User Perception of Retail Banking Services: A Comparative Study of Public and Private Sector Banks

R A Ravi*

Due to increasing competition in retail banking, understanding the customer perception about service quality is becoming indispensable. The private sector banks are posing a very stiff competition to the public sector banks through their initiatives for meeting customer expectations and gaining a cutting edge. This is reflected by the increasing market share and better profitability of private banks in comparison to that of public sector banks. At the same time, public sector banks have also responded to the challenges posed by the private sector banks through conscious efforts to enhance their service quality. This study compares public sector banks and private sector banks in terms of user perception of their retail banking services.

Introduction
Banking in India has witnessed remarkable changes and development since the onset of the processes of liberalization, globalization and privatization. The challenges ahead for banks have greatly increased with increasing competition and the growing demand for a greater variety and superior quality of banking services. The growth of the retail banking industry is one area which has generated a lot of interest primarily because of the entry of many private sector banks and foreign banks, resulting in the availability of a wide variety of innovative products and services for the customers. The customer orientation of the banking sector has significantly increased in recent times. The introduction of a variety of new products and services with emphasis on quality of service clearly indicates how banks address the issue of customer needs and requirements through a customer-centric approach.

Public Sector Banks and Private Sector Banks

The Indian banking sector continues to witness domination by the public sector banks. Over the last decade, the banking sector has witnessed the entry of many new private sector banks, resulting in momentous changes. A noteworthy aspect of the private sector banks is their ability to command a proportionately higher share of net profit (9.8%), even though they have a lower share in terms of
* Senior Lecturer, St.Josephs College of Commerce, Bangalore, India. E-mail: prof_ravi@rediffmail.com 2008 The Icfai University Press. All Rights Reserved. 32 The Icfai Journal of Bank Management, Vol. VII, No. 2, 2008

customer deposits (8.2%). In comparison, the public sector banks share of total net profit is 70% and the share of deposits is 77%; these figures indicate lower profitability in terms of comparison of proportion of profits to deposits of private sector Indian banks. Private sector banks are oriented toward niche banking, unlike the public sector banks, which meet the mass banking requirements. The strategies adopted by the private sector banks are more in tune with those of the foreign banks, where emphasis is given to establishing superior benchmarks of efficiency, focusing on niche customers, providing impressive customer service and bringing about operating efficiencies by using high-end technology. Like the foreign banks, the private sector Indian banks recruit the finest manpower, employ state-of-the-art technologies and are oriented towards building a strong brand image. Even though the private sector Indian banks do not have an extensive range of branch networks, the emerging trends indicate that they pose a great threat to the public sector banks because of their increasing market share. This study is an attempt to evaluate and compare the customer perception about retail banking services offered by public sector banks with that of private sector banks.

Explanation of the Key Terms

Retail Banking
It is popularly perceived to be mass-market banking where individual customers typically use banks for services such as savings and current accounts, mortgages, loans, debit cards, credit cards, depository services, fixed deposits and investment advisory services. It also refers to services offered by banks on a small scale to customers.

Public Sector Bank

A bank whose ownership and control are vested with the government by virtue of it holding the majority of shares.

Private Sector Bank

A private sector Indian bank is one having its registered office in India, and majority of its shares are held by private parties.

User Perception
User perception is the felt experience about various attributes of a product or service by a customer, from the viewpoint of expectations, requirements and convenience.

Significance of Evaluation of User Perception

With increasing competition among the banks, the need to gain competitive advantage has become exceedingly imperative for their survival. From the customers perspective, the recent developments like the mushrooming of large multinational banking companies and increased banking innovations have caused a great deal of indecisiveness in differentiating the banks from each other in terms of their quality of service. This emerging scenario makes it necessary for the banks to identify customer perception of service quality, which strongly influences the customers behavioral intentions. This would facilitate the process of categorizing, determining and measuring, controlling and thereby improving the customer perception in the context of service quality of retail banking services.

