use Te#e/anking and 6hat ma0 /e the under#0ing reason to do soQ Ins"ite of
introduction of internet /anking 6h0 6ou#d a 0outh sti## 1isit the nearest /ranch for his
/anking needsQ The ans6ers to these 4uestions 6ou#d resu#t in the mindset and #ifest0#e
of /anking consumers 6hich 6ou#d he#" the /ank to effecti1e#0 target the consumers
/ased on their channe# "reference+ strengthen the 6eak as"ects of channe#s in demand
and augment the ser1ice "ro1ided /0 the channe#s there/0 retaining the customer and
u#timate#0 enhancement of "rofits( Customer segmentation takes "#ace at demogra"hic
#e1e# and at "s0chogra"hic #e1e#(
Ps0chogra"hics in essence tries to stud0 and "rofi#e "eo"#e /ased on their attitudes+
Interests+ #ifest0#es and 1a#ues(
In India "s0chogra"hic "rofi#ing of consumers is sti## in its stage of infanc0( Man0
cor"orates are conducting such studies+ /ut most of resu#ts are not a1ai#a/#e for the
academic communit0(
!urthermore+ the "s0chogra"hic 1aria/#es of consumers are a#6a0s changing and it
/ecomes e1en more im"erati1e for a continuous longitudinal study to kee" track of
changes and incor"orate them in the art of marketing(
!urther+ the entr0 of mu#tinationa# /anks that are armed 6ith techni4ues to "rofi#e the
customers /ased on "s0chogra"hic attitudes are "osing a tough com"etition for the Indian
/anks(
Some of the ad1ertisements from a #arge Nationa#i;ed "u/#ic sector act more or #ess #ike
reminders to customers a/out their #arge and 6ides"read net6orks+ man0 "roducts in
their "ortfo#io that are c#ear#0 a "ure 4uantitati1e trans#ation of /anks strength rather than
the rea# com"etiti1e ad1antage that can /e deri1ed out of strategic marketing techni4ues
/ased on effecti1e segmentation(
%ence it is im"erati1e that "s0chogra"hic stud0 /e conducted on /anking customers in
India for strategic marketing "ur"oses(
97
The conce"tua# re#ationshi" /et6een effecti1e "rofi#ing and Strategic marketing can /e
/est descri/ed in the diagram(
The tota# num/er of res"ondents in this research 6as )AA( of them 7A 6ere customers of
%!C /ank +)7 from IBI+ )< from ICICI +*A from PNB and *A from SBI (the customer
of the fi1e /anks 6ere di1ided into sa1ings >:9? and current >79? accounts( The o1era##
e="erience of customers ranged from good to satisfactor0 6hi#e o"ening an account in
an0 of the fi1e /anks( The mean for e="erience 6hi#e account o"ening 6as *(9 in the
sca#e ) to <( Most of the customers o"erated their account on their o6n( A ma5orit0
referred the /ank to others and made their "urchase "a0ing /0 cash(
The customers of PNB and SBI 6ere a/o1e 79 0ears ageD those of ICICI and IBI 6ere
in age grou" of *9-79 0ears( %!C customers 6ere /e#o6 *9 0ears( The customers of
ICICI+ IBI and %!C 6ere graduates and "ost graduates 6hereas those of PNB and
SBI 6ere main#0 graduates(
Customer #ooked for information a/out the /ank from sources such as the te#e1ision+ the
ne6s"a"er+ maga;ines+ hoardings+ the /ank and others( The o1era## mean 1a#ue for the
customerJs hunt for information sho6s thatJsIhe gained information through hoardings
and the radio( %!C customers gained information through ad1ertisements on hoardingsD
IBI+ PNB and SBI /ank customer gained information from ad1ertisement on the radio+
and ICICI customers gained information through re#ati1es and friends(
The satisfaction of the customers 6ith the ser1ices "ro1ided /0 the /anks 6as 5udged on
the fo##o6ing ): 1aria/#esD ser1ice sca#eD "arking "#ace Dattitudes of the /ank staffD
dissemination of informationD "rom"tness in 4uer0 hand#ing Dnet6orking of the /ank
>/ranches?DATM faci#it0D de/it card Dcredit card Ddemand draft faci#it0D fi=ed de"osit
schemes D mone0 transferD #ocker faci#it0 D-mat faci#it0 Dte#e /anking (and net /anking(
Ta/#e @>a?-Customer satisfaction le+el in S/I

Satisfaction le+els Num,er of customer in )ercentage
issatisfied *9O
Satisfied 9AO
98
Mi=ed *9O
'ra"h @>a?
