International Journal of Business Management & Research (IJBMR) ISSN 2249-6920 Vol 2 Issue 2 June 2012 24-35 TJPRC

C Pvt. Ltd.,

CONSUMER PERCEPTION ON SERVICE STANDARDS AT NATIONALIZED BANKS

1

G. SIVARAMAKRISHNAN & 2 S. PRATHEEP

Professor, Karpagam College of Engineering, Coimbatore-641 032

2

Research Scholar, Karpagam University, Coimbatore-641 021

ABSTRACT
The customer perception plays a prominent role in the Banking sector. The Bankers offer a very excellent service to its customers to extract and maintain the delight among its customers by offering a wide range of wonderful services such as retail banking, Corporate Banking, Exim Banking Services, etc., The customer is considered to the king in Banking Sector. Here this study realizes the consumer perception on various parameters by taking into the service standards offered by the nationalized banks. Each and every services offered by the banks are reviewed so as to retain the existing customers and to build customer loyalty, Customer Relationship Management should be given more importance along with excellent online platform with 24*7 Banking Support. KEYWORDS : Consumer Care ,Banks, Service Standards.

INTRODUCTION
India has a well developed banking system. Most of the banks in India were founded by Indian entrepreneurs and visionaries in the pre-independence era to provide financial assistance to traders, agriculturists and budding Indian industrialists. Indian banks have played a significant role in the development of Indian economy by inculcating the habit of saving in Indians and by lending finance to Indian industry. The commercial banking structure in India consists of: Scheduled Commercial Banks and Unscheduled Banks. Scheduled commercial Banks constitute those banks, which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI includes only those banks in this schedule, which satisfy the criteria laid down vide section 42 (6) (a) of the Act. Indian banks can be broadly classified into nationalized Banks/public sector banks, private banks and foreign banks.

NATIONALISED BANKS IN INDIA

Banking System in India is dominated by nationalized banks. The Nationalization of banks in India took place in 1969 under the stewardship of Mrs. Indira Gandhi the then prime minister.

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Consumer Perception on Service Standards at Nationalized Banks

The major objective behind Nationalization was to spread banking infrastructure in rural areas and make available cheap finance to Indian farmers. Fourteen banks were nationalized in 1969. State Bank of India (SBI) was the only public sector bank in India. SBI was nationalized in 1955 under the SBI Act of 1955. The second phase of Nationalization of Indian banks took place in the year 1980. Seven more banks were nationalized with deposits over 200 crores. LIST OF PUBLIC SECTOR BANKS IN INDIA IS AS FOLLOWS Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab and Sind Bank Punjab National Bank State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of India (SBI) State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of Travancore

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Syndicate Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank

BANKING SERVICES
The Banks activity includes Lending and Borrowing of Money to and from customers. The customer has come to realize somewhat belatedly that he is the king. The customers choice of one entity over another as his principal bank is determined by considerations of service quality rather than any other factor. He wants competitive loan rates but at the same time also wants his loan or credit card application processed in double quick time. He insists that he be promptly informed of changes in deposit rates and service charges and he bristles with customary rage if his bank is slow to redress any grievance he may have. He cherishes the convenience of impersonal net banking but during his occasional visits to the branch he also wants the comfort of personalized human interactions and facilities that make his banking experience pleasurable. In short he wants financial house that will more than just clear his cheque and updates his passbook: he wants a bank that cares and provides great services.

WHAT IS RETAIL BANKING?

Retail banking is, however, quite broad in nature - it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit cards, or depository services. Todays retail banking sector is characterized by three basic characteristics: multiple products (deposits, credit cards, insurance, investments and securities); multiple channels of distribution (branch, internet); and multiple customer groups (consumer, small business, and corporate).

Drivers of banking business in India Some of the basic reasons which led to the retail banking growth are as follows: First, economic prosperity and the consequent increase in purchasing power have given a fillip to a consumer boom. During the 10 years after 1992, India's economy grew at an average rate of 6.8 percent and continues to grow at almost the same rate not many countries in the world match this performance.