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Objectives of the Study

To evaluate the user perception in terms of retail banking services offered by public and private sector Indian banks; To compare the user perception in terms of contentment in the context of different types of services offered by public and private sector Indian banks; and To identify the areas of overall strengths and weaknesses of public and private sector Indian banks in terms of services offered to customers

Methodology
This is an analytical study based mainly on the primary data collected through scientifically developed questionnaire. The questionnaire has been personally administered on a sample size of 120, chosen on a convenient basis from among three public sector and three private sector banks in the city of Bangalore. Canara Bank, Indian Bank and Corporation Bank represent the public sector banks, while HDFC Bank, Karnataka Bank and Centurion Bank represent the private sector banks. The sample size of 120 is divided equally as 60 from three public sector banks and 60 from three private sector banks. As a representation, two branches of each of the three banks were chosen on sector-wise basispublic and private. Twenty customers represent each bank, further divided as ten customers representing each branch. Each representative bank has been evaluated on 18 parameters. The degree of perception of customers on the parameters is quantified by using a 5-point Likert scale. The parameters have been quantified by calculating the mean score. The methodology adopted has been based upon the four dimensions of user perception of retail banking servicescustomer focus and orientation, competence, tangibles, and convenience. The 18 parameters identified for this study have been identified in terms of the above-mentioned dimensionscustomer focus and orientation, competence, tangibles and convenience. The first dimension, customer focus and orientation refers to the approach and capability of the employees of the banks in terms of their dealings with the customers. The second dimension, competence is identified with the dependability of the services offered. The third dimension tangibles is associated with physical facilities and visual appeal of the banks infrastructure, type of technology adopted and the banks communication devices. The dimension convenience takes into consideration the aspect of convenience of the banks branch locations and the access to a variety of services.

Findings
The findings relating to the four dimensions, that include the parameters of user perception, used in this study, are below:

Customer Focus and Orientation

Customer guidance and support Politeness and hospitality Handling customer grievances

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 Method of imposing service charges, fines and penalties Return on deposits

Competence
Speed, promptness and accuracy in transactions Safety of investments Confidentiality of account and transactions Variety of services offered Goodwill and reputation of the bank

Tangibles
Infrastructure facilities like parking, cafeteria, ATM, etc. Banks network and physical facilities to operate account from any part of the country/globe Ambiance and dcor (interiors) Mobile banking, e-banking, Internet banking and use of other latest technologies

Convenience
Convenience in operating account Timings of the bank Variety of income earning options Communication and providing prompt information

Analysis
The analysis of the above-mentioned parameters has been carried out on individual basis, with regard to the public sector banks and private sector banks, by computation of their respective mean scores, standard deviation, coefficient of variation and correlation (Table 1). The Z test has been employed to test the significance of coefficient of variation percentages. Three tables have been drawn up to facilitate the comparison (Tables 1, 2 and 3). The columns of coefficient of variation percentages have been tested for significance by conducting a normal test (Z test) as per the following formula:

CV1 CV2 ( CV12 / 2n1 ) ( CV22 / 2n 2 )

~ N ( 0,1)

Where CV is coefficient of variation, 1 and 2 are public and private sector banks and n1 and n2 are the respective sample sizes. At 5% level of significance in 2-tailed test, the table value is 1.96. The value of Z for each parameter has been calculated to find whether it is in the range (1.96) as indicated by Table 2.

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36

Table 1: Descriptive Statistics of Customer Perception Responses

Parameters Mean Score Mean Score (public sector (private banks) banks) Std. Dev. Std. Dev. Coefficient Coefficient (public (private of Variation of Variation sector banks) (public sector (private banks) banks)(%) banks)(%)

Sl. No.