INTERPRETATION- There are *9O+ 9AO and *9O res"ondent 6ho is issatisfied+
satisfied and mi=ed res"ecti1e#0 in SBI(
Ta/#e @>/?-Customer satisfaction le+el in <N/
Satisfaction le+els Num,er of customer in )ercentage
issatisfied 79O
Satisfied 8AO
Mi=ed *9O
'ra"h @>/?
INTERPRETATION- There are 79O+ 8AO+ *9O customers 6ho is issatisfied+ Satisfied
and mi=ed res"ecti1e#0 from the ser1ice of Pun5a/ Nationa# Bank(
Ta/#e @>c?-Customer Satisfaction #e1e# in IBI
99
Satisfaction le+els Num,er of customer in )ercentage
issatisfied 7A(<O
Satisfied :B(*O
Mi=ed AO
'ra"h @>c?
INTERPRETATION- There are 7A(<O+ :B(*O and AO Customers of IBI 6ho is
issatisfied+ Satisfied and mi=ed res"ecti1e#0 /0 the ser1ice of the /ank(
Ta/#e @>d?-Customer Satisfaction #e1e# in ICICI
Satisfaction le+els Num,er of customer in )ercentage
issatisfied 9(@O
Satisfied <:(8O
Mi=ed )<(:O
'ra"h @>d?
INTERPRETATION- There are 9(@O+ <:(8O and )<(:O customers of ICICI /ank 6ho is
issatisfied+ Satisfied and mi=ed res"ecti1e#0 /0 the ser1ice "ro1ided /0 the /ank( .e
can sa0 that the customer satisfaction in the ICICI /ank is much(
9:
Ta/#e @>e?-Customer Satisfaction #e1e# in %!C
Satisfaction le+els Num,er of customer in )ercentage
issatisfied ):(:O
Satisfied :7(7O
Mi=ed *A(AO
'ra"h @>e?
INTERPRETATION- There are ):(:O+ :7(7O+ and *A(AO customers from %!C /ank
6ho is issatisfied+ Satisfied and mi=ed res"ecti1e#0 /0 the ser1ice of the /ank(
Ta/#e @>f?-A## o1er Customer satisfaction #e1e# in Indian Banking sector(
Satisfaction le+els Num,er of customer in )ercentage
issatisfied *7(AO
Satisfied 9B(AO
Mi=ed )@(AO
'ra"h @>f?
