TABLE OF CONTENTS

Serial Table of contents Page

NO. no.
1. Introduction 2-41

2. Literature Review 42-52

3. Need for Research 51-60
4. Research Methodology 61-70

5. Analysis and Interpretation 71-86

6. Conclusion 87-91
7. Limitations 92-93
8. Recommendations 91
9. Bibliography 94
10. Questionnaires 96

1
Introduction

1.1 History of banking sector

Banking in India originated in the last decades of the 18th century,bank
of Hindustan was the first Indian bank that was established in 1770 .The
largest and oldest which is still going strong is state bank of India (S.B.I)
It originated by the name of bank of Calcutta in June 1806, but laterin
1809 it was renamed as the bank of Bengal There were three banks
namely bank of madras,bank of Bombay and bank of Bengal where
governed and funded by a presidency government Later this three banks
were amalgamated into one as imperial bank of India in 1921Which
became the state bank of India upon India independence in 1955Over the
past period of time this amalgamated bank acted as quasi central bank,
until the reserve bank of India was established in 1935 under the reserve
bank of India 1934As the era of development of banking sector
commended in 1960,the state bank of India was given the full control of
virtually 8 state associated bank which was under the state bank of
India(Subsidiary Bank)act,1959.These were known by the name of
associated bank In progressive world of development it was further
classified as in 1969 the Indian government nationalized 14 major
private bank later 6 more bank were nationalized in 1980 Indian banking
sector were chiefly categorized into schedule and non-schedule banks
The schedule were those which were included under the 2nd schedule of
the reserve bank of India, act 1934
The schedule banks were broadly classified into nationalized bank
namely regional rural banks, foreign banks, state bank of India and other
private banks During the period of British rule merchants established the
union bank of Calcutta in 1829 as being first private joint stock
association and later involved in partnership It comprises oftwo banks
holding together but which mutual contest its emerged as one bank

2
named union bank It had 2 agencies that was at Singapore and mirzapore
but somehow the bank got bankrupt and declared insolvent because of
fraud by the bank accountant The Allahabad bank has longest reputation
of survival as its still functioning from 1865 to the present data as it is
also treated as one of the oldest joint stock bank in India The oldest joint
stock bank of India belongs to the bank of upper India which was
established in 1863 and existed until 1913 the decline started as some
assets and liabilities’ were being transferred to alliance bank of Shimla
Later on foreign banks also started emerge because of rapid growth and
demand of more bank for fulfillment of needs Foreign banks marched
their existence from Calcutta in the 1860 Two foreign branches were
opened namely in Calcutta in 1860 and another in Mumbai in 1862 with
the name The Comptoir d’Escompte de Paris and later it got expanded to
Chennai and Pondicherry Calcutta was central point of banking hub
because of their trade port which were beneficial to British empire
especially for trading HSBC established itself in Bengal in 1869 Oudh
commercial bank was entirely the first Indian joint stock bank
established in 1881 in faizabad but it didn’t survive as it failed in 1958
another bank namely Punjab national bank was established in Lahore in
1894 which is successful till now and being treated as largest bank of
IndiaAround 20th century Indian economy was striving for stability and
growth It took around five decades to have improvement in
social,industrial and other infrastructure Indian had established most of
which served particular ethnic and religious communities The
presidency banks dominated the entire proceedings of Indian banking as
they played pivotal role but there were some other exchange banks and
number of Indian joint stocks banks All this banks operated in different
sector of the economy most of the exchanged banks were owned or held
by European concentrated on financing foreign trade Indian joint stock
banks lack maturity and experience to have any dominance or
competitive level with presidency and exchange banks As swadeshi
movement was at certain hike which inspired to establish more banks

3
between the period of 1906 and 1911 The swadeshi movement inspired
local businessman and political figures To joint hand to establish bank
for Indian community A number of banks established then have survived
to the present such as catholic Syrian bank, the south Indian bank,
corporation banks, and bank of Baroda, central bank of India, Canara
bank and bank of India The vitality of swadeshi movement led to the
establishment of many private banks in dakshina Kannada and udupi
district which were unified earlier and known as south canara Four
nationalized bank were also commenced in the district also a leading
private sector banks undivided dakshina kannada district is known as
cradle of Indian banking
After independence the government of India(GOI) adopted planned
economic development, a five year plans was introduced in 1951The
demand for nationalization of bank in raised voice especially by
congress party , socialist and communist parties because of this demand
the nationalization of reserve bank happened in 1949 with that banking
regulation act was passed and approved in the same year this was two
most important phase of banking sector the biggest reason of
nationalization that was given by P.M Smt Indira Gandhi was:
1. Availability of fund required for mandatory sector such as
agricultural, small and village industries for expansion further economic
development
2. To have check on the monopolist so that to ensure a smooth supply of
credit to socially desirable sections
3. Expansion of banking and establishment of more banks across the
country
4. In order to reach the mass for reducing regional imbalance especially
in rural areas were the bank facility were not available
5. To encourage new classes of entrepreneurs’

4
6. To provide adequate training as awell as reasonable term of service to
bank staff
7. To obtain large portion of profit of the banks as its revenue
8.To safeguard and promote the interest of depositors so that public
deposits large sum of money in bank
9. To minimize the control and power of big business house like director
so that illegal activities boarding and black-marketing can be eradicated
from the market
Government took major step in the Indian banking sector reform after
independence the imperial bank was transformed into state bank of India
in 1955
The prime minister of India nationalized 14 major commercial bank, the
step taken by the government of India to regulate banking institution in
the country
1.1949: Enactment of banking regulation act
2.1955: Nationalization of state bank of India
3.1959: Nationalization of SBI subsidiaries
4.1961: Insurance cover extended to deposit
5.1969: Nationalization of 14 major banks
6.1971: Creation of credit guarantee corporation
7.1975: Creation of regional rural banks
8.1980: Nationalization of 6 banks with deposit over 200 crores
After nationalization banks achieved extraordinary success in order to
attain the objective of nationalization, it brought tremendous change in
socioeconomic structure of the country, it bought or generated immense
confidence about the existence and sustainability of these institutions,
the deposit and advance jumped by 12000%
5
There was another phase of banking sector improvement took place
under the chairmanship of M Narisham in 1991 where more and more
product and facilities were introduced in the banking sector
Liberalization took place in this phase which allowed immense foreign
bank establishment and their ATM stations, phone banking and net
banking were introduced to provide more satisfactory service to
customers
The financial system of India has shown tremendous resilience with the
systematic and advanced business modelBut after independence India
central banking authority was established in April 1935 and was
nationalized on 1January 1949 under the term and formulation of the
reserve bank of India(Transfer to public ownership) act 1948(RBI
2005b) The banking regulation act was enacted in 1949 which
empowered the reserve bank of India to regulate, control and supervise
the bank of IndiaThe banking regulation act stated that no new branches
could be opened with the permission recommendation license from the
RBI and no two banks could have common directors In 1960 as the
chaste of development started increasing there was tremendous move
made in order to nationalize 14 largest commercial bank with effect
from the midnight of 19 July 1969The ordinance was passed (Banking
companies (Acquisition and transfer of undertaking ordinance 1969) the
decision was swift because there banks consist of 85 percent of bank
deposit in the country and government wanted maximum control over
the bank in order to facilitate the development of the Indian economy
with the decision nationalized bank growth increased at pace of 4
percent which is the average growth rate of the Indian economy Another
decision regarding the liberalization was being considered in order to
license small number of private bank in 1990
This move revitalized the banking sector of India which is increasing at
rapid rate with strong contribution from all the three sector of banks
namely private, government and foreign banks

6
STATE BANK OF INDIA
State Bank of India is one of the oldest and largest bank in the country it
is Indian multinational public sector banking and financial service
company It is under the control of government with headquarter in
Mumbai and Maharashtra State bank of India amalgated with five
associated bank state bank of Hyderabad,Mysore,Patiala,Jaipur and
Bikaner on 1april 2017 with this collaboration it enter into so global
banks with the balance sheet size of Rs 35 Trillion 2,80,000 Employees
25,000 branches ,60000 Atm and 450 million customers
SBI market increased upto 24 percent from 17 percent it currently has
2000 offices in 37 countries 30 correspondent in 72 countries The
companies is on 232 place on the fortune global out of 500 list of the
world and turn out to be biggest corporation in 2016 consist of 20%
market share in the field of loan and deposit among Indian commercial
bank The bank traces it legacy through imperial bank of India which was
established in 1806 of bank of Calcutta making him the oldest
commercial bank All three presidency banks amalgated into one to form
imperial bank of India which later become bank of India reserve bank
took 60% of possession the government of Indiacontrolled, managedand
owned imperial bank of IndiaSBI has enter into large network with
overseas including product concerned with nonresident(NRI)That why
state bank of India has turned as biggest player in the world market
1.2 Emerging trend in banking sector
The liberalization process started by the government has changed entire
system and functioning of various sector of the indian economy The
banking sector has been to the large extent benefited by the
implementation of advanced technology Productivity enhancement,
latest and advances products , speedy transactions of funds quick
information and increase in efficiency of risk management are certain
ley issue well developed by the latest technology Information

7
Technology has increase the efficiency and effectiveness of business
process across the banking sector Technological infrastructure has
become or played pivotal role in reform process in the banking system
with latest and well developed instrument and innovations in market
practices There was time around 2012-14 were the growth rate of
commercial bank fall down because of slippages in their assets quality
and profitability Bank credit lowered to 16.8% from 18% in 2012-14
However the growth rate tend to become stable during the world
financial crisis The key pattern of stability was that Indian banks
withstood the shock in the post crisis period with the help of loan
delinquency ratio, value creation , and track record of innovation During
2012-14 banks were slowly improving and developing with their
profitability and assets quality today role of banking industry is very
essential and one of the leading and effective service sector The present
banking scenario provide lot of opportunities with the global financial
crisis RBI and ministry of finance took several notable effort inorder to
tackle the problem by making certain changes in the policy such as
CRR,interest rate special offers to the customers such as to open account
in zero balance Due to liberalization banks started to operate on the basis
of consumerism which include flow to link customer and make them
remain attached with the bank because of this banks have entered in
non-banking product such as insurance where there is favorable
opportunities Digitization really helped the performances of banking
sector to improve In recent year of development private and public
sector banks have emphasis on offering new technology based services
to its customers like mobile banking and E-wallet the favorable aspect of
digital channeling in banking is its ability to provide new proposal and
preposition and customer specific business model by analyzing this
banking pattern which explores the customer value to the maximum
certainly with various approach and innovation the world into
digitization which has completely changed the rule and regulation of
traditional banking service in India OMNI channel approach is one of

8
them which has taken banking to certain professional hike Omni channel
is a multichannel approach to the customer service where each and every
channel are bonded or tightly integrated together as the central medium
of integration is customer As customer continue to vary their pre-
favorable usage patterns so the banks and credit farms concentrate on
serving a seamless customer experience across various touch points So
Omni channel take diligences effort by gaining insight or complete
information regarding customer channel,preference and behavior with
the specific advancement in the process as mentioned above has
certainly played a vital role in economic growth and development with
their sophisticated services to the customer with the continuous product
and process innovations
This are emerging trends in Indian banking system
1. Automatic Teller Machine (ATM): Automatic teller machine is the
most popular device in India which allow the customer to withdraw their
money anytime whenever they want it allow customer to perform their
regular transaction without interacting with a human teller.
ATM provide other information and facility such as funds transfer
between accounts, deposits of cheque and cash in accounts balance
enquiry and payment of utility bills
2. Electronic clearing service (E.C.S): It is a retail payment systems that
can be utilized to make prompt massive payment/receipts of particularly
similar nature where each individual payment is of repetitive nature and
relatively smaller amount This facility are primarily used by companies
and government departments to make/receive large volume of payment
rather than for funds transfer by individuals
3. Electronic funds transfer (E.F.T): It is a system where payment can be
made by anyone like person/company to other he can approach his bank
and make cash payment or give instructions/authorization to transfer