1. Customer guidance/support 3.683 3.383 3.433 3.616 3.733 4.183 4.083 3.900 4.083 3.333 3.360 3.360 3.310 3.933 3.800 3.580 3.700 3.900 4.133 3.983 4.133 4.133 4.216 3.583 3.750 3.880 3.850 4.216 3.900 3.750 4.083 3.416 3.933 4.000 0.8530 1.0430 0.7890 0.6911 0.7561 0.7470 0.6450 0.7960 0.7870 0.9320 0.6620 0.7800 0.6240 0.8800 0.8190 0.8290 0.8290

3.660

3.966

0.7954

0.7804 0.8283 0.8994 0.7874 0.6560 0.8300 0.7700 0.7470 0.5350 0.6400 0.8880 0.9320 0.7830 0.8600 0.6660 0.7740 0.9850 0.8290

21.73 23.16 30.83 22.98 19.00 20.25 17.85 15.79 20.41 19.27 27.96 19.70 23.21 19.15 22.37 21.55 23.15 22.40

19.60 20.70 22.73 23.05 16.82 20.08 19.33 18.07 12.94 15.18 24.78 24.85 20.18 22.33 15.79 19.84 26.26 20.30

2. Politeness and hospitality

3. Handling of customer grievances

4. Method of imposing service charges

5. Return on deposits

6. Speed, promptness and accuracy in transactions

7. Safety of investments

8. Confidentiality of account and transactions

9. Variety of services offered

10. Goodwill and reputation of the bank

11. Infrastructure facilities like parking, cafeteria, ATM, etc.

12. Banks network and facilities to operate account from any part of the country/globe

13. Ambiance and dcor (interiors)

14. Mobile banking, e-banking, internet banking and other latest technologies

15. Convenience in operating account

16. Timings of the bank

17. Variety of income earning options

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18. Communication and providing prompt information

Table 2: Customer Perception Responses Estimation Results

Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Parameter Customer guidance/support Politeness and hospitality Handling of customer grievances Method of imposing service charges, fines, etc., Return on deposits Speed, promptness and accuracy in transactions Safety of investments Confidentiality of Account and transactions Variety of services offered Goodwill and reputation of the bank Infrastructure facilities like parking, cafeteria, ATM, etc., Banks network and facilities to operate account from any part of the country/globe Ambiance and dcor (interiors) Mobile banking, e-banking, internet banking and other latest technologies Convenience in operating account Timings of the bank Variety of income earning options Communication and providing prompt information Z Value 0.797 0.869 2.315* 0.023 0.941 0.065 0.616 1.043 3.395* 1.826 0.932 1.782 1.082 1.18 2.630* 0.640 0.974 0.760

Note: * Significant difference (above 1.96 table value) has been noticed in the case of following parameters; Handling of Customer Grievances Z value 2.315; Variety of Services Offered Z value 3.395; and Convenience in Operating Account Z value 2.630; In all other cases there is no significant difference between the two types of banks because it does exceed standard Z score of 1.96 at 5% level of significance.

Table 3: Customer Perception Responses Correlation Results

Sl. N o. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Parameter Customer guidance/support Politeness and hospitality Handling of customer grievances Method of imposing service charges, fines, etc., Return on deposits Speed, promptness and accuracy in transactions Safety of investments Confidentiality of account and transactions Variety of services offered Goodwill and reputation of the bank Infrastructure facilities like parking, cafeteria, ATM, etc., Banks Network and facilities to operate account from any part of the country/globe Ambiance and dcor (interiors) Mobile banking, e-banking, internet banking and other latest technologies Convenience in operating account Timings of the bank Variety of income earning options Communication and providing prompt information Correlation Spearman (Rho)* 0.839 0.855 0.854 0.984 0.797 0.777 0.862 0.851 0.830 0.908 0.892 0.797 0.795 0.751 0.848 0.927 0.834 0.823

Note: * Refer Annexure 2.