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Consumer Perception on Service Standards at Nationalized Banks

Second, changing consumer demographics indicate vast potential for growth in consumption both qualitatively and quantitatively. India is one of the countries having highest proportion (70%) of the population below 35 years of age (young population). The BRIC report of the Goldman-Sachs, which predicted a bright future for Brazil, Russia, India

SERVICES OFFERED BY BANKS

The services offered by Banks are Lending (Assets) and Borrowing (Liabilities), Liabilities Savings Bank A/C Current A/C Fixed Deposit Term Deposit Recurring Deposit Monthly Income Deposit Liquid Deposit Assets Two wheeler Loans Personal Loans Commercial Vehicles Loans Construction Equipment Loans Others (Mutual Fund and Insurance)

REVIEW OF LITERATURE
Hereby enclosed the reviews on the study which where made earlier by the researchers and challenges faced by the previous researcher, which will help in going in-depth to that studies. The related review about the topic under research is limited; an attempt was made to compile the views given by the various people relating to customer satisfaction on banks from various journals. Luiz Moutinho and Anne Smith1, in their research Introduced a model which posits a crucial role for the evaluation of bank customers attitudes towards both human tellers and automated banking in mediating the ease of banking factor/perceived satisfaction linkage. The models explicit consideration of the effects of bank customer attitudes towards human tellers and automation provides additional
1

Luiz Moutinho and Anne smith, Modelling bank customer satisfaction through mediation of attitudes towards human and automated banking, International journal of bank marketing, June, 2000, p.124-134.

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explanatory power regarding how the perceived trend towards ease of banking influences bank overall satisfaction, switching and loyalty behaviour. Josee Bloemer, Tom Brijs, Gilbert Swinnen and Koen Vanhoof 2, in their research studied about dissatisfied customers and measures for dissatisfaction management. They proposed data mining technique called characteristic rules to identify latently dissatisfied customers of a Belgian Bank. This study to provide scholars and business management with theoretical, methodological and managerial insights into identifying latently dissatisfied customers. Lia Patricio, Raymond P. Fisk and Joao Falcao e Cunha3, in their research presented the results of a qualitative study of a Portuguese bank regarding customer use of internet integrated in a multi-channel offering that includes high street branches, telephone banking and automatic teller machines. The results show that performance evaluation is a key factor influencing channel use. The study also indicate that, in a multi-channel context, customer satisfaction with internet services depends not only on the performance of this channel in isolation, but also on how it contributes to satisfaction with the overall service offering. Abdullah Aldlaigan and Francis Buttle4, in their research investigated the different types of attachment that customers develop towards retail banks. A statistically valid and reliable scale was introduced to measures the forms of attachment. This scale can be used to identify customer organizational attachment profiles that transcend or complement customer satisfaction and provide a basis for relationship longevity. Nelson Oly Ndubisi and chan Kok Wah5, in their research the results show that five key dimensions, namely: competence, communication, conflict handling, trust and relationship quality, discriminate between customers in terms of perceived relationship quality and customers satisfaction. Moreover bankcustomer relationship quality discriminates between satisfied customers and those who are not. This study adds value by unveiling the key antecedents of relationship quality and customer relationship management.

Josee Bloemer, Tom Brijs, Gilbert Swinnen and Koen Vanhoof, Identifying latently dissatisfied customers and measures for dissatisfaction management, international Journal of Bank marketing, Feb, 2002, p.27-37. Lia Patricio, Raymond P. Fisk and Joao Falcao e Cunha, Improving satisfaction with bank service offerings: measuring the contribution of each delivery channel, Managing service quality, Dec, 2003, p.471-482. Abdullah Aldlaigan and Francis Buttle, Beyond satisfaction: customers attachment to retail banks, international Journal of bank Marketing, June, 2005, p.349-359. Nelson Oly Ndubisi and chan Kok Wah, factorial and discriminate analyses of the underpinnings of relationship marketing and customer satisfaction, International Journal of bank marketing, 2005, p.542-557.

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Consumer Perception on Service Standards at Nationalized Banks

SCOPE
The research was under gone to review/identify the customer perception level on service standards offered by the Nationalized Banks. The study would enable the Nationalized Banks to know about the satisfaction level of the customers & also helps to improve their Services to make the Customer Delight. Various parameters were taken such as Counter Services, CRM, Online Statements, ATM Transactions Updates, Mobile Banking Services, Net Banking Services, Credit Card Services, etc.