9
funds directly from his own account to the bank accounts of the
receiver/beneficiary
Complete detail regarding bank account holder number, receiver, name
account type(saving or current account) bank name and branch has to be
given at the time of requesting for such transfer so that the amount
reaches the beneficence’s account correctly and faster RBI are the
service provider of Electronic fund transfer
4. Real time gross settlement (R.T.G.S):The system was introduces in
India since March 2004, it is a system through electronic instructions
that can be given by banks to transfer the fund from their own account to
another bank
The RTGS are managed and controlled by RBI it provide certain and
proper medium through which the fund are being transferred efficiently
and fastly processed, the process take place on real time basis
5. Point of terminal: It is basically a computer terminal that link online
information’s of customer in a bank and contain magnetically encoded
plastic transaction card that recognize the customer to the
computer,during a transaction process the customer account is debited
and retail account is credited by the computer for the amount of
purchase
6. Tele-Banking: It facilitates the customer to process non-cash related
banking on telephone for single quarries and transaction automatic voice
recorder are being used
7. Electronic data interchange (E.D.I): It is electronic exchange of
business documents like invoices, receiving advices, purchase order,
shipping notices, it is basically used for transformation and exchange of
financial information and payment in electronic form
8. Electronic payment services: E-cheques it is the latest technology
developed in US which replace the old pattern of paper cheque

10
It act as negotiable instrument which include Truncated cheque and e-
cheque instrument, it is very similar to e-mail, e-commerce, e-tail, and e-
governance The banking sector is now enter into new wave of evolution
with innovation in the fin etch space with proliferation of prepaid wallet
industry banking has reflected tremendous resilience and sustainability
during the period of development Indian banking system is moving
forward with brick space by offering sophisticated services to the
customers with the continuous product and process innovation Bank
shall always contribute intensive efforts to render best service to their
customer finally banking sector need new and innovative business model
for further growth and satisfaction of customer services

1.3 Foreign bank in India

Foreign banks are those banks whose branch office is in India but they
are incorporated outside India and their head office in a foreign
country,Reserve bank of India allowed foreign bank to establish their
branches in India with certain rules and regulation that is formulated by
the RBI. The foreign bank were starting to establish their subsidiaries
from 2002,the basic rule led by RBI in establishing their subsidiary in
India was they must have 25 million us dollar in minimum three
branches and having a sound and enable financial position and condition
in the market, the first and second must have 10 million us dollar each
and the last one must have 5 million us dollar The reason behind foreign
bank establishment in India was GDP of India was increasing at 7% over
the next few year giving the opportunity to increase their profit
level,there has been tremendous increase in credit of bank that was upto
25% to 27% in the year 2005-06 and it was expected that growth would
certainly increase in few year from now so with the growth rate
increasing in Indian economy it has given favorable opportunity to

11
expand their business in financing trade small and medium sector in
small towns foreign banks have played an important role in the Indian
economy especially in the priority sector Globalization has certainly
being an dominated force in order to search for new market ,new
customer to expand their business with the presence of this it has lead lot
of technical development and their services are being exceptional and
impressive, it has certainly raised the competitive level among the
domestic bank, in order to introduce new idea of service that no other
banks possessed, but basically customer satisfaction was given high
priority by both of bank foreign or domestic
Now there are at least 44 foreign bank from 21 different countries
operating successfully in India, the business is being conducted with
more than 211 branches and they wide spread in all cities including the
union territories ,this has made imperative to bank to provide optimum
product and services Today banks have strong database of customers of
customers their profile, needs, requirement ,cash position and location
furthermore bank have lead down strong research house and market
intelligence units In order to face the future challenges of competition
especially customer retention the entire system have become more
convenient and swift.

1.4 Rural banking

Rural sector occupies an important place in the Indian economy
system,as the statistic information show arelevant data that as
three out of every four Indian live in rural areas and five out of
every six persons living in rural areas are completely dependent
upon the agriculture as the main source of income. Rural
banking in India started with the establishment of banking sector
in India commercial bank and regional rural banks are wide

12
spread in the entire region of the country and providing a
helping hand in the growth process of the rural sector in the
country
The structure and establishment of regional rural banks (RRB)
was initiated in 1975 under the provision of the ordinance on 26-
9-1975 The issued capital are shared in proportion of 50%,35%
and 15% respectively out of which maximum share are being
held by central government ,state government and sponsor bank
India has succeeded in developing the largest rural banking
system in the world, the most prominent measures that was
taken to increase the effectiveness role in the development of
country side were:
First the consolidation programmes of primary agricultural
cooperative credit societies (PACS) Secondly Formulation of
advanced development programmes and executing plan
This Factor converted or transformed class banking into mass
banking and facility the flow of bank credit to rural sector Rural
banking has certainly played an important role in development
of rural areas and especially agricultural sector, with the
adoption of new farm techniques and technologies that was
provided by financial institution simply helped in increasing the
agricultural production The cooperative movement was the first
officially established in 1904 for provision and providing credit
facility for agricultural sector NABARD(national bank for
agricultural and rural development) has played phenomenal in
shaping the rural development in India, the basic service and
facility provided was related to promotion and development of

13
agricultural cottage and village industries NABARD has provide
tremendous opportunity for to women in rural area by lending to
self-help group (SHG),in March 2009 about 68 crore member
has been linked to credit through this programmes NABARD
was also involved in natural resources management programmes
involved diverse fields like watershed development ,tribal
development and farm , innovation through this programmes
with adequate fund, thatwhy there is complete progression in
rural area with more and more branches are being established
1.5 Public and private sector bank
The public sector in the banking industry emerged with the
nationalization of imperial bank of India(1921) and creating the
state bank of India in 1955 as a part of integrated scheme of
rural credit proposed by the all Indian rural credit survey
committee(1951).The bank is different from various aspect and
it enjoy the supremacy power as being the agent of reserve bank
of India ,It is the largest bank in India with international
presence having the network od so overseas office and is
worldwide across 30 country covering almost every time zone
The public sector in the Indian banking expanded at very fast
speed with two major round of nationalization first was in 1969
with 14 major round in private banking sector having deposit
around 50 crore and in 1980, 6 more banks with deposits of not
less than 2 crores each public sector banking had 76.88 market
share in the deposit sector 74.82 market share in the assets sector
at the end of march 2003.The advancement after two more
nationalization continue there was and joint venture took place
between New bank of India with Punjab national banking
14
1993The number got increased up to 19. Nationalized bank and
public sector bank was 27 in the number thus public sector bank
dominated the entire banking sector in India. Public sector banks
are those banks where the maximum holding is under the control
of the government there are categorized under two group
nationalized banks and state bank of India with their associates
among them there are 19 nationalized banks and 8 states bank of
India with their associate, public sector bankshas dominated in
deposits sector od 75% and 71% of advances in the Indian
banking industry
There are further classified into
1. State bank group
2. Nationalized banks
3 Regional rural banks
The public sector banks perform following functions
Accepting deposit, giving loans on overdrafts, discounting of
bills of exchange, agency function and investment of funds.
Public sector has played important role in developing the basic
infrastructure of the country especially in the rural areas it has
emphasis on the basic needs of the general mass living below
the standard, education was basis priority to remove illiteracy
from the country it has made major contribution in education
sector especially at the ground level with number of school and
university opened, Health service is being improved with lot of
dispensaries and government hospital being opened with free
medicine and medical camp, Expenditure on water and

15
electricity which include power station electrical installation
sewerage and drainage facility so public sector banks has played
vital role with various reform, nationalization and liberalization
took place from the historical days of the establishment

Private sector Banks

Private sector banks are for profit businesses that have no
control of the government private sector bank are divided into
groups by financial regulators of India that is old and new two
The old private banks that existed prior or before to the
nationalization in 1969 and had kept their independence because
they were too small or didn’t had that capability to be included
in nationalism the new private sector banks are those that have
gain their banking license since the liberalization took place in
the 1990 basically there are 4 types of private sector banks
1. Old generation private banks
2. New generation private banks
3. Foreign banks operate in India
4. Co-operative banks
Private banks banks play an essential role in the Indian
economy, they have introduce high degree of professional
management and marketing concept in banking it has literally
assisted the public sector banks as well to develop and accept
the latest technology innovative idea and skills

16
Private sector banks created a healthy competition in the
banking system, the private sector banks encouraged and allow
foreign money in the country and spreading the money with
systematic flow that why so many foreign banks have much
influence on the foreign investment in the country The private
sector banks help in assisting or meeting the financial
requirement for Indian companies and for the government
agencies in international capital market, private bank emphasis
much more of innovative product or new systematic process in
the banking sector especially like schemes and services,they act
as king pin of the financial system of the country they help in
imparting valuable services Although it is not necessary for an
private sector banking to play significant role in economy of a
given nation but still a huge sums or large portion of the money
that moves through a particular economy.Private sector banking
always support the mechanism provider to the free enterprise
system with other economies,which allow one private bank to
coordinate and work together with other bank with harmony
which allow it to get easy funding for expansion of project,
launching of stock offering and other essential activities that are
beneficial to bank and companies well as consumer in general
Difference between private and public sector bank in term of
customer satisfaction
A public sector banks is a bank in which majority part of stake
or equity is held by the government whereas private sector banks
are those in which greater portion of stake or equity are in hand
of private shareholder or individual. A public sector bank is a
bank that is operated through institutions owned by the people
17
through their representatives government, in this banks
government control and manage the affair as per as instruction,
rules and regulation established. A public sector bank can
provide assistance and help to the state and local government in
difficult situation especially regarding the funds or capital. A
public sector bank model has been developed for the benefit and
welfare of the people, a nationalized bank is being formed by
taking a bank and its assets into the public ownership. The
national government of the country holds the ownership of
nationalized bank Private sector banks are owned by the private
lender or individual the private bank are managed and controlled
by the private body are free to operate according to the market
forces The interest rate of private sector is being on high as
compared with the public banking sector Private banks are
looked as global organization who manages the vast resources
and covering more ground than public sector bank They are
known for providing better customer services and various
investment opportunities shareholder of the private banks
generally give high priority to short term profit as compared
with public sector bank who emphasis on long term profit. The
private banks believe in innovation and advanced technology in
the banking sector,fast and swift business processing is basic
key to the success of private sector banking Various new
product and services are being introduced by the private bank
according to the needs and expectations of the customer whereas
public sector bank emphasis on the basic needs without
changing much policy so easily, the basic aim of public sector is
to take basic service to reach out to the mass or all section of the
society
18
The private sector bank work on profit maximization whereas
public sector bank work for benefit of the society
Both public and private sector are striving very hard to win the
customer with varieties of innovative services, though private
sector banks are comparatively having less experience in Indian
market but they are able to quickly access situation and getting
better understanding of Indian customers. Public sector have re-
innovated and reinvented their marketing approach and giving
them tough competition to private sector bank, but recently
private bank have setup strong rapport with the customers by
facilitating more and better facility to their customers, that why
they have successfully retaining their old customer heavy
branding and advertisement related to their product have been
carried on by the private sector bank which have attracted and
satisfy their needs Certainly the credibilityof private sector
banks have increased simply the effective management and
transaction process are very shift and fast which has allowed
private sector bank to fulfill the need and expectation of the
customer, It can be certainly seen by the growth of private bank
in India just through the balance sheet which show productive
and profitable business in future banking sector, the network of
banks has certainly been increased with the enlarge coverage of
geographical area in the potential market which certainly lead to
growth