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Parameter-wise Analysis
1. Customer Guidance/Support: With regard to customer guidance and support, private sector banks are perceived to be better. This is evident from the fact that the mean scores of private sector banks are 3.966 and that of public sector banks are 3.660. The private sector banks seem to outperform the public sector banks by 30 basis points, which is significant. The standard deviation in the rating pattern regarding customer guidance and support being 0.79 (for public sector banks) and 0.78 (for private sector banks) does not seem to be divergent. This is further confirmed by the coefficient of variation, which is 21.73% and 19.6% respectively. There is a moderately high positive correlation in the customer perception pattern. 2. Politeness and Hospitality: The private sector banks, in the context of politeness and hospitality, have a higher mean score than that of public sector banks. The mean score of private sector banks is 4.00, whereas that of public sector banks is 3.68, with a difference of 32 basis points, indicating that politeness and hospitality of private sector banks seems better than that of public sector banks. The standard deviation regarding politeness and hospitality of 0.853 (for public sector banks) and 0.823 (for private banks) is slightly divergent. This is further stressed by the coefficient of variation which 23.16% (for public sector banks) and 20.7% (for private banks). There is a high degree of correlation in the customer perception pattern. 3. Handling of Customer Grievances: The private sector banks are perceived to be much better than public sector banks when it comes to handling of customer grievances, which has been highlighted by their respective mean scores. The mean score of private sector banks is 3.93 whereas that of public sector banks is 3.38, with a difference of 55 basis points, which is highly significant. The standard deviation in the rating pattern regarding handling of customer grievances is 1.043 (for public sector banks) and 0.899 (for private sector banks), which indicates a higher degree of divergence for public sector banks than that of private sector banks. This is further proved by the difference in the coefficient of variation, which is 30.83% (for public sector banks) and 22.73% (for private sector banks). At 5% level of significance in 2-tailed test the calculated value (using formula) of Z is 2.315 (exceeding the standard Z score table value of 1.96), indicating significant difference between the two types of banks. There seems to be a very high degree of correlation in terms of customer perception relating to handling of customer grievances of both the types of banks. 4. Method of Imposing Service Charges and Fines: With reference to the method of imposing service charges, fines and penalties, the public sector banks seem to score very marginally over the private sector banks. The mean scores for the public sector banks is 3.43 whereas for private sector banks it is 3.41, a minor difference of just 2 basis points. The standard deviation being 0.787 and 0.789, does not seem to be divergent. This has been further affirmed by the coefficient of variation, which is 22.98% (for public sector banks) and 23.05% (for private sector banks). There is almost a perfect correlation in the customer perception patterns. 5. Return on Deposits: With regard to return of deposits, the private sector banks are perceived to be better. This is evident from the fact that the mean score of private sector banks is 3.90, whereas that of public sector banks is 3.61. The private sector banks outperform by 29 basis points, which is significant. The standard deviation in the rating pattern for this parameter being 0.69 and 0.65, does not seem to be divergent. This has been emphasized by the coefficient of