INTERPRETATION- There is a## o1er *7(AO+ 9B(AO and )@(AO customers from the
Indian /anks 6ho are dissatisfied+ satisfied and mi=ed res"ecti1e#0 /0 the ser1ice of
/anks(
9<
The a/o1e inter"retation sho6s that the customer satisfaction #e1e# in Pri1ate sector
/anks is much com"ared to Pu/#ic sector /anks(
". C$NC&4SI$N @ S4MM#R:-
The Banking sector in India is undergoing ma5or changes due to com"etition and the
ad1ent of techno#og0( The customer is #ooking for /etter 4ua#it0 and ser1ices 6hich can
9@
"ro1ide himIher 6ith satisfaction( This stud0 re1ea#s the different #e1e#s of satisfaction
that customer had 6ith their /anks and he#"s identif0 the factors >or re#ationshi"
dimensions? res"onsi/#e for satisf0ing the customer( This 6ou#d he#" in enhancing the
re#ationshi" /et6een the t6o+ and thus aid decision makers in /anks to identif0 the ma5or
factors that determine satisfaction( Man0 ser1ice firms+ inc#uding retai# /anks ha1e /een
measuring customer satisfaction and 4ua#it0 to determine ho6 6e## the0 are meeting
customer needs( This stud0 deri1es its /asic findings and is a#so in #ine 6ith em"irica#
findings 6ith res"ect to customer satisfaction /0 other researchers(
,ooking at the demogra"hics of the customer and satisfaction 6ith the ser1ices+:8
"ercent customers of IBI +ICICI and %!C are in age grou" of *9-79 0ears +are "ost
graduates and their satisfaction is highest 6ith mu#ti channe# /anking(<) "ercent of the
customers of SBI are a/o1e 79 0ears+ are graduates and their satisfaction is highest 6ith
traditiona# faci#ities( These findings "ro"ose that the "ri1ate /anks name#0 ICICI+ IBI+
and %!C ha1e /een a/#e to attract the 0ounger customers+ 6ith higher educationa#
#e1e#s+ 6ho are comforta/#e 6ith the usage of mu#ti channe# /anking( On the other hand
the customer of nationa# /ank+ SBI are o#der in age and are satisfied 6ith the traditiona#
faci#ities(SBI 6ith the #argest net6ork of /ranches in India+ has gi1en com"etition to the
"ri1ate /anks and has retained its o#der customers /0 satisf0ing them 6ith the traditiona#
faci#ities(
Perce"tua# ma""ing has /een e=tensi1e#0 used in marketing for 1arious a""#ications
6here a manager 6ants to kno6 the cogniti1e dimensions that consumers use to e1a#uate
"roducts and ser1ices( Perce"tua# ma""ing can a#so assess the re#ati1e "ositions of
1arious "roducts and ser1ices( This stud0 has created a "erce"tua# ma" using factors
scores of each of fi1e /anks under stud0( These ma"s 6i## he#" identif0 ho6 each /ank is
"ositioned in the customerJs mind( .e can see from e=hi/it : that customers find most
satisfaction 6ith the traditiona# faci#ities of state /ank of India and #east satisfaction 6ith
%!C /ank( Customers ha1e ma=imum satisfaction 6ith mu#ti channe# /anking faci#ities
of ICICI /ank and #east satisfaction 6ith Pun5a/ nationa# /ank( Interna# marketing
"ro1ides ma=imum satisfaction to customers of ICICI /ank and #east to those of state
9B
/ank of India( Though SBI has a #argest net6ork of /ranches its focus on customer
satisfaction 6ith res"ect to an0 time an06here cou#d do 6ith im"ro1ement(
Perce"tua# ma""ing is an im"ortant marketing research too# used in man0 areas of
marketing( Strategies /ased on "erce"tua# ma"s ha1e #ed to increased "rofits+ /etter
market contro# and more sta/#e gro6th( a ranking score sheet of the customer "erce"tion
/ased on "erce"tua# ma""ing (the resu#t from this stud0 cou#d "ro1ide manageria# #essons
on assessment of strengths+ im"ro1ement of ser1ices and in e1o#1ing a research strateg0
that 6i## /enefit the management of /anks(
Another finding from this stud0 emerges 6ith regard to information seeking( .hi#e most
of the customers of the other /anks in the stud0 ac4uired information a/out the /anks
through the radio or hoardings( The customers of ICICI Bank got information from their
friends and re#ati1es( This im"#ies that the /ank is a/#e to satisf0 its customer 6ho acts as
a referra# market for the /ank( This he#"s the /ank to ac4uire ne6 customers at #o6 cost(
Thus /anks must /e acti1e#0 in1o#1ed in ac4uiring+ satisf0ing and retaining customers(
A#so the resu#ts suggest that satisfaction of the customer is different across the fi1e /anks
under the stud0(
(raditional facilities- Multi channel /an.ing Internal Mar.eting
e/it card Te#e /anking Ser1ice sca#e
Credit card Net /anking Parking s"ace
emand draft faci#it0 -mat Attitude of /ank staff
!i=ed de"osits issemination of information
Mone0 transfer Nuer0 %and#ing
,ocker faci#it0
ATM
:A
Net6orking
Ta/#e B>a?-Ran.ing score sheet of customer )erce)tion-
Ser1ice
imension
State
/ank of
India
Pun5a/
Nationa#
Bank
IBI ICICI %!C
Traditiona#
faci#ities
) 8 * 7 9
Mu#ti
channe#
/anking
8 9 * ) 7
Interna#
marketing
9 7 8 ) *
:)
SBI PNB IBI ICICI %!C
'ra"h B>a?
