Fyp MBA Gap Model

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A DISSERTATION REPORT ON
SERVICE QUALITY GAP ANALYSIS FOR BANKS

SUBMITTED TO UTTARAKHAND TECHNICAL UNIVERSITY, DEHRADUN IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION
Supervised By: Mr. DEV KANT KALA FACULTY M.B.A. UIT, Dehradun
Submitted By: SHOBHIT KR RASTOGI MBA (Marketing) 4th Semester
[Batch - 2010-2012]
UTTARANCHAL INSTITUTE OF TECHNOLOGY, DEHRADUN
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GUIDE CERTIFICATE
This is to certify that Mr. Shobhit Kumar Rastogi of M.B.A (Batch - 2010-2012), Uttaranchal Institute of Technology, Dehradun has successfully completed his dissertation report on Service Quality Gap Analysis for Banks under my guidance and supervision. This dissertation report is his original work and not copied from any other source. I wish him best of luck for his future.
Date: Place: Dehradun
Mr. Devkant Kala Asst. Professor, UIT, Dehradun
STUDENT DECLARATION
This dissertation report has been under taken as a partial fulfillment of the requirement of the award of the degree of the Master of Business Administration Uttarakhand Technical University, Dehradun. This dissertation report was executed during IV Sem. of MBA program under the supervision of Mr. Devkant Kala. Further I declare that this dissertation report is my original work and the analysis are for academic purpose only. This dissertation report has not been present in any seminar or submitted.
Shobhit Kumar Rastogi
ACKNOWLEDGEMENT
In the presence of Divine Power I express my deep gratitude to all those persons who has been very supportive and Co-operative and without their valuable Suggestions; the dissertation would have not been completed . Today after completion of the dissertation, I feel great relief and satisfaction. Now when I look back, I remember the day when I was assigned this dissertation SERVICE QUALITY GAP ANALYSIS FOR BANKS. I would never have completed this dissertation, if my supervisor Mr. Devkant Kala had not guided me. I was very happy with his precious guidance and valuable suggestions. Truly, this was a new exposure for me. I am thankful for efforts and support to my guide Mr. Devkant Kala who made lot of contribution in completion of this report. In the end I would like to thanks all the people for giving response and filling questionnaire, which is the cornerstone of the report.
SHOBHIT KUMAR RASTOGI MBA 4th semester
CONTENTS
Chapter 1 Introduction 1.1 Banking Industry in India 1.1.2 Evolution of the Indian Banking Industry 1.1.3 Service Quality 1.1.4 Dimensions of Service Quality 1.1.5 Gap Model 1.1.6 Service Quality in Banks 1.1.7 Major Players of Banking Industries Chapter 2 Literature Review Chapter 3 Research Objectives and Research Methodology 3.1 Research Hypothesis 3.2 Research Methodology 3.3 Research Design 3.4 Sample Design 3.5 Data collection sources 3.6 Tools uses for analysis 3.7 Limitations of the study Chapter 4 Data Analysis Chapter 5 Findings Chapter 6 Suggestions and Conclusion
Chapter 7 Bibliography Chapter 8 Annexure
Chapter 1 Introduction
1. Introduction
1.1 Banking Industry in India

1.1.2 Evolution of the Indian Banking Industry: The Indian banking industry has its foundations in the 18th century, and has had a varied evolutionary experience since then. The initial banks in India were primarily traders banks engaged only in financing activities. Banking industry in the pre-independence era developed with the Presidency Banks, which were transformed into the Imperial Bank of India and subsequently into the State Bank of India. The initial days of the industry saw a majority private ownership and a highly volatile work environment. Major strides towards public ownership and accountability were made with nationalisation in 1969 and 1980 which transformed the face of banking in India. The industry in recent times has recognised the importance of private and foreign players in a competitive scenario and has moved towards greater liberalisation. In the evolution of this strategic industry spanning over two centuries, immense developments have been made in terms of the regulations governing it, the ownership structure, products and services offered and the technology deployed. The entire evolution can be classified into four distinct phases.