OBJECTIVES
1. To study the perceptual level of the customers with respect to the services offered by the Nationalized Banks. i.e., to find whether there is any gap between the management perception and the customer perception with reference to the services offered in Retail Banking. 2. 3. To Improve the Service Standard To Improve the Employees Approach towards the Customers.

LIMITATIONS
1. 2. 3. The study is restricted to Coimbatore branches only. The study was conducted within a limited time period. The sample size for the customers has been limited to 200. Result may vary if the research was conducted in a large scale. 4. The survey purely based on opinion of customers, which may be biased at time.

RESEARCH METHODOLOGY
RESEARCH DESIGN Research design stands for advanced planning of methods to be adopted for advanced planning of methods to be adopted for collecting the relevant data and the techniques to be used in their analysis in view the objective of the research. The researcher has to describe the present situation in order to know the satisfaction of the customers. Hence descriptive research study is used and includes survey and fact finding enquirer. Descriptive research can only report what has happened and what is happening.

SAMPLING DESIGN
Population The sampling population of the study includes 1263 Customer for Five Nationalized Banks. Sample size A sample size of 200 customers of the branch was interviewed.

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Sampling Technique The sampling technique adopted for the study is convenience sampling. Field work The field work is the actual data collection process and the respondents are the customers of the Indian Overseas Bank, State Bank of India, Indian Bank, Syndicate Bank, Corporation Bank. The respondents were met and told about the objectives of the study and data were collected through questionnaire form. Data Collection Method The collection of data is considered to be one of the important aspects in the research methodology. There are two types of data that exists, one is primary data and the other is secondary data. Primary Data Structured questionnaire has been used for the collection of primary data from the respondents. It is for the purpose of study about the satisfaction of customers. Opinion survey method is followed to collect the primary data. Secondary Data It has been collected from the organization past records, organization websites, various magazines, journals and other related library books. Questionnaire design Structured questionnaire was used for this study. The types of questions used in the questionnaire were Open-ended questions Multiple-choice questions and Dichotomous questions

Tools for Analysis

The collected data was edited and then consolidated by using simple statistical tools. Then, it was presented in the form of tables and figures. The simplest statistical tools are employed for the analysis of data. The statistical tools employed are, Chi Square Analysis

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Consumer Perception on Service Standards at Nationalized Banks

Table 1 Analysis of Association between period of Customer with Bank and their Satisfaction Level Percentage of Satisfaction Level Moderately Satisfied HOW LONG YOU ARE BEING TRANSACTING WITH BANK 1 YEAR - 5 YEARS 5 YEARS 10 YEARS 10 YEARS & ABOVE Total 21 14 10 63 12 70 47 137 33 84 57 200 < 1 YEAR 18 8 26 Highly Satisfied Total 10-20%

Particulars

Null Hypothesis (H0)

: There is a relationship between Customers association with bank and their satisfaction level

Alternate Hypothesis (H1): There is no relationship Customers association with bank and their satisfaction level 2. Statistical Test 3. Level of Significance 4. Degrees of Freedom 5. Calculated Value2 6. Critical Value : Chi-Square Test : 0 .05 :3 : 7.815 : 31.635 at 5% Level of Significance

Since calculated value is less than the critical value Null Hypothesis is accepted i.e.., there exist a relationship between Customers association with bank and their satisfaction level. So the Customers are regular to the banks.

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Table.2 Analysis of Association between the Age of Customer and the their Transaction Percentage TRASACTION PERCENTAGE 10-20% AGE 20-30 YEARS 31-40 YEARS 41-50 YEARS 51-60 YEARS 61 YEARS & 8 13 4 13 16 54 21-30% 7 25 13 17 10 72 31% & ABOVE 13 19 16 12 14 74 28 57 33 42 40 200 Total

ABOVE Total

Hypothesis: Null Hypothesis (H0) Alternate Hypothesis (H1) Statistical Test 3. Level of Significance 4. Degrees of Freedom 5. Calculated Value2 6. Critical Value : There is no relationship between Age and Transactions percentage : There is a relationship between Age and Transactions percentage. : Chi-Square Test of Independence : 0 .05 :8 : 25.558 : 15.507 at 5% Level of Significance

Since calculated value is greater than the critical value Null Hypothesis is rejected and Alternate Hypothesis is accepted i.e.., There exists a relationship between Age of customer and their transaction percentage.