INTERPRETATION- This is the gra"h sho6ing Traditiona# faci#ities+ Mu#ti channe#
/anking and interna# marketing in fi1e Indian /anks SBI+ PNB+ IBI+ ICICI and %!C(
According to traditiona# faci#ities SBI is in num/er one "osition and %!C comes in
num/er fi1e "osition( And IBI+ ICICI and PNB come under the second+ third and fourth
"osition res"ecti1e#0(
In terms of Mu#ti channe# /anking ICICI is in first "osition and PNB is in Num/er fi1e
"osition( And IBI+ %!C and SBI come second+ third and fourth "osition res"ecti1e#0(
In terms of Interna# marketing ICICI is in first "osition and SBI comes under the fifth
"osition( And %!C+ PNB+ IBI comes under the "osition of second+ third and fourth
res"ecti1e#0(
SBI PNB IBI ICICI %!C
INTERPRETATION- According to traditiona# faci#ities SBI is in num/er one "osition
and %!C comes in num/er fi1e "osition( And IBI+ ICICI and PNB come under the
second+ third and fourth "osition res"ecti1e#0(
:*
SBI PNB IBI ICICI %!C
INTERPRETATION- In terms of interna# marketing ICICI is in first "osition and SBI
comes under the fifth "osition( And %!C+ PNB+ IBI comes under the "osition of
second+ third and fourth res"ecti1e#0(
SBI PNB IBI ICICI %!C
INTERPRETATION- In terms of Mu#ti channe# /anking ICICI is in first "osition and
PNB is in Num/er fi1e "osition( And IBI+ %!C and SBI come second+ third and
fourth "osition res"ecti1e#0(
Our findings im"#0 that /ank shou#d take care of the needs of customers 6hen
introducing 1arious ser1ices to them( Customers of ICICI+ IBI+ %!C+ PNB+ and SBI
are either in ser1ices or are se#f em"#o0ed( Man0 customers of SBI and PNB are retired(
Thus /anks cou#d en1isage a strateg0 to ser1e customers 6ith different occu"ations and
educationa# /ackgrounds( Bank must ad1ance their customer-centric strategies /0
:7
"ro1iding satisfaction through their ser1ices 6hich 6i## #ead to /etter re#ationshi"
/ui#ding and "rofits for the /anks( The satisfaction of the customer 6ith the ser1ices of
Indian /anks is #inked 6ith the "erformance of the /anks (thus it is im"ortant for /anks to
#ook into satisfaction of the customer as re#ationshi" marketing strateg0(
!. &IMI(#(I$NS
There are certain #imitations of this stud0(
Sam"#e si;e is sma## so there ma0 /e "ossi/#e that the desired #e1e# of accurac0
not e=ist(
This stud0 is conducted on#0 in sma## area so there ma0 /e chance of Inaccurac0
of the resu#t(
:8
In se#ecting the Sam"#e+ there are chances of sam"#ing errors(