Phase I- Pre-Nationalisation Phase (prior to 1955) Phase II- Era of Nationalisation and Consolidation (1955-1990) Phase III- Introduction of Indian Financial & Banking Sector Reforms and Partial Liberalisation (1990-2004)
Phase IV- Period of Increased Liberalisation (2004 onwards)
Current Structure
Currently the Indian banking industry has a diverse structure. The present structure of the Indian banking industry has been analyzed on the basis of its organised status, business as well as product segmentation.
Organisational Structure The entire organised banking system comprises of scheduled and non-scheduled banks. Largely, this segment comprises of the scheduled banks, with the unscheduled ones forming a very small component. Banking needs of the financially excluded population is catered to by
other unorganised entities distinct from banks, such as, moneylenders, pawnbrokers and indigenous bankers. Scheduled Banks A scheduled bank is a bank that is listed under the second schedule of the RBI Act, 1934. In order to be included under this schedule of the RBI Act, banks have to fulfill certain conditions such as having a paid up capital and reserves of at least 0.5 million and satisfying the Reserve Bank that its affairs are not being conducted in a manner prejudicial to the interests of its depositors. Scheduled banks are further classified into commercial and cooperative banks. The basic difference between scheduled commercial banks and scheduled cooperative banks is in their holding pattern. Scheduled cooperative banks are cooperative credit institutions that are registered under the Cooperative Societies Act. These banks work according to the cooperative principles of mutual assistance. Scheduled Commercial Banks (SCBs): Scheduled commercial banks (SCBs) account for a major proportion of the business of the scheduled banks. As at end-March, 2009, 80 SCBs were operational in India. SCBs in India are categorized into the five groups based on their ownership and/or their nature of operations. State Bank of India and its six associates (excluding State Bank of Saurashtra, which has been merged with the SBI with effect from August 13, 2008) are recognised as a separate category of SCBs, because of the distinct statutes (SBI Act, 1955 and SBI Subsidiary Banks Act, 1959) that govern them. Nationalised banks (10) and SBI and associates (7), together form the public sector banks group and control around 70% of the total credit and deposits businesses in India. IDBI ltd. has been included in the nationalised banks group since December 2004. Private sector banks include the old private sector banks and the new generation private sector banks- which were incorporated according to the revised guidelines issued by the RBI regarding the entry of private sector banks in 1993. As at end-March 2009, there were 15 old and 7 new generation private sector banks operating in India. Foreign banks are present in the country either through complete branch/subsidiary route presence or through their representative offices. At end-June 2009, 32 foreign banks were operating in India with 293 branches. Besides, 43 foreign banks were also operating in India through representative offices.
Regional Rural Banks (RRBs) were set up in September 1975 in order to develop the rural economy by providing banking services in such areas by combining the cooperative specialty of local orientation and the sound resource base which is the characteristic of commercial banks. RRBs have a unique structure, in the sense that their equity holding is jointly held by the central government, the concerned state government and the sponsor bank (in the ratio 50:15:35), which is responsible for assisting the RRB by providing financial, managerial and training aid and also subscribing to its share capital. Between 1975 and 1987, 196 RRBs were established. RRBs have grown in geographical coverage, reaching out to increasing number of rural clientele. At the end of June 2008, they covered 585 out of the 622 districts of the country. Despite growing in geographical coverage, the number of RRBs operational in the country has been declining over the past five years due to rapid consolidation among them. As a result of state wise amalgamation of
RRBs sponsored by the same sponsor bank, the number of RRBs fell to 86 by end March 2009. Scheduled Cooperative Banks: Scheduled cooperative banks in India can be broadly classified into urban credit cooperative institutions and rural cooperative credit institutions. Rural cooperative banks undertake long term as well as short term lending. Credit cooperatives in most states have a three tier structure (primary, district and state level). Non-Scheduled Banks: Non-scheduled banks also function in the Indian banking space, in the form of Local Area Banks (LAB). As at end-March 2009 there were only 4 LABs operating in India. Local area banks are banks that are set up under the scheme announced by the government of India in 1996, for the establishment of new private banks of a local nature; with jurisdiction over a maximum of three contiguous districts. LABs aid in the mobilisation of funds of rural and semi urban districts. Six LABs were originally licensed, but the license of one of them was cancelled due to irregularities in operations, and the other was amalgamated with Bank of Baroda in 2004 due to its weak financial position. Business Segmentation The entire range of banking operations are segmented into four broad heads- retail banking businesses, wholesale banking businesses, treasury operations and other banking activities. Banks have dedicated business units and branches for retail banking, wholesale banking (divided again into large corporate, mid corporate) etc.
Retail banking It includes exposures to individuals or small businesses. Retail banking activities are identified based on four criteria of orientation, granularity, product criterion and low value of individual exposures. In essence, these qualifiers imply that retail exposures should be to individuals or small businesses (whose annual turnover is limited to Rs. 0.50 billion) and could take any form of credit like cash credit, overdrafts etc. Retail banking exposures to one entity is limited to the extent of 0.2% of the total retail portfolio of the bank or the absolute limit of Rs. 50 million. Retail banking products on the liability side includes all types of deposit accounts and mortgages and loans (personal, housing, educational etc) on the assets side of banks. It also includes other ancillary products and services like credit cards, demat accounts etc. The retail portfolio of banks accounted for around 21.3% of the total loans and advances of SCBs as at end-March 2009. The major component of the retail portfolio of banks is housing loans, followed by auto loans. Retail banking segment is a well diversified business segment. Most banks have a significant portion of their business contributed by retail banking activities. The largest players in retail banking in India are ICICI Bank, SBI, PNB, BOI, HDFC and Canara Bank. Among the large banks, ICICI bank is a major player in the retail banking space which has had definitive strategies in place to boost its retail portfolio. It has a strong focus on movement towards cheaper channels of distribution, which is vital for the transaction intensive retail business. SBIs retail business is also fast growing and a strategic business unit for the bank. Among the smaller banks, many have a visible presence especially in the
auto loans business. Among these banks the reliance on their respective retail portfolio is high, as many of these banks have advance portfolios that are concentrated in certain usages, such as auto or consumer durables. Foreign banks have had a somewhat restricted retail portfolio till recently. However, they are fast expanding in this business segment. The retail banking industry is likely to see a high competition scenario in the near future. Wholesale banking Wholesale banking includes high ticket exposures primarily to corporates. Internal processes of most banks classify wholesale banking into mid corporates and large corporates according to the size of exposure to the clients. A large portion of wholesale banking clients also account for off balance sheet businesses. Hedging solutions form a significant portion of exposures coming from corporates. Hence, wholesale banking clients are strategic for the banks with the view to gain other business from them. Various forms of financing, like project finance, leasing finance, finance for working capital, term finance etc form part of wholesale banking transactions. Syndication services and merchant banking services are also provided to wholesale clients in addition to the variety of products and services offered. Wholesale banking is also a well diversified banking vertical. Most banks have a presence in wholesale banking. But this vertical is largely dominated by large Indian banks. While a large portion of the business of foreign banks comes from wholesale banking, their market share is still smaller than that of the larger Indian banks. A number of large private players among Indian banks are also very active in this segment. Among the players with the largest footprint in the wholesale banking space are SBI, ICICI Bank, IDBI Bank, Canara Bank, Bank of India, Punjab National Bank and Central Bank of India. Bank of Baroda has also been exhibiting quite robust results from its wholesale banking operations. Treasury Operations Treasury operations include investments in debt market (sovereign and corporate), equity market, mutual funds, derivatives, and trading and forex operations. These functions can be proprietary activities, or can be undertaken on customers account. Treasury operations are important for managing the funding of the bank. Apart from core banking activities, which comprises primarily of lending, deposit taking functions and services; treasury income is a significant component of the earnings of banks. Treasury deals with the entire investment
portfolio of banks (categories of HTM, AFS and HFT) and provides a range of products and services that deal primarily with foreign exchange, derivatives and securities. Treasury involves the front office (dealing room), mid office (risk management including independent reporting to the asset liability committee) and back office (settlement of deals executed, statutory funds management etc). Other Banking Businesses This is considered as a residual category which includes all those businesses of banks that do not fall under any of the aforesaid categories. This category includes para banking activities like hire purchase activities, leasing business, merchant banking, factoring activities etc. Products of the Banking Industry The products of the banking industry broadly include deposit products, credit products and customized banking services. Most banks offer the same kind of products with minor variations. The basic differentiation is attained through quality of service and the delivery channels that are adopted. Apart from the generic products like deposits (demand deposits current, savings and term deposits), loans and advances (short term and long term loans) and services, there have been innovations in terms and products such as the flexible term deposit, convertible savings deposit (wherein idle cash in savings account can be transferred to a fixed deposit), etc. Innovations have been increasingly directed towards the delivery channels used, with the focus shifting towards ATM transactions, phone and internet banking. Product differentiating services have been attached to most products, such as debit/ATM cards, credit cards, nomination and demat services.
Other banking products include fee-based services that provide non-interest income to the banks. Corporate fee-based services offered by banks include treasury products; cash management services; letter of credit and bank guarantee; bill discounting; factoring and forfeiting services; foreign exchange services; merchant banking; leasing; credit rating; underwriting and custodial services. Retail fee-based services include remittances and payment facilities, wealth management, trading facilities and other value added services.
1.1.3 Service Quality