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variation which is 19% and 16.82%. There is a moderately high positive correlation in the customer perception pattern. 6. Speed, Promptness and Accuracy in Transactions: There is a major difference in terms of the mean scores of public sector banks and private sector banks with regard to speed, promptness and accuracy in transactions. The private sector banks have a mean score of 4.13, while the public sector banks mean score is 3.73, the difference being 40 basis points. This indicates that the speed, promptness and accuracy in transactions is perceived to be better by customers of private sector banks in comparison to public sector banks. The standard deviation in the rating pattern regarding this parameter at 0.75 (for public sector banks) and 0.83 (for private sector banks) points out the slight divergence. The coefficient of variation is 20.25% (for public sector banks) and 20.08% (for private sector banks) emphasizing slight divergence. There is a very high degree of correlation in the customer perception pattern. 7. Safety of Investments: The public sector banks appear to provide better safety of investments in the context of the mean scores. The public sector banks have a mean score of 4.18 and the private sector banks have 3.98 as their mean score, with a difference of 20 points in favor of public sector banks. The standard deviation at 0.74 and 0.77 does not seem divergent in terms of scoring pattern, which is confirmed by the coefficient of variation of 17.85% (for public sector banks) and 19.33% (for private sector banks). There is a very high degree of correlation in the customer perception patterns. 8. Confidentiality of Account and Transactions: In terms of providing confidentiality of account and transactions there does not seem to be much difference between the public sector and private sector banks, as is evident from the mean scores of 4.08 (for public sector banks) and 4.13 (for private sector banks). There is a very slight difference of just 5 basis points between the mean scores in favor of private sector banks. The standard deviation in the rating pattern is 0.645 (for public sector banks) and 0.747 (for private sector banks), which shows that there is a slight divergence, affirmed by the coefficient of variation, which is 15.79% and 18.07%. There is a very high degree of correlation in the customer perception patterns. 9. Variety of Services Offered: The private sector banks are perceived to be better than public sector banks in terms of variety of services offered. This is indicated by the mean scores of 4.133 (for private sector banks) and 3.90 (for public sector banks). The private sector banks seem to have an edge over the public sector banks, with 23 basis point difference in their favor. The standard deviation in the rating pattern regarding variety of services is 0.796 (for public sector banks) and 0.535 (for private sector banks) showing a high degree of divergence. This has been further proved by the difference in terms of the coefficient of variation of 20.41% (for public sector banks) and 12.94% (for private sector banks). At 5% level of significance in the 2-tailed test, the calculated value (using formula) of Z is 3.395 (exceeding standard Z score table value 1.96) indicating significant difference between the two types of banks. There seems to be high degree of correlation in the customer perception patterns. 10. Goodwill and Reputation of the Bank: The private sector banks score over the public sector banks with regard to this parameter. The mean scores of 4.216 (for private sector banks) and 4.083 (for public sector banks), reveal that the goodwill and reputation of private sector banks as perceived by their customers is slightly better when compared to the public sector banks.

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The standard deviation of 0.787 (for public sector banks) and 0.640 (for private sector banks) shows slight divergence. This is confirmed by the coefficient of variation, which is 19.27% (for public sector banks) and 15.18% (for private sector banks). There is a very high degree of correlation in the customer perception patterns. 11. Infrastructure Facilities like Parking, Cafeteria, ATM, etc.: With regard to infrastructure facilities, the private sector banks are perceived to be slightly better. This is evident from the fact that the mean score of private sector banks is 3.583 and that of public sector banks is 3.333. The private sector banks outdo the public sector banks by 25 basis points, regarding this parameter. The standard deviation in the rating pattern is 0.932 (for public sector banks) and 0.888 (for private sector banks), indicating slight divergence, which is affirmed by the coefficient of variation at 27.96% (for public sector banks) and 24.78% (for private sector banks). There is a very high degree of correlation in the customer perception patterns. 12. Banks Network and Facilities to Operate Account from Any Part of the Country/ Globe: The private sector banks mean score regarding this parameter is 3.75 whereas that of the public sector banks is 3.36. There is a difference of 39 basis points, which is significant. Even though the public sector banks have a wide network of branches, the private sector banks seem to be regarded highly by their customers with respect to this parameter, in comparison to public sector banks. The standard deviation with reference to rating pattern is 0.662 (for public sector banks) and 0.932 (for private sector banks) indicating a high degree of divergence. This has been further emphasized by the coefficient of variation at 19.70% (for public sector banks) and 24.85% (for private sector banks). There is a very high degree of correlation in the customer perception patterns. 13. Ambiance and Dcor (interiors): In terms of this parameter, private sector banks are perceived to be much better than the public sector banks. This has been highlighted by the respective mean scores of 3.36 (for public sector banks) and 3.88 (for private sector banks) with a difference of 52 basis points, which is significant. The standard deviation at 0.780 (for public sector banks) and 0.783 (for private sector banks) does not seem much divergent, further affirmed by the coefficient of variation at 23.21% (for public sector banks) and 20.18% (for private sector banks). There is moderately high positive correlation in the customer perception pattern. 14. Mobile Banking, e-Banking, Internet Banking and Other Latest Technologies: The private sector banks are perceived to be better than the public sector banks in the use of these latest technologies. The mean scores are 3.31 (for public sector banks) and 3.85 (for private sector banks). There is a difference of 54 basis points, which is significant. The standard deviation at 0.624 (for public sector banks) and 0.860 (for public sector banks) indicates slight divergence. This has been emphasized by the coefficient of variation at 19.15% (for public sector banks) and 22.33% (for private sector banks). There is a moderately high positive correlation in the customer perception patterns. 15. Convenience in Operating Account: Regarding this parameter, the private sector banks have an edge over the public sector banks, which is reflected by the mean scores of 3.933 (for public sector banks) and 4.216 (for private sector banks) with a difference of 27 basis points which is significant. The standard deviation is 0.880 (for public sector banks) and 0.666 (for private sector banks) indicating a high degree of divergence in the case of public sector banks. This has been