19
1.6 Dimension of service quality in the Indian retail banking
with service quality development
Service industries are playing crucial role in the economy of
many nation in India more than 50% of Indian GDP come from
the service sector, in such a cut throat competition providing
satisfactory quality service is a crucial factor for the success of
any organization who are engaged in providing service. Service
quality helps in increasing profitability, customer satisfaction
and an important factor for giving competitive advantage, it has
connection with repeat sales, work of mouth feedback, and over
all maximization of profits. Betterment of service help in
increasing market share, cost reduction, increase in profit and
ROI. Services quality is comparison of expectation and
performances service quality is an assessment of how well you
delivered service with relation to customer expectations,
organization especially always assess their service quality in
order to improve their services to easily identify problem and
provide better customer satisfaction. Retail banking is typically
mass-market banking where individual customer use local
branches of larger commercial banks services which are offered
include saving and checking account, mortgage’s, personal
loans, debit cards and credit cards. Indian retail banking
environment is rapidly changing at brisk pace, the changing
customer demographics demand innovate a differentiated
application based on advanced technology, improved service
and banking convenience, as the technology penetrate into
masses spread across the country literacy level increases in
Indian retail bank people are able to fully understand the concept

20
with which consumption and expectation power increases which
allow retail bank to flourish.
The financial sector reform designed to bring great keenness
into the banking system. Narasimhan committee suggested
various reform including internationally accepted banking
practices to achieve service excellence. Narasimhan committee
strongly recommended the liberalization process and suggested
to allow private sector bank with minimum startup capital and
other requirement, they also recommended a liberal policy
towards foreign bank to open in India since the reform started
interest rate structure has been deregulated with the great
freedom available with the bank to decide rate structure of
deposit and advance as well as product range banking has
become very competitive in respect to location that is branch
network which resulted in market power shifted from bank to
their customers. The lowering of entry barriers and distorting
product lines of banks the oligopolistic nature are changing into
free market place, financial liberalization has created intense
competition and retail bank are making their strategies to
increase customer satisfaction and loyalty. Retail bank are
penetrating with this strategies because of problem in
differentiating the service offering furthermore customer
distinguish little difference in the banking product offered by
retail bank as new offer is quickly being utilized by other
competitive banks, however it is the fact many research on
service quality has been developed countries even thenservices
are among the fastest growing sector in emerging countries. In
the light of the meagerness of research service quality issue in

21
India it becomes very important to determine service factor
which are considered by customer in selection process of
various service with tough competition with international bank
the large holding companies and innovation in the market places
which has created muddle and exertion in selection process of
the customer so provision of quality service should be the
central concern for retail bank manager, service management
academic and practitioners. This paper try to fill the gap in the
service quality literature by exploring dimensions of customer
perceived service quality in relation to retail banking of India
and banking marketing. This curb has been utilized in five banks
to discovery wallop in dimension of service quality, finally the
paper can help manager to take initiative, enhance employee’s
skills behavior and attitude on the basis of service quality
dimension. The dimension of service quality are underpinning
our understanding of service quality is an elements, various
researcher have specified various elements but the well-known
elements that has establish a reputation among various
researcher is SERVQUAL developed from parasuram and
colleagues from the USA who created five dimension ate
tangibles, reliability, responsiveness, assurance and empathy.
SERVQUAL model help in order to assess their expectations
and perception of services, this model help in measuring
services quality by evaluating gap between expected and
perceived services
Gummesson (1994) he identified three management paradigms
manufacturing paradigms which deals with goods and concerned
with productivity technical standard bureaucratic-legal paradigm
22
which are commonly used in public sector and are concerned
with regulation and rituals before end results
Service paradigms focus on service management particularly in
the marketing area and stresses the importance of customer
interaction with service provider in delivering service and
creating value, customer satisfaction is conceptualized as being
transaction specific meaning it is based on the customer
experience on a particular service encounter it has been
suggested that from service the SERQUAL instrument need
considerable adaptation and that items used to measure service
quality should reflect the specific service setting under
investigation and that it is necessary in this regard to modify
some of the items as required, these are of interest to users of
SERQUAL and for all those who want to understand better
concept of service quality, hence there is need of more research
into the dimensionality of service quality in different
circumstances with specific industry and service settings The
origination of service marketing has contributed to core
importance of customer’s satisfaction through proper
delivery of service quality
Lovelock and wirtz (2007) mentioned in their study
service are treated to be economic activity between the
two parties who are involved in the exchange of value
between seller and buyer in the market they explain
services as performances which are commonly based on
time and had opinion that customer are buying service for
their desired result before 1983 the definition of the
23
quality was completely based on achieving quality with
the concept of quality control
Crosby (1979) define quality as” consistent with needs”
and assumed that existence of correspondence between
quality and operational standard
Cornell (1984) considered that the service industry
required a wider concept and definition in comparison to
manufacturing industry
Zimmerman (1985) took the quality control concept of the
manufacturing industry and applied into the service
quality Zimmerman include component of service quality
such as replication of manufacturing ability, immediacy,
ultimate user satisfaction, practicality and corresponding
standard
Zeithalm and Bitner (2005) customer satisfaction is
consumer defined evaluation of product and services that
meet their needs and expectations, services quality is a
multi-dimensional concept which include number of
aspects of pre and present service experiences
Customer not only buy product and services but simply
buy the total package of product performances, access
experience that understand how an customer define value
achieve superior long term profitable growth

24
Kotler and Keller (2009) identified four basic character
that explain service for any marketing program
The first state is intangibility which explain service
cannot be seen touched felt or smelled before they are
brought and consumed second is inseparability desired
service are produced and consumed simultaneously third
is variability the quality of a service depends on who
provide the services on where when and to whom it is
provided so it is very variable
Perishability refer to the fact that services cannot be
warehoused or stored at certain place so their perishability
can be a problem in the event of fluctuating demand
Indian bank has successfully in promoting new services to
its customers
State Bank of India
State Bank of India (SBI) is the largest bank in India. It is
measured by the number of branch offices and
employees as the largest bank in the world.
Established in 1806 as Bank of Bengal, it remains the
oldest commercial bank in the Indian Subcontinent
and also the most successful one providing various
domestic, international and NRI products and
services, through its network of 13,908 branches,
including 4,731 associate banks' branches in India

25
 and overseas. It also provides financial services, such
as life insurance, merchant banking, mutual funds,
credit card, factoring, security trading and primary
dealership in the money market. With an asset base
of $126 billion and its reach, it is a regional banking
behemoth. The bank was nationalized in 1955 with
the Reserve Bank of India having a 60 percent stake.
It has laid emphasis on reducing the huge manpower
through Golden handshake schemes and
computerizing its operations.
It also has non-banking subsidiaries and joint ventures,
such as SBI Capital Markets Ltd., SBI DFHI Ltd.,
SBI Funds Management Pvt Ltd., SBI Factors &
Commercial Services Pvt Ltd. and SBI Life
Insurance Company Ltd. Effective from April 20,
2005; it acquired a 51 percent stake in Indian Ocean
International Bank Ltd.
A change in the functional orientation of banks the
purpose of banking have been redefined the main reason
of change is expectation and need of the customer
Customer doesn’t have any willingness to wait or stand in
the queue especially in urban areas with the development
of ATM phone and net banking with availability of
services right at doorstep has changed the attitude and
preference of the customer, with the arrival of universal
26
banking bank prime objectives to provide all banking
product and service offering under one roof and their
endeavor is to be customer centric
Economic reform took place in India made private bank
to emerge as big player with technical and customer
focused issues, previously service quality was not been
linked to profit
Zeithami (1998) has found evidence about the impact of
service quality on profit Keiningham (1995) he created a
model of service quality improvement and profitability
and sub model which stayed together to form ROQ
approach

1.7 Strategies of bank to satisfy their customer with marketing

strategies
Product bundling and relationship pricing banks need to think
beyond one-size-fits-all strategy to cater or tackle the customers
increasing demand customer will leave an institution for getting
the services, whatever they prefer at the best price available for
it, banks should have an opinion about product and pricing with
the perspectives of the customer and respond back according to
the value that customer bring or offer to the banks across the
spectrum of fees, rates, features and services. Cross-lob data
sharing and building 360 degree customer view there are many
issue to be faced in integrating cross lob data like extracting data

27
from various dissimilar system so presence of duplicate record
would be high in business application so it is very important to
have 360 degree view of customer which help you get insight
information about the customers like demographics,
engagement, need and preference, this knowledge help an
organization to precisely target product and services to existing
customer and get more profitable customers maximize lifetime
value, reduce marketing cost and improve customer satisfaction
Sophisticated customer segmentation which is optimum way to
segment the need of the customer according to standard banking
metrics like tenure with the bank, balances of account and loans,
frequency of interaction with the bank number of accounts
information related to psychographic like value, attitude, life
style, behavioral (usage rate, price sensitivity, brand loyalty and
benefit sought and demographic variables (occupation, income
and family status)
Real time cross-selling/up-selling bank can use real time events
and complete knowledge of customer to offer cross marketing
campaign based on wedding, home purchase/sale, new job,
stock transactions which will help in building strong rapport
with the customer the more customized product/service offering
higher rate to switching banks
Automating customer care in the digitation world customer
demand more self-service options at anywhere or at any time so
bank has to expand on customer care, sufficient cash, and event
based decision making with lower cost bank should have
perspective about lowering cost bank about giving attractive
offer as incentive to the customer, it is a latest technology to
28
understand their client or customer at ground level and giving
them quickly whenever they require at most. Restructuring of
bank with more developed facility available within the database
of the bank so that quickly access to information and on the
basis better services can be created for customer satisfaction,
bank should retain customer through all multi-channel or from
all the sources (branches, online, mortgage, and investment
advisor technology advancement has change the behavior and
perception, interaction so the bank has provide seamless
experience across all the channel from online web-enabled
mobile device, online banking and call center such execution
could bring great reward but proper set of investments and
development of the new capabilitiesFinancing industrial growth
within the Indian economy have been developing at a blistering
pace the Indian bank are trying to establish capacity in order to
meet future demand bank play a crucial role in financing this
industrial growth bank are rapidly utilizing latest technology to
improve product offering, customer services and operational
efficiency and risk management systems, so marketing strategy
must be dynamic and flexible to meet the changing scenario
internal or external environment. Banks has to invent market
strategies to amplify volume of business, so various research are
being carried such as specific product and segment
differentiating according to the customer potential and its
expectations focus on potential customer the result of this
research are being scrutinized In order to develop so that
optimum satisfaction can be provided to the customer, for the
quest of new market and customer segment banks are looking
for a place where potential of banking has not been utilized this
29
strategy adopted by the bank in order to create huge business
opportunity. Bank are feeling tremendous pressure with rapid
increase of competition with rapid increase of competition in
financial sector so bank have to develop new strategies to
sustain profitability, the increasing dynamic business scenario
and financial complexity also increase the need for customized
inexplicable financial product the complex and uncharacteristic
nature of risks are being faced by the companies are voluntarily
transferred to bank so it time to utilize financial tools and
advanced risk management method to capitalize on the business
opportunity