Service quality is a term which describes a comparison of expectations with performance. "Service quality is a focused evaluation that reflects the customer's perception of specific dimensions of service: reliability, responsiveness, assurance, Empathy, tangibles. Satisfaction, on other hand, is more inclusive: it is influenced by perceptions of service quality, product quality, and price as well as situational factors and personal factors. Service quality affects customer satisfaction by providing performance (real benefits). For example, if consumers believe they have entered the McDonald's restaurant, they will get food, service, high quality everywhere the same, no matter the location of the restaurant.
"The creation of customer satisfaction can provide several benefits, including the relationship between companies and consumers are harmonious, providing a good basis for the purchase
and re-creation of customer loyalty, and form a recommendation by word of mouth that can benefit the company.
1.1.4 Dimensions of Service Quality

Reliability-Ability to perform the promised service dependably and accurately Responsiveness-Willingness to help customers and provide prompt service Assurance-Knowledge and courtesy of employees and their ability to convey trust and confidence
Empathy-Caring, individualized attention the firm provides its customers Tangibles-Appearance communication material of physical facilities, equipment, personnel, and
Reliability:
This dimension is shown to have the highest influence on the customer perception of quality. It is the ability to perform the promised service dependently and accurately. Sahara Airlines, an upcoming domestic air carrier within India, has been striving to protect itself as a reliable airline. It hopes to differentiate itself from other airlines Indian Airlines. To protect this reliability, Sahara Airways has a scheme of full refund plus a coupon of Rs3,000 to every passenger on delay of flights by more than 59 minutes. When service delivery fails the first time, a service provider may get a second chance to provide the same service in the phase called Recovery. The expectations of the customer are usually high er during the recovery phase than before because of the initial failure. Thus, the service provider is likely to come under greater scrutiny, thereby increasing the possibility of customer dissatisfaction. The reliability dimension, which ensures timely delivery time after time, helps the service provider to meet the customer expectations fully at the lowest level of service expectation.
Responsiveness :
It is the willingness of the service firms staff to help customers and to provide them with prompt service. The customers may have queries, special requests, complaints, etc. In fact,
each customer may have problems of his or her own. While the front-end employee may have been trained or equipped to deliver standardized services, the customers want them to go beyond this limit. It is the willingness to help the customer or willingness to go that extra distance that is responsiveness. Example: A customer calls room service to find out if they would pack a Jain lunch. It is not the hotels normal policy to cook such specialty and customized meals. However, the customer being very religious minded would be very pleased if the hotel could pack it for him to carry and eat. This may impose some strain on the kitchen. However, the hotel may be rewarded in two different ways if it agreed to provide the meal. The customer would be very pleased with the service and is very likely to recommend the hotel to his friends and acquaintances. In addition, the hotel could charge extra commensurate with the extra efforts. He is unlikely to mind paying more. The second aspect of responsiveness is speedy response to a customer request. When response is delayed customers usually loses interest. Many sales representatives respond on the phone, I will call you back. The call is never returned. The customer draws his or her own conclusion about the quality of service he is likely to receive in the future.
Assurance :
It defined as the ability of the company to inspire trust and confidence in the service delivery. It refers to knowledge and courtesy of the service firms employees and their ability to inspire trust and confidence in the customer toward the company. This dimension is considered vital for services that involve high risk as customers may not be able to evaluate all the uncertainties involved in the process by them. Example: Medical services requiring complex uncommon procedures, sales / purchase of financial securities, investment issues, legal affairs, etc. demand this service quality dimension. There are property developers/builders who provide a list of previous buyers of flats or apartments to potential buyers. The evaluation of construction services is beyond technical capabilities of most buyers. However, the prospective customers are free to call the previous customers. When prospective customers hear from them about the company and its satisfactory delivery, they feel assured and develop a more positive attitude towards the company.
Empathy :
It refers to the caring, individualized attention the service firm provides each customer. When service provider puts himself in the shoes of the customers, he may see the customers
viewpoint better. When customers feel that the provider is making his best effort to see their viewpoint, it may be good enough for most. Example: a lady customer with a young child arrives slightly late at the check-in counter and requests the agent for a seat along the aisle and near the toilet. Even if all such seats have already been taken up, the agent and the airline may make even effort to request another passenger to exchange seats and meet the customer demand. The lady passenger would be delighted if her request could be honored despite the last minute checking in, and even if she does not get such a seat, she would be grateful for their effort.
Tangibles :
It refers to physical facilities, equipment, and appearance of a service firms employees. The job of the tangible and physical evidence of a service is multifunctional. When a patient in the waiting room of a clinic sees the doctors certificate, he becomes aware of the quality of service he is about to receive. If a dental clinic provides patients with clean rubber footwear and freshly laundered bibs or coats before the actual service, the patients and their accompanying relatives or friends will be impressed. A dentist dressed in a spotless white coat is likely to impress, them even further. Tangibles provide the customer proof of the quality of service.
1.1.5 Gap Model
The five gaps that organizations should measure, manage and minimize:
Gap 1 is the distance between what customers expect and what managers think they expect - Clearly survey research is a key way to narrow this gap.
Gap 2 is between management perception and the actual specification of the customer experience - Managers need to make sure the organization is defining the level of service they believe is needed.
Gap 3 is from the experience specification to the delivery of the experience Managers need to audit the customer experience that their organization currently delivers in order to make sure it lives up to the spec.
Gap 4 is the gap between the delivery of the customer experience and what is communicated to customers - All too often organizations exaggerate what will be provided to customers, or discuss the best case rather than the likely case, raising customer expectations and harming customer perceptions.
Finally, Gap 5 is the gap between a customer's perception of the experience and the customer's expectation of the service - Customers' expectations have been shaped by word of mouth, their personal needs and their own past experiences. Routine transactional surveys after delivering the customer experience are important for an organization to measure customer perceptions of service.
1.1.6 Service Quality in Banks
In the days of intense competition, the banks are no different from any other consumer marketing company. It has become essential for the service firms in general and banks in particular to identify what the customer's requirements are and how those customer requirements can be met effectively. In the days where product and price differences are blurred, superior service by the service provider is the only differentiator left before the banks to attract, retain and partner with the customers. Superior service quality enables a firm to differentiate itself from its competition, gain a sustainable competitive advantage, and enhance efficiency (Mei et al. 1999; Kandampully and Suhartanto 2000; Gounaris et al. 2003). The benefits of service quality include increased customer satisfaction, improved customer retention, positive word of mouth, reduced staff turnover, decreased operating costs, enlarged market share, increased profitability, and improved financial performance (Rust and Zahorik 1993; Cronin et al. 2000; Kandampully and Suhartanto 2000; Duncan and Elliott 2002; Janda et al. 2002; Sureshchandar et al. 2002; Gounaris et al. 2003; Kang and
James 2004; Yoon and Suh 2004). The construct of service quality has therefore been a subject of great interest to service marketing researchers. Banking services worldwide can broadly classified into investment banking and commercial banking is primarily concerned with helping corporate bodies raise funds at the best possible rates from various markets. Commercial banking is concerned with channelling savings to productive uses. Banking in an intermediary function but one that is very essential for sustained economic growth. In India, since the nationalization of banks in 1969, banking has been primarily in the Central Governments domain. As part of the Governments liberalization policy which began in 1991, New Private Sector Banks (NPSBs) were allowed to be set up. Today, India has nine NPSBs that provide commercial banking services. In a relatively short period, the NPSBs have managed to achieve about 2% of the market share in terms of business, a disproportionate of 2% share of the total income and almost 17% of the total net profit earned by the banking system as a whole. This success can be attributed in large measure to the superior Quality of Services that these banks have been able to provide. Measuring Quality in the Services Sector and in particular in the Banking sector, is more difficult than measuring the quality of manufactured goods. This is mainly due to the following:
The Services Sector as a whole is very heterogeneous and what is very heterogeneous and what may hold true for one service may not hold true for another service sector. For example, the nature of banking services is very different from, say ,the nature of services provided by an airline or a hotel. Even within banking there are a variety of dissimilar services like retail banking, commercial banking, investment banking etc. This heterogeneity makes standardized service quality measurement very difficult. Most manufacturing companies, on the other hand, have been able to adopt standard measures to improve the quality of goods produced.
Services are intangible in nature and, unlike in the case of goods, there is no real product that the customer takes home. This is true of banking services and most other financial services where the service offered is only what the customer experiences fleetingly. Some service sectors like the hotel industry, the tourism indistry,etc. provide services that may be considered somewhat more tangible.
There is no scope for inspection before the service delivered. All services have a hereand-now attribute that makes standardised quality testing and control procedures
followed by manufacturing sector difficult to adopt. Unlike a good manufacturer, a bank cannot inspect its services and products to weed out unsatisfactory ones before they are presented to the customer
Unlike in the case of manufacturing companies where the goods are manufactured and then sold to customers, in the services sector, the customer is a part and parcel of the process that provides the service. The service is created with the involvement of the customer , if there is no customer there can be no service. In this sense, the customers is inseparable from the service. This is especially true of banking services, both retail and corporate. Customers are central to the banking service that is sought to be provided.
1.1.7 Major Players of Banking Industries
State Bank of India