Sometimes some res"ondent do not gi1e right ans6ers+ thatJs 6h0 1ariations ma0
/e "ossi/#e(
This stud0 is a""#ica/#e in e#hi on#0 not in 6ho#e India(

R'7'R'NC'S-
,o1e#ock+ Christo"her+ *AA)+ ser1ices marketingD "eo"#e+ Techno#og0+ strateg0+ 8
th
edition+ "rentice %a##(
,e1+ B+ *AA)+ Intangi/#e management+ measurement and re"orting .ashington CD
Brookings Institute "ress(
C R &othari K Research methodo#og0
:9
P N Marshne0 K Banking #a6 and Practice
Customer satisfaction in Indian /ankingH a case stud0 of $amuna Nagar istrict in
%ar0ana( Po#itica# Econom0 Journa# of India+ Jan-June+ *AA@ /0 Ra5 &umar(
Customer Satisfaction &e0 'ro6th to BanksH An artic#e from The %indu Artic#e on
customer re#ationshi" management in /anking sector /0 r(!B Singh( Artic#e on
Measuring Customer Satisfaction in the Banking Industr0 /0 r( Mano5 &umar as(
'itman+ ,a6rence J(D Car# ( Mcanie# >*AA9?( The Future of Business: The
Essentials( Mason+ OhioH South-.estern( ISBN A7*87*A*@A(
John+ Jo/0 >*AA7?( Fundamentals of Customer-Focused Management: Competing
Through Service( .est"ort+ Conn(H Praeger( ISBN B<@)9:<*A9:8A(
Berr0+ ,eonard ,(D A( Parasuraman >)BB)?( Marketing Services: Competing Through
Quality( Ne6 $orkH !ree Press( ISBN B<@AA*BA7A<BA(
&ess#er+ Shei#a >*AA7?( Customer satisfaction toolkit for S! "##$:%###( Mi#6aukee+
.is(H ASN Nua#it0 Press( ISBN A@<7@B99B*(
Johnson+ Michae# (D Anders 'ustafsson/+ Tor .a##in Andreassenc+ ,ine ,er1ikc and
Jaesung Cha >*AA)?( EThe e1o#ution and future of nationa# customer satisfaction inde=
mode#sE( &ournal of Economic 'sychology 33 >*?H *)<K*89( ISSN 0167-470(
B#uestein+ A/ramD Michae# Moriart0D Rona#d J Sanderson >*AA7?( The Customer
Satisfaction (udit( A=minsterH Cam/ridge Strateg0 Pu/#ications( ISBN B<@)BA*877B@)(
(Re=ha N+ kingshott RPJ and A. ASS >*AA7? 2The im"act of Re#ationa# "#an on
Ado"tion of e#ectronic Banking3 Journa# of ser1ice marketing+ Mo#()< No()+
,e1es4ue+ and MC ouga## >)BB:? 2eterminants of customer Satisfaction in Banking3
Internationa# Journa# of Bank Marketing+ )8><?+
Ta0#or and Baker >)BB8? 2An Assessment of the re#ationshi" /et6een ser1ice 4ua#it0 and
customer satisfaction in the formation of consumer Purchase intentions( Journa# of
::
Retai#ing <A>*? PP( ):7-)<@(8(Bitner+ M(J( and A(R( %u//ert )BB8 2Encounter
satisfaction 1ersus o1era## satisfaction 1ersus 4ua#it03( In R(T( Rust and R(, Oi#1er >eds?