1.8 Measuring and improving customer satisfaction in the Indian

banking sector
Customer satisfaction in business term is a measure of how
products and services supplied by a company meet in order to
satisfy customer expectations. Customer satisfactions are
measured at the individual level but the report are being
prepared as a whole Customer satisfaction shows the accurate
data related to consumers purchase intentions and its loyalty
Customer service includes provisions related to all purchasing
information which include during after and before a purchase is
made. Customer satisfaction is an abstract and ambiguous
concept where the actual satisfactions differ from person to
person to another product/service. The state of satisfaction
utterly depend two aspect physical and psychological variables

30
which is inter-connected with satisfaction behavior such as
return and recommend rate
In recent year the demand from customer related to banking
product and services and service quality has been taken into
certain and elaborate dimension. The bank personnel has caution
ally taken into various factor on important keys to satisfy the
meet and expectations of customers, For a long period of time
theoretical study has undergone to understand the customer
needs and expectations, in the recent study two aspect has been
emphasis one is satisfaction and second is service
Banking is considered to be customer oriented services industry
customer are the main focus and customer service is the
differential factor, banks now have realized that business is
utterly depends upon client services and the satisfaction of the
customer has drove them into improving customer service and
build strong relationship with customer, with the recent changes
in the functional orientation of banks. The purpose or objective
of banking has been redefined or re-modified,the main reason
for the changes is changing customer need and expectations
Customer looks for a relationship with bank when they receive
beneficial benefit from its service, customer in urban area don’t
wait in queues and take lot of time in banking transactions with
the arrival of universal banking bank main motto is to vender or
provide all the product and services under one roof in the
banking sector, at last the working of customer mind is utterly
an obscurity which is complicated to resolve but with embracing
technology rapidly and by applying modern design and tool it

31
has been improved drastically and it has helped with re-
engineering and automating the core banking processes
Banking operation are becoming more customer oriented the
ability of the bank to offer client access to wide range of market
for all the different classes available for consumption of various
financial instrument has given maximum coverage and
competitive edge with the increase in population and
demographic coverage the demand of banking product and
service has reach out of the limit
Lord Thomson Kelvin (1824-1907) if you cannot measure you
cannot improve it. Schlesinger1997) the service profit chain
model of business performance has recognized customer
satisfaction as a critical variable in the real, it is also that
organization subunits were employee perceptions which are
favorable to provide superior business performances
The working of the customer mind is difficult to understand and
solve various component of customer satisfaction to analysis is a
challenging task the functioning of banking industry will give
insight about the parameter of customer satisfaction and their
measurement customer requirement is needed to be converted
and transform into measurable target there are various
measurement tool which help in measuring the customer
satisfaction appropriately but two basic tool are being used
regularly are
Common measurement tool (CMI) developed in Canadian
Centre for management development it emphasis how elements

32
of different approaches can be combined to improve and
understand satisfaction
Customer satisfaction tool (CSI) it represent overall satisfaction
level of the customer as one in whole usually denoted as a
percentage plotting satisfaction index of the customer against
time scale shows exactly how the supplier is performing the task
of customer satisfaction over a period of time
It is well known from the deep down customer relation should
never be left completely on chance or fortune so it is always
prescribed to seize the moment some of which can be described
or explained as getting started to improves
It is very important to understand the norm and pulse of the
customer which reflect what kind of mental status the customer
have or going through whenever you interact with customer
through any communication channel make sure you quickly
gauze their feeling and mental status various survey or comment
card can give the exact feel of the business where it is heading
toward and begin to build a relationship with a customer this
process would certainly demonstrate to customer employees and
competitors that you intend continually improve on your
services
Employees are your linking point to the customers and they are
untapped source of customer information they rather actually
know how does an customer feel they manage and look over the
hindrance that your customer have to overcome in order to use
your product and services with various business opportunities
available in the market so product development and

33
advancement are being drawn by the employees with the
utilization of their wisdom in the market
A defined and well organized customer service belief system
need to be established because even the staff or employee
working may have different view related to customer service so
it is always better one to agree to a definitive version regarding
the standard of the service to understand your customer
obstacles is the key issue to improve the customer services even
sometimes the manager tend to forget or don’t know what it is
like to be customer of their own business observation is the
keyword which allow customer movement and behavior whey
they are in your organization few movement can be traced on
daily tasks are they visibly annoyed do they stand in line looking
at their watch can you tell by their body language that they
would rather be somewhere else do your frontline staff seem
attentive to their needs
Managing computerized database regarding customer should be
done by any bank with all the important detail that would be
helpful in improving customer service now utilizing the data is
paramount to keeping customer connected to your organization
it is more emphasizing with adding value to their relationship
the detail described or imparted by the customer whether private
or normal information has to utilized and certain strategy should
be developed with the information available in order to change
the live in better way of the customer
Stay in contact with yours customer on a regular basis so that
customer never feels that they are being abandoned or ignored

34
three things must be done to stay in touch with customer are
give
Them your complete e-zine subscription ask the customer
whether they wanted to get updated about product and services
through e-mails
Follow up should be utilized after their purchase send an email
after few day of purchase another in a week or two and then in
the month create a customer focus group of 15 to 25 customer
who are loyal and regular and then need to be invited on regular
term to give their strong recommendation and opinion to
improve customer service a reward can be given to upheld the
customer like sending them free product or give them gifts
certificate, have a user friendly website that is easily workable
and navigated properly add FAQ page for frequently asked
question and explain in detail if a customer faces difficulty
related to their services follow-up with an electronic survey with
questions on how to increase your site user friendliness, answer
all the email and phone call within a few hours resolve customer
complaints very quickly and remove it completely that would
certain have great impact on customer it will surely show to the
customer that we really care about you
Don’t make your customer or visitor hunt or getting difficulty in
finding your contact information make it so easy so they can
contact you easily whenever they want, provide them with
variety of contact method as many as possible, try to hyper-link
all your email address so that they don’t need to type it offering
a toll number is good strategy

35
If you have strategic alliances or employees make sure they are
familiar with your customer service policy
Try providing bonus or incentives to practice excellent customer
service tell or inform every employees to be versatile and
flexible with each and every individual customer because they
have different concerns needs and wants
Increases the expectations value by providing excess than
predicated by the customer thank you with gifts to longtime
customer email them greeting cards on holidays or birthdays if
you have their address or online cards or email address and
home, give extra bonus or after who make big purchase or
multiple purchases
Always try to be polite and courteous In speaking to the
customer admit and apologize for your mistake and make it up
to them in big way and quickly in order to make dealing
regularly with a customer if your business is at local invite the
customer to your office for lunches, parties, barbecues, seminar
or other special event that occur related to your prestige
allowing customer participation is very important for holding
them for long
This is best possible way to improve customer services and
retain your customer for long period this are main point that the
customer perceive as valuable component to fulfill the
expectations

1.9 Upcoming foreign bank of India

36
There has been curiosity among various foreign bank who want
to enter in the Indian market with the liberalization RBI has
created a smooth way for foreign bank to enter into the banking
sector
The list of top 10 largest foreign bank in India are:
1. Citi banks
2. Standard chartered bank
3. Msbc India
4. Deutsche bank
5. Royal bank of Scotland
6. Dbs bank
7. Barelays bank
8. Bank of America
9. Bank of Bahrain and Kuwait
10. Doha bank
Latest foreign banks with representative’s office in India on 31
January 2015
1. Australian Bank
A. Raiffeisen zentral bank
2. Canadian bank
a. Royal bank of Canada
b. Toronto dominion bank

37
3. Belgian Bank
a. Kbc bank
4. French banks
a. Credit industrial et commercial
b. natixis
5. German banks
a. commerz bank
b. Dz bank
c. Kfw
d. Landesbank baden Wurttemberg
6. Malaysian banks
a. Cimb
7. Italian bank
a. Banca monte dei pasehi di diena
b. Banca popolare di Milano
c. Banca popolare di Vicenza
d. Intesa sanpuolo
e. Ubi banca
8. Spanish bank
a. Banco de Sabadell
b. Banco bibao vizeaya argentaria

38
c. caixa bank
9. Russian Bank
a. Gazprom bank
b. promsvya bank
c. Vneshe conom bank
10. South Korean banks
a. Industrial Bank of Korea
b. Kookmin bank
c. Korea exchange bank
11. Portuguese Bank
a. caixa geral de depositos

39
2. Literature Review

Customer satisfaction plays an essential role in uplifting the

banking sector and in improvement of performance, there are
some review about the studies related to the customer
satisfaction and the service quality
The Vigg silky et Al(2007) stated on the factor responsible for
customer satisfaction, the factor that effects customers
satisfaction are network access, Technicalities ,behavior
,innovative service ,comfort and image the study showed that
there are not much difference in customer satisfaction of public
and private sector
Hummayoun et Al(2009) state in his study about the impact of
service quality on satisfaction in banking sector, the study
revealed that service quality is the strong indicator of customer
satisfaction, furthermore those who have relevant service quality
would certainly satisfy their customers
Ushad subadar agathee(2010) had strong recommendation there
has been urgent need for more bankers to meet customer
expectations for faster and efficient better services with the
number of branches, the study showed that high income group
customer would be much dissatisfied with the bank services
because their expectation is much more than the middleman or
lower group and their expectation would be to improve the

40
customer service and quality improvement the banker has to
keep two aspect in their mind about reliability and
responsiveness
Kajal Chaudhary and MonikaSharma (2011) attempt to analyze
how effectively and efficiently public and private sector are
managing their npa and strongly recommended the bank staff
should be trained with proper documentation in NPA
Surabhi Singh and Renu Arora (2011) provide a relevant fact
about the training on stress, management and public dealing
should be given to the employee of nationalized banks
Furthermore the study showed customer were not satisfied with
employee of nationalized bank , ambience and infrastructure
while customers of foreign and private banks were not satisfied
related to high charges of services accessibility and
communication
Dhave and Ashish (2002) in their article entitled customer
measurement has made their opinion on customer perceptions
towards service and quality of a product determine the success
of a particular product or service in the market with complete
knowledge or cognition on customer perception a bank can
determine the suitable or appropriate action required to meet
needs or expectations of customers, a bank can certainly
recognize or identify their own strengths and weakness in
comparison with their competitive bank, the attributes that
influences customer satisfaction are product quality and service
and responsiveness about any query or problem and ability to
resolve the grievances and proper over all communications

41
Customer loyalty is an important strategies objectives of the
banks,customer satisfaction has been treated both as transactions
specific satisfaction which is post purchase evaluation between
the actual and expected performances,thus cumulative
satisfaction which show or indicate the overall evaluation in
order to retain the valued customer it is important to understand
the customer perception very closely
The study explained the concept of customer satisfaction
beginning from basic principles,banking is one of the numerous
services in which customer satisfaction had an everlasting
increasing importance in the corresponding research sector, it is
very important because of increasing competition in banking
sector, every banks are pursuing various strategies because of
various differentiating based on the service offering, Customer
satisfaction have never been neglected by researchers
Abratt and Russell (1999) have suggested the key factor
influencing customers selection of a bank which include the
wide range of rates, services, fee, and price charged
Fornell(1992) made strong emphasis on satisfaction is more
important for royalty in industries such as bank , insurances
,mail order and automobile although customer satisfaction and
quality appear to be important for all firms
Kano el al(1984) recognize three kind of customer requirement
one dimensional requirement, customer satisfaction, is
proportional to the level of fulfillment attractive requirement
gives the most favorable opportunity to delight and excite the
customers