State Bank of India (SBI) is that country's largest commercial bank. The governmentcontrolled bank--the Indian government maintains a stake of nearly 60 percent in SBI through the central Reserve Bank of India--also operates the world's largest branch network, with more than 13,500 branch offices throughout India, staffed by nearly 220,000 employees. SBI is also present worldwide, with seven international subsidiaries in the United States, Canada, Nepal, Bhutan, Nigeria, Mauritius, and the United Kingdom, and more than 50 branch offices in 30 countries. Long an arm of the Indian government's infrastructure, agricultural, and industrial development policies, SBI has been forced to revamp its operations since competition was introduced into the country's commercial banking system. As part of that effort, SBI has been rolling out its own network of automated teller machines, as well as developing anytime-anywhere banking services through Internet and other technologies. SBI also has taken advantage of the deregulation of the Indian banking sector to enter the banc assurance, assets management, and securities brokering sectors. In addition, SBI has been working on reigning in its branch network, reducing its payroll, and strengthening its loan portfolio. As of March 2011, it had assets of US$370 billion with over 13,000 outlets including 150 overseas branches and agents globally. The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on June 2, 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on April 15, 1840) and the Bank of Madras (incorporated on July 1, 1843). All three Presidency banks were incorporated as joint stock companies and were the result of the royal charters. These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they retained until the formation of the Reserve Bank of India. The Presidency banks amalgamated on January 27, 1921, and the re-organized banking entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock company.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On April 30, 1955, the Imperial Bank of India became the State Bank of India. The government of India recently acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking regulatory authority. In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, enabling the State Bank of India to take over eight former state-associated banks as its subsidiaries. On September 13, 2008, the State Bank of Saurashtra, one of its associate banks, merged with the State Bank of India. SBI has acquired local banks in rescues. For instance, in 1985, it acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in Kerala. The State Bank Group includes a network of eight banking subsidiaries and several nonbanking subsidiaries. Through the establishments, it offers various services including merchant banking services, fund management, factoring services, primary dealership in government securities, credit cards and insurance.
The eight banking subsidiaries are:

State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of India (SBI) State Bank of Indore (SBIR) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Saurashtra (SBS) State Bank of Travancore (SBT)
Products And Services
Personal Banking

SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme
Other Services

Agriculture/Rural Banking NRI Services ATM Services Demat Services Corporate Banking Internet Banking Mobile Banking International Banking Safe Deposit Locker RBIEFT E-Pay E-Rail SBI Vishwa Yatra Foreign Travel Card Broking Services Gift Cheques
Punjab National Bank