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further proved by the coefficient of variation at 22.37% for public sector banks and 15.79% for private sector banks. At 5% level of significance in the 2-tailed test the calculated value (using formula) of Z is 2.630 (exceeding the standard Z score table value of 1.96) indicating significant difference between the two types of banks. There is a very high degree of correlation in the customer perception patterns. 16. Timings of the Bank: In the context of this parameter there does not seem to be any significant difference between the public sector and private sector banks. The mean scores are 3.80 (for public sector banks) and 3.90 (for private sector banks) with just 10 basis point difference. The standard deviation at 0.819 (for public sector banks) and 0.774 (for private sector banks) indicates slight divergence, which has been confirmed by the coefficient of variation at 21.55% (for public sector banks) and 19.84 (for private sector banks). There is almost perfect positive correlation in the customer perception patterns. 17. Variety of Income Earning Options: The private sector banks are slightly better perceived regarding this parameter as highlighted by the mean scores of 3.58 (for public sector banks) and 3.75 (for private sector banks). There is a difference of 17 basis points indicating the slight difference. The standard deviation is 0.829 (for public sector banks) and 0.985 (for private sector banks) indicating slight divergence, which is proved by the coefficient of variation at 23.15% (for public sector banks) and 26.26% (for private sector banks). There is a very high degree of correlation in the customer perception patterns. 18. Communication and Providing Prompt Information: In terms of this parameter the private sector banks are perceived to be better than the public sector banks. The mean scores are 3.700 (for public sector banks) and 4.083 (for private sector banks). The private sector banks outperform the public sector banks by a difference of 38 basis points, which is significant. The standard deviation in the rating pattern regarding this parameter is 0.829 and 0.829 which is almost the same, indicating no divergence. There is a high degree of correlation in terms of the scoring patterns.

Perception
The above parameter-wise analysis indicates that though the customers perception is positive for both public and private sector banks, comparatively private sector banks score over the public sector banks in all parameters, except for the safety of investments and method of imposing service charges by banks. Some of the areas where significant difference in the mean scores between the two types of banks were observed specifically are the following parameters: handling of customer grievances, mobile banking and use of latest technologies, ambiance and dcor, speed and accuracy, return on deposits, banks network, communication and providing prompt information, infrastructure facilities, and customer guidance/support. The perception levels with regard to the above-mentioned parameters indicate the areas where the public sector banks need to consciously improve and take corrective steps in order to bridge the gap in customer perception levels, which exists in comparison with private sector banks. Significant difference has been observed in the standard deviation and coefficient of variation in the rating pattern between the two types of banks, particularly for the parametershandling of customer grievances, variety of services offered and convenience in operating account. This indicates high