2Ser1ice 4ua#it03H Ne6 irections in Theor0 and "ractice ,ondonH sage "u/#ication(
Cronin+ J(Jose"h+ Jr(+ and S(A( Ta0#or( )BB* Measuring Ser1ice 4ua#it0D a re-e=amination
and e=tension( Journa# of Marketing 9:"" 99-:@(:(MC ouga##+ ,e1es4ue >)BB8? 2A
re1ised re1ie6 of ser1ice 4ua#it0 dimensionsH An em"irica# in1estigation3 Journa# of
"rofessiona# ser1ices marketing ))>)?(

Singh S >*AA8? 2A A""raisa# of Customer ser1ice of Pu/#ic Sector Banks+3 IBA Bu##etin+
Mo#( SSMI+ NoH@ >August?+ PP 7A-7<(@(U""a# R(& >*AA:?+ Indian Banking Information
Techno#og0+ Ne6 Centur0 Pu/#ications+ Ne6 e#hi(B(Singh and Am"hora >)BB7?+
2Customer Satisfaction in Banking ser1icesD A stud0 of Amristar3+ ed(+ Radha
Pu/#ication+ Ne6 e#hi(
Internet we,sitesC
666(goog#e(com
htt"HIIen(6iki"edia(orgI6ikiICustomerTsatisfaction
CategoriesH Business terms U Consumer /eha1ior(
666(scri/d(com
A4'S(I$NN#IR'
ear Res"ondent+
I am a student of & R Manga#am Institute of Management( And doing MBA( I ha1e
undertaken a "ro5ect for 6hich I intend to "ose a 4uestionnaire aimed at com"aring the
customer satisfaction in the Indian /anking sector( $our coo"eration is dee"#0 so#icited to
"ro1ide the re#e1ant information( I assure that information 6i## /e ke"t confidentia#(
Name of Customer TTTTTTTTTTTTTTT Mo/i#e No(TTTTTTTTTTTTTT
Name of the /ank and t0"e of accountTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT
P#ease ans6er the 4uestions and tick at the "#ace that matches 0our o"inion(
Mo/i#eITe#e Banking(
:<
%o6 6ou#d 0ou descri/e 0our 1ie6s a/out Customer Ser1ice Re"resentati1esQ P#ease
tick in
The a""ro"riate co#umn(
>)H Mer0 issatisfiedI*H issatisfiedI7H SatisfiedI8H Mer0 satisfiedI9H %igh#0 Satisfied?+
s"ecif0 the Reason if not using the ser1ice
) * 7 8 9
Ca## ans6ering time
!#a6#essIcorrect o"erations(
Understanding and re"#0ing 4ueries correct#0
Communication ski##sI"ositi1e a""roach
'enera# assessment a/out the ser1ice
/ranch /an.ing
%o6 6ou#d 0ou descri/e 0our 1ie6s a/out Branch BankingQ P#ease tick in the
a""ro"riate co#umn(
>)H Mer0 issatisfiedI*H issatisfiedI7H SatisfiedI8H Mer0 satisfiedI9H %igh#0 Satisfied?
) * 7 8 9
/eha+ior of the staff
Time taken to "rocess the transaction
%or.ing 8ours
'enera# assessment a/out the ser1ices "ro1ided /0 the /ranch
Internet /an.ing
%o6 6ou#d 0ou descri/e 0our 1ie6s a/out Internet Banking ser1icesQ P#ease tick in the
a""ro"riate co#umn(
>)H Mer0 issatisfiedI*H issatisfiedI7H SatisfiedI8H Mer0 satisfiedI9H %igh#0 Satisfied?+
s"ecif0 the reason if not using the ser1ice(
) * 7 8 9
Page setu"IMenu f#o6
Ease of useIna1igation
S"eed of "age #oading
Mariet0 of transactions
General assessment a,out the ser+ice
:@
ATM Banking
%o6 6ou#d 0ou descri/e 0our 1ie6s a/out ATM Banking ser1icesQ P#ease tick in the
a""ro"riate co#umn(
>)H Mer0 issatisfiedI*H issatisfiedI7H SatisfiedI8H Mer0 satisfiedI9H %igh#0 Satisfied(
Reason if not using the ser+ice
) * 7 8 9
ATM net6ork distri/ution
Continuous ser1ice
Mariet0 of transactions
Eas0 of screen use
'enera# assessment a/out the ser1ice
(he o+erall e-)erience of customer ranged from good to satisfactory while o)ening
an account in any of fi+e ,an.s
Sca#e )-<
Demogra)hic )rofile of the customers
emogra"hics
)( 'ender
Ma#e
!ema#e
*( Marita# status
Married
Unmarried
Other
7( Month#0 !ami#0 income
,ess than Rs)AAAA
Rs)AAAA-*AAAA
Rs*AAAA-7AAAA
Rs7AAAA-8AAAA
More than 8AAAA
8( Age
Be#o6 *9 0ears
:B
*9-79 0ears
79-89 0ears
89-99 0ears
A/o1e 99 0ears
9( Education
Secondar0
%igher secondar0
Undergraduate
'raduate
Post 'raduate
:( Occu"ation
%ome maker
Ser1ice
Se#f em"#o0ed
Retired
Students
<A