Punjab National Bank was registered on 19 May 1894 under the Indian Companies Act with its office in Anarkali Bazar Lahore. The founding board was drawn from different parts of India professing different faiths and a varied back-ground with, however, the common objective of providing country with a truly national bank which would further the economic interest of the country.
With over 60 million satisfied customers and more than 5100 offices including 5 overseas branches, PNB has continued to retain its leadership position amongst the nationalized banks. The bank enjoys strong fundamentals, large franchise value and good brand image. Besides being ranked as one of India's top service brands, PNB has remained fully committed to its guiding principles of sound and prudent banking. Apart from offering banking products, the bank has also entered the credit card, debit card; bullion business; life and non-life insurance; Gold coins & asset management business, etc. PNB has earned many awards and accolades during the year in appreciation of excellence in services, Corporate Social Responsibility (CSR) practices, transparent governance structure, best use of technology and good human resource management.
Since its humble beginning in 1895 with the distinction of being the first Swadeshi Bank to have been started with Indian capital, PNB has achieved significant growth in business which at the end of March 2011 amounted to Rs 5,55,005 crore. PNB is ranked as the 2nd largest bank in the country after SBI in terms of branch network, business and many other parameters. During the FY 2010-11, with 39.16% share of CASA to domestic deposits, the Bank achieved a net profit of Rs 4433 crore. Bank has a strong capital base with capital adequacy ratio of 12.42% as on Mar11 as per Basel II with Tier I and Tier II capital ratio at 8.44% and 3.98% respectively. As on March11, the Bank has the Gross and Net NPA ratio of 1.79% and 0.85% respectively. During the FY 2010-11, its ratio of Priority Sector Credit to Adjusted Net Bank Credit at 40.67% & Agriculture Credit to Adjusted Net Bank Credit at 19.30% was also higher than the stipulated requirement of 40% & 18% respectively. The Bank has been able to maintain its stakeholders interest by postin g an improved NIM of 3.96% in Mar11 (3.57% Mar10). The Earning per Share improved to Rs 140.60 (Rs 123.86 Mar10) while the Book value per share improved to Rs 661.20 (Rs 514.77 Mar10). Punjab
National Bank continues to maintain its frontline position in the Indian banking industry. In particular, the bank has retained its NUMBER ONE position among the nationalized banks in terms of number of branches, Deposit, Advances, total Business, Assets, Operating and Net profit in the year 2010-11. The impressive operational and financial performance has been brought about by Banks focus on customer based business with thrust on CASA deposits, Retail, SME & Agri Advances and with more inclusive approach to banking; better asset liability management; improved margin management, thrust on recovery and increased efficiency in core operations of the Bank. The performance highlights of the bank in terms of business and profit are shown below: Mar'09 Parameters OperatingProfit NetProfit Deposit Advance TotalBusiness (Rs.In Crore) 5690 3091 209760 154703 364463 Mar'10 (Rs. In Crore) 7326 3905 249330 186601 435931 Mar'11 (Rs. In Crore) 9056 4433 312899 242107 555005 CAGR(%) 26.16 19.76 22.14 25.10 23.40
Bank always looked at technology as a key facilitator to provide better customer service and ensured that its IT strategy follows the Business strategy so as to arrive at Best Fit. The Bank has made rapid strides in this direction. All branches of the Bank are under Core Banking Solution (CBS) since Dec08, thus covering 100% of its business and providing Anytime Anywhere banking facility to all customers including customers of more than 3200 rural & semi urban branches. The Bank has also been offering Internet banking services to its customers which also enables on line booking of rail tickets, payment of utilities bills, purchase of airline tickets, etc. Towards developing a cost effective alternative channels of delivery, the Bank with 5050 ATMs has the largest ATM network amongst Nationalized Banks.With the help of advanced technology, the Bank has been a frontrunner in the industry so far as the initiatives for Financial Inclusion is concerned. With its policy of inclusive growth, the Banks mission is Banking for Unbanked. The Bank has launched a drive for biometric smart card based technology enabled Financial Inclusion with the help of Business Correspondents/Business Facilitators (BC/BF) so as to reach out to the last mile customer.
The Bank has started several innovative initiatives for marginal groups like rickshaw pullers, vegetable vendors, dairy farmers, construction workers, etc. Bank has launched a welfare scheme of adoption of village viz., PNB VIKAS. Under the scheme, Bank has selected 117 villages (60 in lead districts and 57 in non lead district) in different circles for all-round improvement in the living standards of the villagers. Besides, Bank has formed PNB PRERNA, an association of the wives of the Banks senior management. The association through its voluntary initiatives has undertaken activities like distribution of food to the poor and needy, provision of computers, books, stationary items to poor girl students at various orphanages and schools etc.
Backed by strong domestic performance, the Bank is planning to realize its global aspirations. Bank has opened one branch each at Kabul and Dubai, two branches at Hong Kong and an Off Shore Banking Unit at Mumbai. In addition to the above, Bank has Representative offices at Almaty, Dubai, Shanghai and Oslo, a wholly owned subsidiary in UK with 7 branches and a subsidiary each in Kazakhstan & Bhutan, and joint venture with Everest Bank Ltd. Nepal. During the year, Bank acquired majority equity stake of 63.64% in Dana Bank of Kazakhstan.
I.C.I.C.I. Bank
ICICI is an Indian diversified financial services company headquartered in Mumbai, Maharashtra. It is the second largest bank in India by assets and third largest by market capitalization. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank has a network of 2,630 branches and 8,003 ATM's in India, and has a presence in 19 countries, including India. ICICI Bank had total assets of Rs. 4,062.34 billion (US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the year ended March 31, 2011. The bank has subsidiaries in the United Kingdom, Russia, and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The company's UK subsidiary has established branches in Belgium and Germany.ICICI Bank is one of the big four banks of India, along with State Bank of India, Punjab National Bank and HDFC Bank. Products & Services
Personal Banking

Deposits Loans Cards Investments Insurance Demat Services Wealth Management
NRI Banking

Money Transfer Bank Accounts

Investments Property Solutions Insurance Loans
Business Banking

Corporate Net Banking Cash Management Trade Services FXOnline SME Services Online Taxes Custodial Services
H.D.F.C. Bank
HDFC Bank is an Indian financial services company that was incorporated in August 1994. HDFC Bank is the fourth largest bank in India by assets and the second largest bank by market capitalization as of February 24, 2012. The bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank is headquartered in Mumbai .HDFC Bank has 1,986 branches and over 7,110 ATMs, in 996 cities in India, and all branches of the bank are linked on an online realtime basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion. For the fiscal year 2010-11, the bank has reported net profit of Rs.3,926.30 crore (US$783.3 million), up 33.1% from the previous fiscal. Total annual earnings of the bank increased by 20.37% reaching at Rs.24,263.4 crore (US$4.84 billion) in 2010-11. HDFC Bank is one of the big four banks of India, along with: State Bank of India, ICICI Bank and Punjab National Bank. HDFC Bank deals with three key business segments. - Wholesale Banking Services, Retail Banking Services, Treasury.
Wholesale banking services Blue-chip manufacturing companies in the Indian corp to small & mid-sized corporates and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. Retail banking services HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (Visa Electron) and issues the Master card Maestro debit card as well. The Bank launched its credit card business in late 2001. By March 2009, the bank had a total card base (debit and credit cards) of over 13 million. The Bank is also one of the leading players in the merchant acquiring business with over 70,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is positioned in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc. With Finest of Technology and Best of Man power in Banking Industry HDFC bank's retail services have become by and large the best in India and since the contribution to CASA i.e total number of current and savings account of more than 50% ,HDFC bank has full potential to become Indias No.1 Private Sector Bank. HDFC Bank website including hdfcbank.com and hdfcsec.com are not available 24X7. This has become a habit of HDFC Bank. Customers of the HDFC Bank are requested to check the website availability 24 X 7 and if available can do the transaction.
Treasury Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. These services are provided through the bank's Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio.
Products & Services
Personal Banking

Savings Accounts Salary Accounts Current Accounts Fixed Deposits Demat Account Safe Deposit Lockers Loans Credit Cards Debit Cards Prepaid Cards Investments & Insurance Forex Services Payment Services Net Banking Insta Alerts Mobile Banking Insta Query ATM Phone Banking
NRI Banking

Rupee Savings Accounts Rupee Current Accounts Rupee Fixed Deposits Foreign Currency Deposits Accounts for Returning Indians Quickremit (North America, UK, Europe, Southeast Asia) IndiaLink (Middle East, Africa) Cheque Lock Box