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divergence in customer responses for these three parameters of public sector banks. Because of the wide variation of responses, the public sector banks need to address these areas in the context of customer requirements. The public sector banks were perceived to be better than private sector banks with respect to the following parameters: method of imposing service charges and safety of investments. There was a very marginal difference in the mean scores. The private sector banks need to attend to these two aspects of customer services. There was also a high degree of divergence in terms of the standard deviation and coefficient of variation noticed with regard to the parameterbanks network and facilities to operate account from any part of the country/globefor private sector banks, though the mean score was much higher than that of public sector banks. This can also be another area which private sector needs to introspect and deal with to meet customer requirements. The calculation of correlation was to understand whether the perception was the same across public and private sector banks. The testing of correlation (refer Annexure) using Probable Error* (PE) indicates that the correlation coefficient is accepted and the results can confidently be interpreted. Accordingly, there was, out of the 18 parameters, a moderately positive correlation for five parameters, very high degree of correlation for 11 parameters and almost perfect positive correlation for two parameters. This indicates that though the user perception for these two banking sectors is similar for the majority of parameters, there exists a certain gap.

Conclusion
As per this study, both public sector and private sector banks appear to be providing services to the satisfaction of customers. The areas of strength, identified in the case of public sector banks, are: (a) safety of investment; (b) confidentiality of transactions; and (c) goodwill. The areas of concern where improvements would be required, applies to the parameters, i.e., (a) mobile banking, e-banking, internet banking and use of latest technologies; (b) network and physical facilities to operate account from any part of the country/globe; (c) infrastructure facilities like parking, cafeteria, ATM, etc.; (d) handling of customer grievances; and (e) ambience and dcor. With regard to the private sector banks the areas of strengths are: (a) politeness and hospitality; (b) speed accuracy and promptness; (c) confidentiality of account and transactions; (d) variety of services offered; (e) goodwill; and (f) communication and providing prompt information. The areas which are to be addressed and improved would be with reference to: (a) imposing of services charges, fines and penalties; and (b) improving the infrastructure facilities like parking, cafeteria, ATM, etc., (though it appears comparatively better than public sector banks). The areas of strengths and weaknesses of both these banks have been identified based on the mean scores. The study indicates that though there is a positive perception for both the sectors, public sector banks have to make a conscious effort to meet the customer needs and requirements in the wake of competition and ever-increasing expectations of customers. The change in nature, structure and conduct of competition pressurize the public sector banks to change their attitude towards the market and market-related issues. It is high time that they concentrated on customization of products, rather than simply marketing. This creates positive user perception and perhaps is the only way to meet the challenge posed by the private sector banks. H
* PE Estimate is appended as Annexure 1.

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Bibliography
1. Andrade Chitra (2004), Banking Products and Services, 1st Edition, M/s. Taxmann Publications Pvt. Ltd. 2. Gilmore Audrey (2003), Services Marketing and Management, Response Books. 3. http://www.etretailbiz.com/July_2006/cs02.htm 4. Koushik (2005), The Influence of Customer Perceived Service Quality on Customers Behavioral Intentions, IIM Calcutta, Abstract, http://www.iimcal.ac.in/programs/fpm/ThesisAbstracts/ koushiki2005.pdf 5. Sen Anindya and Chakrabarty Sujit K (2001), Retail Banking Channel Management: Operational Efficiency of Direct Selling Agents, Management and Change, Vol. 5, No. 1, January-June. 6. Shekhar K C and Shekhar Lekshmy (2005), Banking Theory and Practice, (19th Edition), Vikas Publishing House. 7. Shilpa Surendra (2005), CRM in Banking, IMZine - article, IIM Calcutta. 8. Tahir Izah Mohd and Wan Ismail Wan Zulqurnain (2005), Service Quality in the Financial Services Industry in Malaysia: The Case of Islamic Banks and Insurance, International Review of Business Research Papers, Vol. 1, No. 2, pp. 10-21. 9. Varughese A G (2005), Retail Banking in India: A Paradigm Shift, Professional Banker, ICFAI University Press, April.