42
Dr. Fatima(2011) emphasis on the service quality are more
dominant in the service business enterprises like banks growth
and development are utterly depended on the service quality as
there is optimum chance of providing maximum satisfaction
through service quality , quality of services is also interrelated or
attached with the behavioral outcome of the customer It also
have an elaborate study on understanding the various customers
perception about the service quality factor like assurance,
responsiveness, reliability ,empathy and tangibility in the
banking industry and the satisfaction level towards the banks, it
also examine the impact and effect of this particular service
quality factor on the satisfaction level based on the demographic
difference. The paramount goal of banking is to understand the
consumer and to influence buying behavior Holbrook and
Hirsehman (1982) showed relevant fact about one of the main
perspective of the consumer behavior research analysis buying
behavior which is called information processing perspective
According to this model, customer decision making process
contain a need satisfying behavior and a wide range of
motivating and influencing factor
The process has been shown in systematical order by Engel
black well et al (1995)
Need recognition: Realization of the difference between desires
or expected situation and the current situation that service as a
trigger for the entire consumption process

43
Search for information: Search are made for those data which is
relevant or approachable for the purchasing decision both from
external source or internal sources
Purchase: Acquirement of the chosen option of product or
services pre-purchase alternative evaluation assessment of
available choice that can fulfilled the actual need derived by
evaluating benefit that may produce or curtail in the number of
option to one specific which is preferred
Consumption: utilization of the selected or preferred option
Divestment: Removal or disposal of the unused or unconsumed
product or its ruminant’s
Customer satisfaction has been viewed as transaction specific
satisfaction which is post purchase evaluation between
expectations and actual performance’s
The cumulative satisfaction which shows over all evaluation
based on transaction’s overtime and is equal to sums of
customer experience with the seller as banker
Customer satisfaction is the presumption which lead to repeat
purchase,attitude change and brand loyalty
Payne(1993) give his opinion on banking industries related to
relationship, bondation and building relationship with them
which increase loyalty, it has been clearly identified that greater
the customer satisfaction with the product greater chances of
keeping the customer for long time or retain them and improve
profitability

44
But keeping in the mind customer satisfaction level can bring a
banking facility and customer service system to a certain level
this is beyond the expected standard and beyond the quality of
other from imagination
Basic model related to customer satisfaction which is ACSI
(American customer satisfaction index) model it is a series of
causal equation,linking customers’expectations,and perceived
quality, value, and customer satisfaction together
In this model customer satisfaction shows two results that is
customer loyalty and customer complain loyalty is basically
considered as mainstream of customer retention or tolerance to
price
In the last decade , lot of causal model were designed to show
the relationship among perceived performances , customer
satisfaction and loyalty most of which concluded that increase In
satisfaction led to improvement in loyalty which result in
repurchase, positive word of mouth behavior, cross buying and
price tolerance.
But among these research only few of them take consideration
of industry factor into account, this model has shown there has
been considerable increase on a firm ability to produce high
quality product and to provide high quality services,
identification of high quality product or services can be achieved
or determined by measuring customer satisfaction with product
and services, to achieve a high reliable and stable index of
satisfaction the ACSI(American customer satisfaction Index)
defines the satisfaction as a weighted average of three

45
ratings:perceived quality , customer expectations , and perceived
value
Customer satisfaction is very important for theoretical and for
practical issue for most of market and consumer researchers
Customer satisfaction can be treated as essence of success in this
competitive world of business, so customer satisfaction and
customer retention in strategy development for customer
focused firm and market oriented cannot be overturn or
overstated it has become a corporate goal especially for all
companies and banks who are working very hard to enhance
their quality in product and service customer satisfaction is a
reflection of strong feeling or attitude of the customer after a
product or service has been consumed and is general
terminology it defines as full meetings of ones expectations it is
the result of marketing activity where it is interconnected or
provide an link between various stage of consumer buying
behavior, for instance if a customer get satisfied with the
product that has been offered after his utility this is likely or
probably happen that customer indulge in repeated purchase and
try line extensions
A study conducted by Levesque and Mc dougall confirmed and
reinforced the idea that unsatisfactory customer service leads to
decrease in customer satisfaction and willingness to suggest the
service to colleagues friend and family
There has been lot of antecedents of customer satisfaction which
underline a statement showing satisfaction judgement are
universal rather than particular or specific bond, however some

46
argue on the point that customer develop a particular norm based
on product performances, product experiences rather than
expectations from the brands performance determine or state
confirmation/ disconfirmation of process
Recent working specify that cognitive component need to be
added because satisfaction judgement utterly based on effective
component as both co exists together and make independent or
individual contributions to the satisfaction judgement
The nationalized bank have to improve or make better ambience
infrastructure, employee behavior whereas the private and
nationalized bank have to lower charges good communications
and more accessibility in order to enhances customer
satisfaction, there has to efficient customer service develop to
improve customer satisfaction like easiness to use self-service
technology which assure reliability have a constructive impact
on the satisfaction of customers and faithfulness
Constructs such as reliability, responsiveness, fulfillment,
privacy and security have a significant association towards the
customer satisfactions in internet banking Quality of staff
dimension, maintaining accounts and handling of enquires
dimension as complete impact of customer satisfaction
Researches have established some important antecedents of
customer satisfactions in retail banking with respect to customer
satisfaction in the competitive world of business as well as the
key antecedents to the formation of overall customer
satisfactions

47
Organization will be more focus on maximizing profits and the
success would completely depend on how is customers
relationship managed, marketing has taken some intial step in
order to place the customer at the center as being the first
priority such as information sharing in customer service
channels sales force automation and target market segmentation
Customer profitability management need a multi -level
marketing returns on investment analysis handling a series of
marketing activities that can be integrated and utilize at
optimum level for a customer or customer segment
Customer satisfaction is a measure of how product and services
supplied by company meet or surpass customer expectations, it
has been key indicators within business and is part of the four
perspective of a balance and scorecard
Work done by parasuraman, zeithami and berry(Leonard L)
between 1985 and 1988 delivered SERVQUAL which provide
the basis for the measurement of customer satisfaction with a
service by using the gap between the customer expectations of
performances and their perceived experience of performances
this provides the researcher with a satisfaction gap which is
semi-quantitative in nature Cronin and Taylor extended the
disconfirmation theory by combining the gap described by
parasuraman, zeithaml and bervy as two different
measures(perception and expectations) into a single
measurement of performances relative to expectations
Clearing defining and understanding customer satisfaction can
really help in assessing and recognizing opportunities for

48
product and services innovating and serve as the basis for
performances appraisal and reward systems, it can also serve as
the basis for a customer satisfaction surveying program that can
ensure that quality improvement efforts are properly focused on
issue that are most important to the customers

3. Need for Research

Finance and banking is blood of trade, commerce and industry,
banking sector acts as a backbone of modern business. The
entire development of any country is utterly depended upon the
banking systems, a bank is treated to be a financial institutions
which deal with advances, loan and deposits. The banking has
tend to become an essential part of survival for human being
nationalized banks have the pious domination on the entire
banking system, global economy have experienced various set
back in the past year or so Indian economy has become the
fastest growing economy for 2016, during this particular year
economy remain sound footing, growth and stable inflation but
the problematic area remain weak investment and tepid earning
growth continue to hinder the economy banking sector has
always remain barometer of the economy
The ownership and domination still remain in the hand of public
sector despite gradual decline in their share, the reserve bank of
India had continued to reduce interest rates the repo rate stand at
6.25% although the banks have curtail the base rate but not to
the same extent the Indian economy is moving towards
normalcy after demonetization the central bank continue in
49
checking monitoring and regulating liquidity data inflation
number so as to decide what course of action to be chosen in
their monetary policy the infusion of capital to public he sectors
banks will remain a crucial aspect for these banks since the
banks are still facing the problem of bad loans with declining
provisions’ coverage ratio which mean that the bank would
require sufficient fund or capital to disburse credit
3.1 The need to measure customer satisfaction
Customer satisfaction refer to how a company’s product and
services meet or exceed the expectations of the customer, It has
looked as perfect indicator how your business is running and
give an clear indication how would it further run in long
duration customer satisfaction is very important tool or
component of business strategy customer satisfaction is very
helpful in predicating sales and profitability with negative or
positive impact customer satisfaction measures help us to
indicate about whether the customer would be loyal to the brand,
show less interest in other competing products and contribute to
long term success satisfied customers are central to optimal
performances and financial returns, In today world customer
have been treated as stakeholder who satisfaction with the
enterprise much be incorporated in strategic planning efforts. A
company who is striving for success are directly giving lot of
emphasis in measuring and tracking certain search reports
reflects that by giving high priority on customer satisfaction
which would certain improve organizational performance in the
global market place with better and proper understanding of
customer perceptions companies can determine the actions
50
needed to meet the customers’ needs it help in identifying their
own weakness and strength where they are standing now with
their competitor. Customer satisfaction measurement helps to
promote an increased focus on customer outcomes and stimulate
improvement in the work practices and processes uses within the
company customer satisfaction is quiet abstruse and complex
issue there have been lot of debate and confusion about what
exactly is required and how to go about it, customer satisfaction
helps in reducing customer churn, an Accenture global customer
satisfaction reports(2008) found the price is not perennial
problem for customer churn rather it is over all poor quality of
customer service Customer satisfaction act as metric by which
the customer churn can be controlled and reduced
A study by info quest found that an utterly satisfied customer
contribute 2.8 times more revenue than somewhat satisfied
customers, furthermore id we study in detail we found a totally
satisfied customer contributes 14 times more revenue than
somewhat dissatisfied Customer lifetime value(CLV) has been
given more importance by an successful entrepreneurships.
Mckinsey made an statement that an unhappy customer tell
between 9-15 people about their experience whereas 13% of
unhappy customers tell over 20 people about their experiences,
that why many firms ask for customer feedbacks using various
approaches regardless of how you collect this information it
directly give an unsound statement to the customer that your
satisfaction is our priority and it does matter and bother us and
we would take anything do but to serve you better

51
3.2 Expectations and customer satisfaction
Customer satisfaction reflects the expectations and experiences
that the customers has with a certain products or
service,expectations basically include two things atmost first is
the experience second is the evaluation of past and current
product
Customer hold both explicit and implicit performances
expectations from features attributed and benefit of product and
services
There are basically 7 customers’ expectations that are need to be
study and understood precisely before set out measure of
customer satisfaction
1. Explicit Expectations
Explicit expectation are properly defined performance standard
that are related to the product performances which mean that
how certain things will behave according to your mental
perception that you have about certain product it is certainly a
pre-defined performances that we have before utilizing certain
products
2. Implicit Expectations
This expectation reflects the comparison of two performances
between two certain company, industries and even cultures,
basically it establish the norm of performances it an ability to
check on the best performances done with the same action at
different places
3. Static performances expectation
52
It reflects or state that what are the performance and quality
defined for a specific application performance measures related
to quality of outcome which may include customization,
dependability, timeliness, accuracy, evaluation of accessibility
and user friendly interface this are the performances we see and
often erroneously assumed to be single dimensions of
performances that exists
4. Dynamic performance expectations:
It is kind of expectations which reflects how certain products or
services is expected to evolve over time, It included about the
changes in product, support or services that are required to meet
future business or use environment it may also help in to
produce static performances expectations as new uses,
integrations or system requirement development and become
more stable
5. Technological expectations
It basically focus on the evolving state of the product category
better example for this is mobile phone are continually evolving
leading to higher expectations of new features, mobile service
provider effort to restrict consumer capacity to switch to new
technology with latest features and function having marketed
rate plans with high cancellation penalties for switching
providers but with liberal upgrade plans for the phone they offer
6. Interpersonal expectations
It reflects the relationship between the customers and the
product or service provider person to person relationship are