Telegraphic / Wire Transfer Funds Transfer through Cheques / DDs / TCs Mutual Funds Private Banking Portfolio Investment Schemes Loans Payment Services Net Banking Insta Alerts Mobile Banking Insta Query ATM Phone Banking
Chapter 2 Literature Review
2. Literature Review
1. Article:
Service quality in the banking industry: an assessment in a developing economy
Journal:
International Journal of Bank Marketing Vol. 17 No.3 , pp. 116-125.
Authors:
Madhukar G. Angur, Associate Professor of Marketing, School of Management, The University of Michigan-Flint, Flint, Michigan, USA Rajan Nataraajan, Associate Professor of Marketing, Auburn University, Auburn, Alabama, USA John S. Jahera Jr, Colonial Bank Professor of Finance, Auburn University, Auburn, Alabama, USA
Regulatory, structural, and technological factors are significantly changing the banking environment throughout the world. It is within this rapidly changing environment that customer satisfaction and service quality are compelling the attention of all banking institutions. Although the concepts of customer satisfaction and service quality are obviously related, the focus of this paper is only on service quality. Perceived quality of service tends to play an important role in high involvement industries like banking services. Banks have traditionally placed a high value on customer relationships with both commercial and retail customers. However, the nature of the customer relationship is changing, particularly on the retail side of banking. The purpose of this research is to examine the performance of alternative measures of service quality proposed by Cronin and Taylor (1992) in an international setting, and particularly in a developing economy, India. The four alternative measures of service quality used by Cronin and Taylor (1992) were the SERVQUAL scale, importance weighted SERVQUAL, the SERVPERF scale, and importance weighted SERVPERF. The
applicability of these four alternative measures of service quality is assessed in the context of the banking industry in India. Confirmatory factor analysis using LISREL 8 (Jreskog and Srbom, 1993) was used to test for the generalizability of the five-factor conceptualization of service quality (Parasuraman et al., 1988). Exploratory factor analysis using the OBLIMIN oblique factor rotation procedure (using SPSS-X) was also conducted on the SERVQUAL and SERVPERF items to determine if the service quality concept was multidimensional. Further, convergent and discriminant validities of the SERVQUAL and SERVPERF scales were tested using correlation analysis of the alternative measures used. Stepwise regression analysis was used to assess the predictive ability of the alternative measures of service quality. In other words, responses to the 22 expectation and performance statements were regressed (in each of the four cases of alternatives measures of service quality) with the directly measured overall service quality. Finally, the mean performance (SERVPERF) and performance-minus-expectation (SERVQUAL) gap scores for the two banks used in the study were computed to assess their diagnostic value. Based on data gathered from customers of two major banks, overall results support a multidimensional construct of service quality and suggest that the SERVQUAL scale provides greater diagnostic information than the SERVPERF scale. However, the five-factor conceptualization of SERVQUAL does not seem to be totally applicable, and no significant difference was found in the predictive ability of the two measures. Further, although SERVQUAL and SERVPERF have identical convergent validity, SERVPERF appears to have higher discriminant validity than SERVQUAL.
2 Article: Comparative Study of Customer Satisfaction in Indian Public Sector and Private Sector Banks Journal: International Journal of Engineering and Management Sciences. I.J.E.M.S., Vol.1(1) , pp. 42-51 Author: Puja Khatri and Yukti Ahuja School of Management Studies, Guru Gobind Singh Indraprastha University, Kashmiri gate, Delhi, India Jagan Institute of Management Studies, 3, Institutional area, sector 5, Rohini, Delhi 85, India
With the advent of liberalization policy and RBIs easy norms several private and foreign banks have entered in Indian banking sector which has given birth to cut throat competition amongst banks for acquiring large customer base and market share. Banks have to deal with many customers and render various types of services to its customers and if the customers are not satisfied with the services provided by the banks then they will defect which will impact economy as a whole since banking system plays an important role in the economy of a country, also it is very costly and difficult to recover a dissatisfied customer. Since the competition has grown manifold in the recent times it has become a herculean task for organizations to build loyalty, the reason being that the customer of today is spoilt for choice. It has become imperative for both public and private sector banks to perform to the best of their abilities to retain their customers by catering to their explicit as well as implicit needs. Many a times it happens that the banks fail to satisfy their customer which can cause huge losses for banks and there the need of this study arises. The purpose of this study is to compare the public sector banks and private sector banks in terms of customer satisfaction and to study the various variables of service quality using servqual model. The work has been carried out with the objective of understanding the reasons of customer dissatisfaction and what are the opportunity areas wherein these banks need to focus and strengthen their Customer Relationship Management practices. The research work uses both the sources of information, i.e. Primary and Secondary sources, and thereafter SERVQUAL model has been used to identify the discrepancy in the service
delivery system. Finally the study concludes by giving some recommendations to improve in the area where these banks do not meet the expectation of their customers. The commercial Banks in India comprise both public sector as well as private sector banks. In an initiative towards bringing about reforms in the financial sector, overall development in the economy along with reforms in industry, trade, taxation, external sector, banking and financial markets have been carried out since mid 1991. It took almost 10 years for the Indian economy to strengthen its footing and bring about a sea change in the way financial institutions in the country work today. It is because of the sustained and gradual pace of reforms that has helped us in avoiding any crisis and has actually fuelled growth. As pointed out in the RBI Annual Report 2001-02, GDP growth in the 10 years after reforms i.e. 199293 to 2001-02 averaged 6.0% against 5.8% recorded during 1980 81 to 1989-90 in the prereform period. After almost 7% growth in 2008/09 fiscal year, in the first three months of 2010 India's economy expanded 8.6% boosted by industrial production and services. According to a compilation of facts done by India Brand Equity Foundation, the RBI has the tenth largest gold reserves in the world after spending US$ 6.7 billion towards the purchase of 200 metric tonnes of gold from the International Monetary Fund (IMF) in November 2009. The purchase has increased the country's share of gold holdings in its foreign exchange reserves from approximately 4 per cent to about 6 per cent. In the annual international ranking conducted by UK-based Brand Finance Plc, 20 Indian banks have been included in the Brand Finance Global Banking 500. In fact, the State Bank of India (SBI) has become the first Indian bank to be ranked among the Top 50 banks in the world, capturing the 36th rank, as per the Brand Finance study. ICICI Bank also made it to the Top 100 list with a brand value of US$ 2.2 billion. Following the financial crisis, new deposits have gravitated towards public sector banks. According to RBI's 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks: September 2009', nationalized banks, as a group, accounted for 50.5 per cent of the aggregate deposits, while State Bank of India (SBI) and its associates accounted for 23.8 per cent. The share of other scheduled commercial banks, foreign banks and regional rural banks in aggregate deposits were 17.8 per cent, 5.6 per cent and 3.0 per cent, respectively. Foreign exchange reserves were up by US$ 1.69 billion to US$ 272.783 billion, for the week ending June 11, on account of revaluation gains. In this era of mature and intense competitive pressures, it is imperative that banks maintain a loyal customer base. Increasing competition from both inside and outside the country is leading to compression of profits and forcing banks to work efficiently only with the available resources. One positive fallout of competition is the greater choice available to consumers, and the increased level of