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Annexure 1
1. PE Formula for Probable Error (PE) 0.6745 (1 r 2 ) n

Where r is correlation coefficient, n is number of pairs of observations. For testing of correlation 6PE should not be greater than correlation coefficient.
Sl. No. 1. Customer guidance/support 2. Politeness and hospitality 3. Handling of customer grievances 4. Method of imposing service charges, fines, etc., 5. Return on deposits 6. Speed, promptness and accuracy in transactions 7. Safety of investments 8. Confidentiality of account and transactions 9. Variety of services offered 10. Goodwill and reputation of the bank 11. Infrastructure facilities like parking, cafeteria, ATM, etc., 12. Banks network and facilities to operate account from any part of the country/globe 13. Ambiance and dcor (interiors) 14. Mobile banking, e-banking, internet banking and other latest technologies 15. Convenience in operating account 16. Timings of the bank 17. Variety of income earning options 18. Communication and providing prompt information 0.0258 0.0234 0.0235 0.0012 0.0471 0.0345 0.0222 0.0240 0.0270 0.0153 0.0263 0.0317 0.0320 0.0379 0.0244 0.0122 0.0265 0.0281 Parameter PE

The testing of correlation for the above parameters indicates that 6PE is not greater than the correlation coefficient and therefore correlation coefficient is accepted.

2. Formula for Spearman Correlation rs 1 6( D 2 ) N ( N 2 1)

D refers to the difference between a subjects ranks on the two variables, and N is the number of pairs of observations.

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Annexure 2
Questionnaire
(This survey has been carried out purely for academic purpose, we request you to be as frank as possible. The information provided by you will be kept confidential.) Kindly rate the following with regard to the services provided by your bank. 1. Customer guidance/support (advisory services, clarification of customers doubts) Excellent Very Good Average Bad Very Bad 2. The politeness and hospitality Excellent Excellent Excellent 5. The returns on deposits Excellent Excellent 7. Safety of investments Excellent Excellent 9. Variety of services offered Excellent Excellent Excellent Excellent Excellent Very Good Very Good Very Good Very Good Very Good Average Average Average Average Average Bad Bad Bad Bad Bad Very Bad Very Bad Very Bad Very Bad Very Bad 10. Goodwill and reputation of the bank 11. The Infrastructure facilities like parking, cafeteria, ATM, etc., 12. Banks network and facilities to operate account from any part of the country/globe 13. Ambiance and dcor (interiors) 14. Mobile banking, e-banking, Internet banking and other latest technologies (Contd...) Very Good Very Good Average Average Bad Bad Very Bad Very Bad 8. Confidentiality of account and transactions Very Good Very Good Average Average Bad Bad Very Bad Very Bad Very Good Very Good Very Good Average Average Average Bad Bad Bad Very Bad Very Bad Very Bad

3. Handling of customer grievances (complaints) 4. Method of imposing service charges, fines and penalties

6. Speed, promptness and accuracy in transactions

User Perception of Retail Banking Services: A Comparative Study of Public and Private Sector Banks

45

Annexure 2
Questionnaire
Excellent Excellent 16.Timings of the bank Excellent Excellent Very Good Very Good Average Average Bad Bad Very Good Very Good Average Average Bad Bad

(...contd)

Very Bad Very Bad Very Bad Very Bad

15. Convenience in operating the account

17. Variety of income earning options 18. Communication and providing prompt information (regarding customers account, settlement of dues, availability of new services, etc.,) Excellent Very Good ******** Average Bad Very Bad

Thanks for your kind cooperation

Name of the Bank : Branch Type of Account : :

Reference # 10J-2008-05-02-01

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The Icfai Journal of Bank Management, Vol. VII, No. 2, 2008