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Consumer Perception on Service Standards at Nationalized Banks

Table 3 : Analysis of Association between Monthly Transactions and Transaction Percentage TRANSACTION PERCENTAGE 10-20% MONTHLY PERCENTAGE 2.6-5 LAKHS ABOVE LAKHS Total 5 <2.5 LAKHS 47 52 5 104 > 21% 21 42 33 96 68 94 38 200 Total

1. Hypothesis: Null Hypothesis (H0) : There is no relationship between Monthly Transactions and Transaction Percentage. Alternate Hypothesis (H1) : There is a relationship between Monthly Transactions and Transaction Percentage. 2. Statistical Test 3. Level of Significance 4. Degrees of Freedom 5. Calculated Value2 6. Critical Value : Chi-Square Test : 0 .05 :2 : 3.143 : 5.991at 5% Level of Significance

Since calculated value is less than critical value Null hypothesis is accepted i.e., there exist no relationship between Monthly transactions by customers and their transaction percentage.

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FINDINGS, SUGGESTIONS & CONCULSION

FINDINGS Frequency Highly Satisfied ` 70 96 101 100 76 127 112

S.NO 1 2 3 4 5 6 7

Attribute Association with Bank for above 10 Years Courtesy level of the Banks Staff Banks Staff Knowledge in solving queries Fastness in attending the Customer Account Opening Product/Service Innovation Information of Deposit Rates & Service Charges Grievance Redressal

% 35 48 50.5 50 38 63.5 56

Remark Highly Satisfied With Bank Facility Rated Good for their Courtesy Level Rated Good Knowledge Level for their

Rated Good for their fastness in attending the customers. Customers found easy to open a account in Nationalized Bank Nationalized Bank has good product/service innovations Customers are much satisfied with the intimations. Customers are satisfied with respect to Grievance redress system. Customers are satisfied with Comfort level at Level Customers are satisfied with respect to ATM services Customers Satisfied are moderately

103

51.5

9 10 11 12

Comfort Facilities Quality Services of ATM Loan Mobile

151 84 86 78

75.5 42 43 39

Fastness in Processing Internet Facility &

Customers are satisfied in using the technological updates.

SUGGESTIONS
46% of the respondents felt that the interest rates on loan were high and hence the Interest rates may be reduced to attract more customers. Only 22.7% of the respondents having been invested in the third party products the bank can look for promoting the same. The bank also has a huge scope for this, with high income group NRI customers, in the area. Since a large number of the respondents are unaware of the services provided through internet (66%)/ mobile (56.7%) banking; initiatives, such as posting a list of services that are rendered to the customers inside the bank premises, demo of the services in the bank website; can be done

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Consumer Perception on Service Standards at Nationalized Banks

to make the customers aware, and use the services provided through ATM, internet and mobile banking of the bank. As the cross tabulation reveal, except one out of the few customers who have been associated with the bank for the past 15-13 years have not been receiving any privilege. It is therefore suggested to give privilege to its long term customers so as to retain them.

CONCLUSIONS
The gap analyzed can be minimized by better technology, customer service and also by creating awareness about the various services; thereby increasing the customer base so as to retain the existing customers and to build up customer loyalty, Customer Relationship Management should be given more importance along with excellent online platform with 24 * 7 Banking Support.

BIBLIOGRAPHY
1) Luiz Moutinho and Anne smith, Modelling bank customer satisfaction through mediation of attitudes towards human and automated banking, International journal of bank marketing, June, 2000, p.124-134. 2) Josee Bloemer, Tom Brijs, Gilbert Swinnen and Koen Vanhoof, Identifying latently dissatisfied customers and measures for dissatisfaction management, international Journal of Bank marketing, Feb, 2002, p.27-37. 3) Lia Patricio, Raymond P. Fisk and Joao Falcao e Cunha, Improving satisfaction with bank service offerings: measuring the contribution of each delivery channel, Managing service quality, Dec, 2003, p.471-482. 4) Abdullah Aldlaigan and Francis Buttle, Beyond satisfaction: customers attachment to retail banks, international Journal of bank Marketing, June, 2005, p.349-359. 5) Nelson Oly Ndubisi and chan Kok Wah, factorial and discriminate analyses of the underpinnings of relationship marketing and customer satisfaction, International Journal of bank marketing, 2005, p.542-557.