sophistication and technology in banks. In order to achieve this and improve their market and profit positions, Study of customer satisfaction in public sector and private sector banks of India many retail banks are directing their strategies towards increasing customer satisfaction and loyalty through improved service quality. As banks benchmark themselves against global standards, there has been a marked increase in disclosures and transparency in bank balance sheets with a greater focus on corporate governance. Though banks have become quality conscious in providing their services, they are still struggling with resisting to change. The seller market mindset is yet to be changed coupled with fear of uncertainty and control orientation. Acceptance of technology is slowly creeping in but the utilization is not maximized. In terms of workforce management, placing the right skill at the right place will determine success for the banks. For most of the public sector bank employees it is difficult to cope up with the customer requirements because they are yet to learn the customer centric orientation in work. The competency gap needs to be addressed simultaneously otherwise there will be missed opportunities. The focus of people will be on doing work but not providing solutions, on escalating problems rather than solving them and on disposing customers instead of using the opportunity to get more business. Once the service quality dimensions that lead to customer satisfaction are identified, service managers should be able to improve the delivery of customer perceived quality during the service process and have greater control over the overall outcome. It is for these reasons why practices of customer relationship management, assessment of customer lifetime value, relationship marketing are gaining ground. Along with it the measurement of quality which is provided at the banks is becoming the sole reason behind preferring one brand over the other. Many of these new private sector banks have brought with them state-of-the-art technology, have built up on modern infrastructure, a wide network of branches, shown superior standards in productivity, encouraged several global practices. The most significant achievements have been in the field of recruiting, training the right set of individuals who possess the suitable skills for the jobs at bank and have created a place for themselves along with attaining a large share in the financial market within a short span of time. The success of most of the private sector banks can be attributed to their proactive measures with respect to their relationship with the customer. This has compelled the public sector banks to do some introspection and work towards understanding the changing demands of the customer and equip themselves in order to cater to the growing expectations of the customer. Some of the public sector banks having understood the urgency to mend their ways, have either changed or perished from the market. They have tried to incorporate superior standards in productivity and are making constant
efforts to adapt to the changing environment with key focus on customer relationship management. This research mainly focuses on studying about both customer perception and expectation of services provided by public and private sector banks to draw a comparison between the two using the servqual model. The Indian banking sector has witnessed heightened competition with so many banks coming up with all their potential and using their global strength to their advantage in order to establish themselves in the market. Private Banks seem to have satisfied its customers with good services and they have been successful in retaining its customers by providing better facilities than Public sector banks. But, still Private Banks need to go a long way to become customers first preference. In an economy of innovative technologies and changing markets, each and every service quality variable has become important. New financial products and services have to be continuously introduced in order to stay competent. Success mantra could be customer centric orientation, where the organization builds long term strategic relationships with its customers and Private sector Banks have been successful in achieving such relationship with customers however public sector banks have to improve in this area. Private Banks need to concentrate more on their credit facilities and insurance services since customers do not have a very good opinion about these facilities being offered by Private Banks. Public sector banks enjoy the trust of the customers, which they have been leveraging to stay in the race however they need to improve their service quality by improving their physical facility, infrastructure and giving proper soft skill trainings to their employees.
3. Article: Journal:
E-Banking Service Quality Based on Service Gaps Research on E-Banking Service Quality Based on Service Gaps
As Internet technology continues to mature and widely used, internet banking which has especial characters Portals have played a more and more important role in Banks operation. In the absence of direct communication network environment, service quality has become a key factor of internet banking reflecting the differentiation and competitive advantage. Currently many problems restricted the internet banking service quality improvement, such as the homogenization of the product, capital flow and information flow security risks under control, not enough propaganda, the lack of legal protection and other issues are very prominent. This paper is aimed through the service gap analysis, to establish a customercentric internet banking service gaps model, and through the implementation of this model to enhance banking services in order to achieve the quality of customer service and meet the demands of the reality of purpose, so as to promote Internet banking sustainable and healthy development. Firstly, this paper through the analysis of the current development of internet banking services, propose internet banking service quality research background and significance, and systematically explain the research ideas and research methods. Then, from the existing literature research of service quality management theory and service remedy, etc., which lay a theoretical foundation for this paper. Secondly, through this paper analyzed specific reasons of the PZB service gap model of cognitive service agencies gap, gap of formulating the standard of service, service trade gap and service marketing gap, the characteristics of Internet banking services in China conclude the impacting factors of Internet banking service quality. Again, this paper constructes internet banking service gaps model, and explain the relationship between the various parts of the model parts. On this basis, this paper proposes implementation of Internet banking gaps model from the internet banking system design, product design and service recovery system design three aspects and the organization security measures to enhance the internet banking service quality. Finally, the bank of China, online banking, for example, analyzes its quality management strategy and implementation effect, to Support the conclusion of this paper. This article innovations: First, contrast with previous research about internet banking service quality, which analysis from the process service transactions, this paper based on the entire service delivery process from perceived customer expectations to the service provide, from customer expectations and
customer perceptions two aspects systematically analyzed the effect factors of the Internet banking services quality. Secondly, the establishment of internet banking service gaps model, which blends customer perceptions and customer expectations of service quality factors in the service gap model; according to service recovery and customer satisfaction research, in the model by adding service recovery factors; Internet banking service quality management is a closed system the feedback of customer perception service quality will further affect the manager cognition of customer expectations. Finally, from system design, product design, the design of service recovery to implement service gaps model, and by establishing excellent enterprise culture, improving the financial service personnel quality, organization structure adjustment to smooth communication channels, perfecting laws and regulations as organizational guarantee.
4. Article:
Service Quality Scale Development in Indian Retail Banking Sector: An Empirical Investigation.
Journal: Author:
Journal of Applied Sciences, 7: 766-771. J.Clement Sudhahar and M. Selvam
The time has arrived for a re look on the research literature on service quality as the SERVQUAL instrument forms the basis on which all other works have been actualized. Interestingly, over the years, the conceptualization, measurement and applications of SERVQUAL across different industrial and commercial settings are not bereft of controversies. The current research work strives to bring to light some of the critical determinants of service quality that have been overlooked in the earlier models and proposes a revised comprehensive model and an instrument framework for measuring customer perceived service quality. Data for this study has been collected from customers of Indian retail banking sector. The present study offers a systematic procedure that could form the cornerstone for providing further insights on the conceptual and empirical comprehension of customer perceived service quality and its constituents. The business environment in the last decade has faced a paradigm shift, with quality consistently being considered as one of managements top-most competitive priorities and a prerequisite for sustenance and growth. Quality is proposed as the most potent tool for enhanced business performance (Corbett et al., 1998). In todays world of fierce competition, rendering quality service is a key for subsistence and success (Parasuraman et al., 1985, 1988; Zeithaml et al., 1998, 1990; Cronin and Taylor, 1992, 1994; Teas, 1993a,b; Berry et al., 1983, 1985, 1994; Zeithaml et al., 1996). The cardinal accent of both academia and business focused essentially on ascertaining the customers perceptions of service quality and subsequently contriving strategies to meet and surmount customer expectancies. But most of these efforts have drawn more criticisms than acceptance by a large section of seasoned researchers.In this background, the current research work aspires to develop an empirical model of service quality that could form the basis for a better understanding of the determinants of customer perceived service quality.Therefore, the basic objective of this paper is to develop and purify the scale for measuring service quality.In the tough competitive milieu, measurement of service quality has increasingly created an interest among the service providers and the scholars alike. It is so because service