53
very important especially when product needs support for proper
use and functioning, support expectations include interpersonal
sharing of technical knowledge, ability to solve problem able to
communicate properly reduced time to problem resolution,
courtesy, patience, enthusiasm, helpfulness, assurance that they
understood my problem and my situation communication skills
and customer perceptions regarding professionalism of conduct
often including image and appearance
7. Situational expectations
In developing a customer satisfaction survey it is very important
to evaluate why pre purchase expectations or post purchase
expectations may or may not be fulfilled or even measureable
The following criteria condition are being considered
1. Expectations may not include unanticipated services attributes
that may not accustom to the customer and are new to the
customer
2. Expectations may also be based imprecise images that may
create wide range of acceptable performances and expected
satisfaction
3.Product performances expectations and evaluations may be
sensory one and may not cognitive as being expectated of taste,
style of images such expectation are difficult to evaluate and
understand but may cause overtime and time consumptions
4. The product use may or not create such conscious effect or
cognition (evaluation) as it was desirable when it measured it

54
turn out to be meaningless satisfaction or dissatisfaction
information
5. There might be unanticipated benefit or consequences of
purchasing the product (such as uses, usage, situations or
features not anticipated with purchase)
6. The original expectations may be unrealistic high or low
7. The product purchaser, influencer and user may be different
to each other and might be having expectations
So before measuring customer satisfactions all this seven factor
related to expectations must be considered to drive out the
accurate result and surely having complete and detail
information how to utilize this aspect to have insight of
customer satisfactions research

3.3 Factor affecting customers towards particular banks

The factor which affects the customer minds towards a
particular bank are basically on product and services that are
been provided but there are certain other aspect that are kept in
the mind by the customers are:
1.Reliability: Friendly employees, branch locations, close to
their homes, fast and efficient services, availability of credit and
financial services, counseling are particular point that are being
consider by the customers
2.Conveniences: Online banking facilities and overall bank
environment, keenness on utilization of electronic

55
services(ATM), other factor include parking facility free
delivery of demand, phone banking and free home cash delivery
are included In the preference of customer because they want to
save time easy accession of banking loan facilities and default
salary account of a particular bank was the key issue while the
further research of customer perception stated above
requirement of the customers
3.Assurance:Another aspect came in the customer selection of
banking service was dependability of institutions, accessibility,
easiness of process of transactions, variety of services offered
and availability of loans at competitive interest rates basically
consumers are inclined to the prospect of ever lasting
relationship which help professional associations towards”
protect consumers from the third parties acting
opportunistically” furthermore expectations towards delivery
process, easy handling of queries , delivering on services as
promised, length of waiting time, are other aspect or criterion of
selecting a specific banks
4.Responsiveness:Another criterion which influence in selecting
the financial institutions by the customer relate to fast and
efficient services, friendly and helpful staff basically very
customer have different aspect some are sensitive to core service
offered and some are conscious about every aspect of the banks
and other want best deal to shop among those service friend
lines and well-behaved, helpful staff play vital role in the bank
decision process followed by hours of operations, size of waiting
lines and efficiency of personnel

56
5.Accessibility: It emphasis on proximity and service quality
which are very important for customer furthermore factor such
as accuracy in account management, efficient mistake correction
and speedy service and decision making are more important and
mandatory in relation to the convenience of location advertising
and price
6.Value added services: It emphasis on price, speed and access
are particular important things in choosing a bank service most
customer place a high value on lower prices and higher
transactions speeds and apply on their personalized service and
they are willing to accept lower service in exchange for price
breaks they basically are keen or depended on service charge
policy, reputation, competitiveness of loan rates, times required
for loan approval and friend lines of tellers are some factor that
are in perception with this customer in choosing certain banks
This are the basic point on which an customer act and make
decision while choosing any banks which can provide maximum
benefit at most least cost so that they never felt out of deficit or
lack of financial transaction according to their basic requirement

4. Research methodology
4.1 Objectives of research
The main objective of this study are-
1.To identify customer satisfaction variables which lead to
building relationship with customers in the Indian banking
sector

57
2. To identify the strategies of banks to satisfy their customers
3. To analyze the satisfaction level of customers with respect to
the various service provided by the banks
4. To study the difference in perception of the customers of the
bank towards various services provided by bank.

4.2 RESEARCH DESIGN: Exploratory design

This study is exploratory in nature. It provides a description of
contemporary satisfaction parameter in the Indian banking
sector. Exploratory research provides insights into and
comprehension of an issue or situation. Exploratory research
helps to determine the best research design, data collection
method and selection of subjects.
4.3 SOURCES OF DATA-
There are many sources of data collection, such as secondary
data collection and Primary data collection.
Primary data--
There are various ways to undertake the gathering of primary
data, including conducting surveys to create market data or
using other research instruments such as questionnaire.
Sample size- 100
Sample techniques- Convenience sampling
Secondary data

58
This involves information that already exists somewhere, such
as in studies already undertaken on this area as well as published
books, articles in journals, articles on the internet and other
sources.

Relationship marketing dimensions were identified by

conducting a customer satisfaction survey of five banks in India.
The research process involved the following steps.
First, a literature review was undertaken to identify what
parameters to consider in research. It outlines the previous
research with respect to customer satisfaction in the banking
industry.
Second, in-depth interview were held with customers to
establish the evaluation criteria and factors which results in
customer satisfaction.
Third, a questionnaire was constructed and piloted.
Last, the population and sampling procedure were established
and methods of data collection and analysis determined.
The present research is exploratory in nature and aims to
develop hypothesis which can be tested later. It provides
description of contemporary satisfaction parameters in the
banking industry. It is not explanatory as it does not test any
casual relationships.

4.4 RESEARCH INSTRUMENT

59
The questionnaire was designed from the literature review as
well as from the results of in-depth interviews. It included
sixteen variables which determined the satisfaction of the
customers of the five banks chosen for the study. Two of these
banks were national banks namely,state Bank of India(SBI) and
Punjab National Bank(PNB) and three were Private sector
Banks namely, Housing
Development Finance corporation(HDFC),Industrial Credit and
Investment Corporation of India(ICICI),and Industrial
Development Bank of India(IDBI). SBI and PNB were chosen
because they have the largest network of branches in India.
ICICI, HDFC and IDBI were the first private banks to introduce
“intelligent” banking in India. These banks have a strong retail
presence and offer a comprehensive range of information to the
customer. They have taken initiatives to satisfy customers and
provide value added services.
Data from 100 customers were collected. The five banks were
contacted individually to obtain the contact addresses of the
customers and the questionnaire was administered to customers
who had been with the bank for three years. The questionnaire is
divided in to five sections. The second part of questionnaire
dealt with respondent satisfaction with respect to services and
the third part dealt with variables which involve transactions.
Customer satisfaction was recorded on a 7 point semantic
differential scale ranging from extremely good/satisfied to
extremely bad/dissatisfied. The other parts of the questionnaire
recorded information about customers experience with their

60
respective banks, their banking habits and demographic
information.

Demographic profile of the customers

Table 4.4(a) Demographics
1. Gender
Male 69.9%
Female 30.1%

Graph4.4(a)

61
INTERPRETATION-There are 69.9% male and 30.1% female
respondent in my study.

Table 4.4(b) - Marital status

Married 50.8%
Unmarried 48.5%
Other 0.7%
Graph 4.4(b)

62
INTERPRETATION- There are 50.8% married and 48.5%
unmarried respondent in my study.

Table 4.4(c)-Monthly Family income

Less than Rs10000 19.6%
Rs10000-20000 28.6%
Rs20000-30000 27.0%
Rs30000-40000 16.2%
More than 40000 8.5%

Graph 4.4(c)

63
INTERPRETATION- There are 19.6% ,
28.6%,27.0%,16.2%,8.5% respondent whose monthly family
income is less than Rs10000,Rs10000-20000,Rs20000-
30000,Rs30000-40000,more than 40000 respectively in my
study.

Table 4.4(d)-Age
Below 25 years 32.8%
25-35 years 27.0%
35-45 years 23.8%
45-55 years 11.9%
Above 55 years 4.5%
Graph 4.4(d)

64
INTERPRETATION- There is 32.8%, 27.0%,
23.8%,11.9%,4.5% respondent whose age are below 25
years,25-35 years,35-45 years,45-55 years and above 55 years
respectively.

Table 4.4(e)-Education
Secondary 1.3%
Higher secondary 2.7%
Undergraduate 3.4%
Graduate 40.9%
Post Graduate 51.7%
Graph 4.4(e)

65
INTERPRETATION- There is 1.3%,2.7%,3.4%,40.9% and
51.7% respondent whose education are secondary, higher
secondary, Undergraduate ,Graduate, Post graduate respectively
in my study.

Table 4.4(f)-Occupation

Home maker 4.9%

Service 45.6%
Self employed 25.2%
Retired 1.6%
Students 22.7%

66
Graph 4.4(f)

INTERPRETATION- There are 4.9%, 45.6%, 25.2%, 1.6%,

22.7% respondent whose occupation is Home maker, service
self-employed, retired and student respectively in my study.
5. Analysis and Interpretation

It takes lot of perpetual determination to maintain high customer

satisfaction levels (by Kevin Cacioppo)
As markets goes downward, companies are working very hard to
upsurge customer satisfaction and keep their current customers
rather than dedicating additional resources to pursuit potential
new customers. The entitlement that it costs five to eight times
as much to get fresh customers than to hold on to old ones is
crucial to understanding the drive toward benchmarking and
pursuing customer satisfaction.
67
 Determining customer satisfaction is a comparatively new
concept to many companies that have been engrossed
completely on income statements and balance sheets.
Companies now distinguish that the new global economy has
changed things forever. Increased competition, swarming
markets with little product differentiation and years of persistent
sales growth followed by two decades of trampled sales curves
have shown to today's sharp competitors that their focus must be
modified .
Competitors that are flourishing in the new global economy
distinguish that measuring customer satisfaction is crucial, so by
applying this concept to retain the customer and find out various
in order to get new customer. The competitors who will be
efficacious identify that customer satisfaction is a perilous
strategic weapon that would undoubtedly increase market share
and augments profits.
The problem companies face, however, is exactly how to do all
of this and do it well. They need to understand how to quantify
measure and track customer satisfaction, So by applying this
concept to retain the customer and find out various in order to
get new customer. Plans created using customer satisfaction
research results can be premeditated to target customers and
processes that are most able to upsurge profits.
Too many companies rely on obsolete and undependable
measures of customer satisfaction. They watch sales volume.
They listen to sales representatives describing their customers'
states of mind. They track and count the occurrence of

68
grievances. And they visualize accounts receivable reports,
identifying that calamitous customers pay as late as possible--if
at all. While these methods are not complete without any
specific value, they are no auxiliary for a valid, well-designed
customer satisfaction surveying program.
It's not surprisingly to find that market leaders diverge from the
rest of the industry in that they're designed to hear the voice of
the customer and achieve customer satisfaction. In these
companies:
Marketing and sales employees are mainly responsible for
designing accordingly with customer input and preference in
customer satisfaction surveying programs, questionnaires and
focus groups.
Top management and marketing divisions are the kings of the
programs, who give there last recommendation and approvable
on specific program lead by the other department
Corporate assessments include not only their own customer
satisfaction ratings but also those of their competitors.
Satisfaction outcomes are made available to all employees
who are working in the programming and executing the task of
satisfying customer requirement
Customers are informed about vicissitudes brought about as
the direct result of listening to their needs.
Internal and external quality measures are often tied together.
Customer satisfaction is incorporated into the strategic focus
of the company via the mission statement.
69
 Stakeholder payment is tied directly to the customer
satisfaction surveying program.
A strenuous effort is made to relate the customer satisfaction
measurement results to internal process metrics.
To be successful, companies need a customer satisfaction
surveying system that meets the following criteria:
The system should be modest and informal to understand and
must be constructed utterly on the aspect interrelated to the
customer so that maximum information can be engendered by
the survey
The system should be well developed so that a connection can
be linked with the expectations and requirements of all your
customers with the product enhancement
It must be trustworthy enough that employee performance and
compensation can be evaluated to the final results.
The survey program must replicate the definite performance of
the market so on that ground the standard related to development
of new product can take place the finding should accurate and
worthy it must produce actionable reports for management.
The entire banking industry is going through unfavorable
changes that is happening because of prevailing market situation
which has completely effected with the advancement of
technology increased regulation and expansion of digital
channel to create a serious competition among various banks
which in turn has made bank concentrate more in development
of customer satisfactions

70
Perhaps the biggest challenge to face the industry is changing
customer expectations. Financial institutions are finding
themselves subject to the same expectations customers through
various survey program conducted they want fast, simple, and
easy user experiences. If retail banks can’t evolve to provide
what customers have come to expect, they will be left behind
Retail banking is going through a rapid and radical changes
because of market impulsiveness. The embracing and
convention of remote channels is growing while that of the
traditional branch channel is declining for rapid period of time
because of new customer having their point view toward the
product and services. In fact, between 2012 and 2017, the
percentage of customers who are expected to stop using the
branch is expected to increase by 7.2%, while that of customers
who are expected to use the online channel daily is expected to
increase by 7.9%. this is because of advancement in attitude and
characteristic of various customer moreover the role of the
branch in the retail banking channel mix is shifting, and it is
now being seen as a channel for providing advice and in-branch
self-service functionalities to customers. Many retail banks are
embarking upon branch renovation projects, which in turn, is
driving up the need for personnel optimization solutions.
Mobile banking, as a channel, has attained a critical level of
maturity across most regions, and banks have made hasty
progress over the last few years in sharping up their mobile
banking capabilities. As a result, we are now witnessing several
different trends in mobile banking, such as its growing linkage
with social media, its cumulative use as a lifestyle engagement

71
tool, and rapid growth in mobile payments options. Also, the
mass of multiple mobile devices and platforms and the growing
customer desire for a device agnostic experience are forcing
banks to congregate their mobile and online channels. Banks are
shifting from the traditional soloed approach to a more universal
approach towards application development.
Social media, though still looked upon by banks primarily as a
tool for tracking conversations and pushing outbound sales, is
witnessing an enlargement of its role. In the long term it is
expected to alter into a channel that drives brand affinity, guides
product development, and acts as a tool to attract and retain
customers
Customer segmentation happen or accur at demographic level
and at psychographic level.
Psychographics is principle that tries to study and profile people
based on their attitudes, Interests, lifestyles and values. The
study uses psychographic level in essence to try having
complete understanding of attitude, interest and value of people
profile psychographic approach is more valuable approach than
demographic approach because the recent study have shown that
it is the qualities that is more beneficial than quantity concept
which generally give an size and shape of pattern of
consumption but realistic approach is more of psychographic
level where the concept of perception and value is considered
the most rather than just denoting a mass or number. In India
there has been a gap of psychographic profiling of consumer the
psychographic variables of consumer keep on wavering and it

72
became more authoritative longitudinal study to keep track of
the changes and incorporate them the study of psychographic
level was pragmatically used in the retail banking scenario in
Delhi, India.
It was found that people emphasized on aptness and security in
their choice of banking channel when psychographic study was
applied in the retail banking scenario it was found that bank are
attempting to give each other the tough competition especially
for the same customer segmentations with lot of resources and
fund being consumed to develop a proper channel for the
specific segment as an profitable avenue for the bank, through
proper research it was found that bank are striving very hard for
a proper and better segmentation with proper tool and technique
applied for this profitable segmentation
The research developed an notion that show advertisement by
large public sector in India to give the customer wide spread
range of the product and service with a wide range of network
with quantitative approach applied by the bank in order to show
their strength but it vary from the veracity with many product in
their portfolio failed because of customer perception and attitude
which disallowed it to accept as whole and not properly
implemented in their strategic marketing
But later development and research banking sector and research
banking sector involved in consideration the emotional value
and value dimension before making a market strategies and also
choosing a target segmentation

73
The cross selling originated with the various tool and technique
implemented in marketing segmentation
Market segmentation now emphasis basically on the three
concept that is cost, service and relationship
The channel of distribution in market segmentation especially
regarding banking sector through psychological factor are
transaction security, ease of use, transaction accuracy,
speediness, convenience, time utility, provision of different
personal service social desirability, usefulness, economic benefit
and user involvement
Psychographics sketching of customer are at very early stage
which is not yet developed where banking and other firm are
carrying out research but unfortunately the lack of data are for
the academic practitioner doesn’t allow for satisfactory study
Furthermore the psychographics of the customer are
always fluctuating so it become very difficult even more
authoritative for a perceptual longitudinal study to keep track of
variation and incorporate them in the marketing
Further will the entrance of multinational bank that are
having advanced mechanism to profile the customer based on
psychographics attitude are showing a threating competition for
the Indian banks
So fundamentally psychographics study is best for making
marketing strategies related to customer satisfaction
The conceptual relationship between effective profiling and
strategic marketing can be best described in diagram

74
The number of respondent that were taken for research were 100
out of which 20 customer were from state bank of india 17 were
from ICICI 30 were from HDFC Bank 13 were from IDBI 20
were from Punjab national bank so out of which customer where
categorize into two section saving and current account first
where saving with 65 variables and other with as 35 variable in
current finding it showed that general involvement of the
customer showed from good to satisfactory while opening an
account the mean for the involvement was valued at 2.5 in the
scale from 1 to 7
It was seen that customer worked their account on the basis of
self service and further it showed the payment was done through
cash in majority of the cases when involvement of bank for
purchase
The customer of ICICI AND IDBI were ranging from 25-35
year whereas HDFC customer were below 25 year and other
customer of PNB AND SBI were above 35 year the customer of
HDFC, ICICI, IDBI were both graduated and post graduated of
their education level whereas customer of SBI and PNB were
just an graduated in their education level
Customer are very keen to get information of their bank through
various about the happening in their bank the sources many
involve such as magazine, journal, blogs, newspaper, internet,
hoardings and television the general mean value through which
customer gained information about the bank where through
hoarding and radio.

75
IDBI, PNB and SBI bank customer gained through the source of
information through advertisement of radio whereas HDFC bank
customer gained information through the sources of
advertisements hoardings and ICICI customer gained
information through the sources of their relatives, family
members and relatives.
The satisfaction of the customers with the services provided by
the banks was judged on the following 16 variables; service
scale; parking place ;attitudes of the bank staff; dissemination of
information; promptness in query handling ;networking of the
bank (branches);ATM facility; debit card ;credit card ;demand
draft facility; fixed deposit schemes ; money transfer; locker
facility ;D-mat facility ; tele banking .and net banking.

Table 8(a)-Customer satisfaction level in SBI

Satisfaction levels Number of customer
in percentage
Dissatisfied 25%
Satisfied 50%
Mixed 25%
Graph 8(a)

76
INTERPRETATION- There are 25%, 50% and 25% respondent
who is Dissatisfied, satisfied and mixed respectively in SBI.

Table 8(b)-Customer satisfaction level in PNB

Satisfaction levels
Number of customer in
percentage
Dissatisfied 35%
Satisfied 40%
Mixed 25%
8(b)

77
INTERPRETATION- There are 35%, 40%, 25% customers who
is Dissatisfied, Satisfied and mixed respectively from the service
of Punjab National Bank.

Table 8(c)-Customer Satisfaction level in IDBI

Satisfaction levels Number of customer in
percentage
Dissatisfied 30.7%
Satisfied 69.2%
Mixed 0%

78
Graph 8(c)

INTERPRETATION- There are 30.7%, 69.2% and 0%

Customers of IDBI who is Dissatisfied, Satisfied and mixed
respectively by the service of the bank.

Table 8(d)-Customer Satisfaction level in ICICI

Satisfaction levels Number of customer in
percentage
Dissatisfied 5.8%
Satisfied 76.4%

79
Mixed 17.6%
Graph 8(d)

INTERPRETATION- There are 5.8%, 76.4% and 17.6%

customers of ICICI bank who is Dissatisfied, Satisfied and
mixed respectively by the service provided by the bank. We can
say that the customer satisfaction in the ICICI bank is much.

Table 8(e)-Customer Satisfaction level in HDFC

Satisfaction levels Number of customer in
percentage
Dissatisfied 16.6%

80
Satisfied 63.3%
Mixed 20.0%
Graph 8(e)

INTERPRETATION- There are 16.6%, 63.3%, and 20.0%

customers from HDFC bank who is Dissatisfied, Satisfied and
mixed respectively by the service of the bank.

Table 8(f)-All over Customer satisfaction level in Indian

Banking sector.
Satisfaction levels Number of
customer in percentage
Dissatisfied 23.0%

81
Satisfied 59.0%
Mixed 18.0%
Graph 8(f)

INTERPRETATION- There is all over 23.0%, 59.0% and

18.0% customers from the Indian banks who are dissatisfied,
satisfied and mixed respectively by the service of banks.
The above interpretation shows that the customer satisfaction
level in Private sector banks is much compared to Public sector
banks.

6. Conclusions

The competition in Indian banking sector has made banks to

think about their strategies which has become very obsolete and
82
outdated, with the rising competition banks have taken somber
step in order to combat with the problem bank have certainly
given their best in order to optimize their resources through
various modern technique and adoption of any new trend with
the technology development being the most prominent to
develop the banking business with a particular standard even
though there are certain unfavorable emerging environment but
still bank have overcome all the aspect which for some time
being create a panic and maniac in the sector this has given
them the new light to raise their vision and explore the new
opportunities if not available create an opportunity it is always
said that bottleneck is the mindset, awareness and security
concerns the main outcome of the study is to show how can a
bank be more efficient in serving their customer if all the facility
and service are being designed with proper marketing strategies
surely there would be optimum minimizing cost where
satisfaction level would be optimum
According to the framework of research how private sector bank
especially foreign bank has immensely contributed in the
economic growth and create hub for the large investment and
consumption and satisfaction of service India the customer
satisfaction of customer are the prime concern for maximum
profitability what they have successfully achieved in quick
duration of time but still there has to be certain value of
dimension to be created in future in developing the economy and
turning out to be the fastest growing economy in the
subcontinent

83
The research also showed outcome of relationship between
service quality and customer satisfaction it showed that three
dimension of service quality have a significantly impact on the
customer satisfaction
It was reflected on the degree of variation in the service
provided by the bank with the emergence E-banking service it
also showed that there is increase in the customer satisfaction
level, reduction in cost of banking operations increase
productivity to expand the growth of E-banking service because
their service are being accepted by the customer and replacing
the traditional facility
Infrastructure play a very vital role in the recent advancement in
telecom sector, communication infrastructure and BPO industry
the entire country became a single hub for conveying the
information and the major cities got connected with each other
which helped in the reduction of total cost which lead to directly
help banks during the same period banks were trying to be busy
In connecting their branches with centralized database and core
banking solution by offering anywhere and anytime service
which create favorable opportunity for the banks to move
forward as India is developing swiftly and promptly there would
more favorable opportunity to utilize and explore in order for the
betterment of economic growth and development of developing
country like India
Sanguine enough a sunshine on a day which would lead country
like India to completely developed like other advanced and
developed countries Having study regarding the demographics

84
of the customers on the satisfaction level with the services
provided by various bank the research data show that among
various variables 71 percent of the SBI customer are above 35
year of age and they are graduate it showed that there
satisfaction level is found highest in the tradition facilities that is
provided by the bank in comparison to different level is show
contradictory to the previous data it showed 64 percent of
customer in three bank HDFC IDBI AND ICICI are ranging
between 25-35 year old who are post graduate with good sound
knowledge are satisfied with multichannel banking provided by
this three bank
The research finding illustrate that private are able to attract
more youngster with good education level and having sense of
new facility are able to completely utilized the usage of
multichannel banking whereas on other aspect people are old
enough are much happier with the traditional facilities provided
by the SBI bank demand is less among the youngster but still
SBI competitive level is equivalent to the private bank even
being traditional of nature perpetual mapping has been
comprehensively utilized in various application of marketing
where the manger want to know about cognitive dimension
related to the customer in order to assess about product and
service
The study helped I generating a proper perceptual map with the
utilization of five banks the study with basis of scores, it clearly
reflect what is the actual status or framework in the mind of the
customer regarding the bank

85
We can draw an opinion with exhibit 6 which illustrate about
customer satisfaction of SBI is more in traditional aspect and
least satisfaction with HDFC bank further it showed
multichannel facilities are being prescribed and utilized by the
customer of ICICI bank an on the other hand least satisfied with
Punjab national bank internal marketing has least satisfaction in
state bank of India customers whereas on the other hand it
provide maximum satisfaction to the customer of ICICI bank
Strategies that is developed on the basis of perceptual mapping
have resulted in better market control more stable growth
increase profit research tool based on perceptual mapping is
very important aspect of bank marketing
A ranking score sheet that is developed on the basis of
perceptual mapping shows the exact customer perception on the
basis the study can be done on managerial lesson on assessment
of strength, improvement of service and creating a research
strategy that would be beneficial regarding the bank
management another finding from the study emerges with regard
to information seeking how do customer get information
regarding bank previously accessed that ICICI bank got
information through their friend and relative whereas maximum
customer got information through hoarding and radio this
describe that bank without investing much get new customer
through referral process which is shown in ICICI customer
information bank must be continuously involved in the process
of retaining satisfying and acquiring customer

86
It also result in giving valuable information that satisfaction of
the customer is different across the five bank under the study
Facilities- Multi channel Banking Internal
Marketing

Debit card Tele banking Service scale

Credit card Net banking Parking space

Demand draft facility D-mat Attitude of

bank staff

Fixed deposits Dissemination of information

Money transfer Query

Handling
Locker facility

ATM

Networking

Table 9(a)-Ranking score sheet of customer perception-

Service Dimension State Punjab IDBI ICI HDF

bank of National CI C
87
 India Bank
Tradition facilities 1 4 2 3 5

Multi-channel banking 4 5 2 1 3

Internal marketing 5 3 4 1 2

7. LIMITATIONS
There are certain limitations of this study.
88
•Sample size is small so there may be possible that the desired
level of accuracy not exist.
•This study is conducted only in small area so there may be
chance of Inaccuracy of the result.
•In selecting the Sample, there are chances of sampling errors.
•Given the fact bank doesn’t reveal customer information
especially their name, address and phone number so it is not
easy to collect the data for research
The response of the some customer service were not on the mark
it was difficult to gain information regarding the bank
performance and service
The study is based on the secondary data which sometime give
error in measurement and allocation
Although the study was extensive ground but the data result
cannot be applicable
Large number of employee and customer was not taken because
of poor response and availability so insight knowledge regarding
customer perception would be difficult to analyze and interpret
ate.

8. Recommendations

89
Financial sector has really helped in development of Indian
banking sector but still there is lot of improvement should be
made in order to survive in global competitive environment the
research found there are certain things on which the focus must
made so to gain specific momentum for further development are
eradicating all the problem which create hindrances in
productivity service and development
1.Structural rigidities should be removed so that can be done
through formation of new policy so the maximum opportunity
which are favorable for commercial bank can be utilized that can
be made possible with restriction of excessive control of
government and making dependent and prompt decision so that
there is no waste of time regarding decision making process
2. Technical skill and proper training must be provided to senior
a selective program should be developed so that their illiteracy
towards technology can be eradicated completely
3 .A strong database must be created so that the employees make
perpetual responsive towards customer so that customer can be
retained for long period, creative knowledge and innovation
must be present in the perception of the employees
4. Awareness must be created among the customer especially in
rural area so that their services can be utilized by the customer
that can be done through proper distribution and accessible
channel
5. Quality excellence must be achieved in relation to the service
quality which can be easily achieved by detecting the delinquent

90
and correcting them rather preventing or ignoring them that
would be worthless
6. Creation of effective website like frequently asked question
(FAQ) need to be created for help, social advertisement,
knowledge and solution related to problem and the feedback and
suggestion can be acquired easily through such website
7.A friendly environment must be created so that it develop a
strong rapport with the customer that add value and customer
loyalty can be retained for a long time courteous and polite
manner can surely be the good way to create such environment
8.Restriction of cash transaction and switching of other mode of
payment should be accepted by the upper and middle section so
that weaker section can have sufficient cash and strength their
purchasing transaction power so that they can do necessary and
frequently transaction this can be applied to those where the
banking facility is advanced or paucity of facility

9. Bibliography

91
Lovelock, Christopher, 2001, services marketing; people,
Technology, strategy, 4th edition, prentice Hall.
Lev, B, 2001, Intangible management, measurement and
reporting Washington DC; Brookings Institute press.
C R Kothari – Research methodology
P N Varshney – Banking law and Practice
Customer satisfaction in Indian banking: a case study of
Yamuna Nagar District in Haryana. Political Economy Journal
of India, Jan-June, 2008 by Raj Kumar.
Customer Satisfaction Key Growth to Banks: An article from
The Hindu Article on customer relationship management in
banking sector by Dr.FB Singh. Article on Measuring Customer
Satisfaction in the Banking Industry by Dr. Manoj Kumar Das.
Gitman, Lawrence J.; Carl D. McDaniel (2005). The Future of
Business: The Essentials. Mason, Ohio: South-Western. ISBN
0324320280.
John, Joby (2003). Fundamentals of Customer-Focused
Management: Competing Through Service. Westport, Conn.:
Praeger. ISBN 9781567205640.
Berry, Leonard L.; A. Parasuraman (1991). Marketing Services:
Competing Through Quality. New York: Free Press. ISBN
9780029030790.

92
Kessler, Sheila (2003). Customer satisfaction toolkit for ISO
9001:2000. Milwaukee, Wis.: ASQ Quality Press. ISBN
0873895592.
Johnson, Michael D.; Anders Gustafssonb, Tor Wallin
Andreassenc, Line Lervikc and Jaesung Cha (2001). "The
evolution and future of national customer satisfaction index
models". Journal of Economic Psychology 22 (2): 217–245.
ISSN 0167-4870.
Bluestein, Abram; Michael Moriarty; Ronald J Sanderson
(2003). The Customer Satisfaction Audit. Axminster:
Cambridge Strategy Publications. ISBN 9781902433981.
.Rexha N, kingshott RPJ and AW ASS (2003) “The impact of
Relational plan on Adoption of electronic Banking” Journal of
service marketing, Vol.17 No.1,
Levesque, and MC Dougall (1996) “Determinants of customer
Satisfaction in Banking” International Journal of Bank
Marketing, 14(7),

Taylor and Baker (1994) “An Assessment of the relationship

between service quality and customer satisfaction in the
formation of consumer Purchase intentions. Journal of Retailing
70(2) PP. 163-178.4.Bitner, M.J. and A.R. Hubbert 1994
“Encounter satisfaction versus overall satisfaction versus
quality”. In R.T. Rust and R.L Oilver (eds) “Service quality”:
New Directions in Theory and practice London: sage
publication.

93
Cronin, J.Joseph, Jr., and S.A. Taylor. 1992 Measuring Service
quality; a re-examination and extension. Journal of Marketing
56pp 55-68.6.MC Dougall, Levesque (1994) “A revised review
of service quality dimensions: An empirical investigation”
Journal of professional services marketing 11(1).

Singh S (2004) “A Appraisal of Customer service of Public

Sector Banks,” IBA Bulletin, Vol. XXVI, No:8 (August), PP 30-
37.8.Uppal R.K (2006), Indian Banking Information
Technology, New Century Publications, New Delhi.9.Singh and
Amphora (1993), “Customer Satisfaction in Banking services; A
study of Amritsar”, ed., Radha Publication, New Delhi.
Internet websites:
www.google.com
http://en.wikipedia.org/wiki/Customer_satisfaction
Categories: Business terms | Consumer behavior.

94
10. QUESTIONNAIRES
Dear Respondent,
I am a student of swami VivekanandaSubharti University and
pursuing MBA. I have undertaken a project for which I intend to
make a particular framework so that questionnaire aimed at
comparing the customer satisfaction in the Indian banking
sector. Your cooperation is deeply beseeched to provide the
significant information. I assure that information will be kept
confidential.
Name of Customer _______________
Mobile No.______________
Name of the bank and type of
account_______________________________________
Please answer the questions and tick at the place that matches
your opinion.
The overall experience of customer ranged from good to
satisfactory while opening an account in any of five banks
Scale 1-7
Demographic profile of the customers
1. Demographics
Gender
Male
Female

2. Marital status
95
 Married
Unmarried
Other

3. Monthly Family income

Less than Rs10000
Rs10000-20000
Rs20000-30000
Rs30000-40000
More than 40000

4. Age
Below 25 years
25-35 years
35-45 years
45-55 years
Above 55 years

5. Education
Secondary
Higher secondary
Undergraduate
Graduate
Post Graduate

6. Occupation
Home maker
Service
Self employed
96
 Retired
Students

2. Mobile/Tele Banking
1. How would you describe your views about Customer Service Representatives?
Please tick in
The appropriate column. (1: Very Dissatisfied/2: Dissatisfied/3: Satisfied/4: Very
satisfied/5: Highly Satisfied), specify the Reason if not using the service

1 2 3 4 5
Call answering time
Flawless/correct operations.
Understanding and replying queries correctly
Communication skills/positive approach
General assessment about the service

97