quality is being used to position their respective products in the market place (Stephen and Swartz, 1989). The different service quality models that have been developed to measure the quality of services in chronological order are as follows: The SERVQUAL Model (Parasuraman et al., 1985). The SERVQUAL Model (Parasuraman et al., 1988). The SERVPERF Model (Cronin and Taylor, 1992). The Human-Societal Element Model (Sureshchandar et al., 2002a, b), Parasuraman et al., (1985, 1988, 1990,1991a, 1993,1994a) have coined the concept of measuring service quality very popularly referred to as SERVQUAL Model. They have started the unending journey of conceptualizing the measurement of service quality in 1985 with ten service quality dimensions, later on the customers perception and expectation regarding the service was filtered and refined to five major service quality dimensions, as follows; tangibles, reliability, responsiveness, assurance and empathy. Again the five major service quality dimensions were refined further and fine tuned by changing the statements to get more reliable and valid results but same criteria is used to check the psychometric properties of the SERVQUAL scale. All new models and any new theories will always prone to criticisms similarly the SERVQUAL model also widely criticized on different times by different authors. It is limited to one sector say banking alone; the score is biased because of wrong terminology used in the statements. Mostly it has preoccupied the psychometric and methodological soundness of scales. Cronin and Taylor (1992) commented on, that it is unnecessary to measure customer expectations in service quality research. Cronin and Taylor (1994) contended that measuring perceptions is sufficient they contend. SERVQUAL model is based on Disconfirmation Paradigm, which is not suitable for services and Teas (1993a,b) commented on interpretation and operationalization of the expectations standard. The strong critiques of SERVQUAL model were Cronin and Taylor (1992), they had developed a new model and was popularly called as SERVPERF model. Their conceptualization of service quality model is, based on the performance component alone. They proposed what is popularly referred to as the SERVPERF scale. It is a single item scale. They have developed their model based on Performance Model Satisfaction over the Disconfirmation Paradigm used by the SERVQUAL scale. They have reduced the number of items to be measured but they have used the same service quality dimensions of SERVQUAL
viz., tangibles, reliability, responsiveness, assurance and empathy. The critique of this SERVPERF model is, it is preoccupied with psychometric and methodological soundness of scales. It is used and tested only in developed nations. The Human-Societal Element Model (Sureshchandar et al., 2001a, b and 2002a) was developed with a view to overcome the drawbacks of SERVQUAL scale as the SERVQUAL Instrument does not address certain important constituents of service quality, like service product or core service and systematization /standardization of service delivery. This model conceptualizes customer-perceived serviced quality based on the following five service quality dimensions they are; Core service or Service Product, Human element of Service Delivery, Systematization of Service Delivery, Tangibles of Service and Social Responsibility. In this background, the current empirical research work strives to bring to light some of the critical determinants of service quality that have been overlooked in the Sureshchandar et al. (2002b) and proposes a revised comprehensive model and an instrument framework for measuring customer perceived service quality. The instrument has been designed with specific reference to the banking sector. Data have been collected from customers of Indian banking sectors. The proposed instrument has been empirically tested for unidimensionality, reliability and constructs validity. The present study offers a systematic procedure that could form the cornerstone for providing further insights on the conceptual and empirical comprehension of customer perceived service quality and its constituents. Finally suggests the future research directions so as to develop country and industry specific SQ models. Service researchers of late attach paramount importance to the study and measurement of service quality as the crux of services marketing is solely dependent on customers perception of quality and their satisfaction. While in numerous studies have been conducted right across the world using different models for the measurement of service quality, the authors have found only a handful of studies have been attempted in a developing country like India. Apart from this, the changing situational and economic factors necessitate the need to develop an exclusive scale for measuring the service quality in Indian context, considering the cultural norms, values and ethos shared by corporate and the Indian consumers at large. Though this inventory is empirically tested with the retail banking customers of India, the authors of this research paper exhort that this scale can be used by service researchers of any developing economy endeavouring to measure service quality of any service sector.
5. Article: Service Quality Perspectives and Customer Satisfaction in Commercial Banks working in Jordan
Author:
Anber Abraheem Shlash Mohammad Assistant Professor, Marketing Department Petra University, Jordan Shireen Yaseen Mohammad Alhamadani Assistant Professor, Finance and Banking Department Petra University,
The aim of this research was to examine the level of service quality as perceived by customers of commercial bank working in Jordan and its effect customer satisfaction, Service quality measure is based on modified version of SERVQUAL as proposed by Parasuraman et al. (1988), which involve five dimensions of Service quality, namely Reliability, Responsiveness, Empathy, Assurance, and Tangibles. Customer satisfaction was measured by a nine item adapted from Walfried et al. (2000), 260 questionnaires were distributed randomly to customers of commercial banks branches located (thirteen commercial banks in Jordan ) in IRBID (A city of Jordan ). Multiple regression analysis was employed to test the impact of service quality on customer satisfaction. The results of this study indicated that service quality is an important antecedent of customer satisfaction. It is apparent from the present study that managers and decision makers in Jordanian commercial banks to seek and improve the elements of service quality that make the most significant contributions on customer satisfaction. Quality is such an important issue that it is considered a really significant concept in our real life. It is regarded as a strategic organizational weapon. And the pressing need of developing service organizations and upgrading their services necessitates the measuring of service quality. These assets in checking the quality progress and providing bases for improving it. As a result of economic changes throughout history, the concept of 'quality' has changed. 'Quality' comes from the Latin word 'Qualitas', which refers to the nature of a person or the nature of an object. In the past Quality meant accuracy and perfection (Al-Dararkah, 2002). Crosby (1981) defined Quality as consistency with fixed specifications and this agrees with Karim's definition (1996), who defined Quality as anything that accords with the characteristics of the product to meet the external clients' needs. In addition, the product quality differs from that of a service as the earlier is tangible, whereas the latter is intangible.
Service is also defined differently. The American Society for Marketing, for example, defines service as activities or benefits that are offered for sale, or that are offered for being related to a particular product. Kotler (2003), defined service as 'any behaviour or act based on a contact between two parties: the provider and the receiver, and the essence of this reciprocal process in intangible. Hakesver (2000) looked at service as a set of economic activities that provide time, location form and psychological benefits. Beer (2003) defined service as a set of characteristics and overall properties of the service which aim to satisfy the clients and meet their needs. Mohamed & Shirley (2009) emphasized that banks have to care about the quality of their services since this quality is considered the essence or core of strategic competition. Walfried, et. al. (2000) defined service as a set of characteristics that meet the clients' needs, strengthen the links between the organization and them, and enhance the clients' value as well. Huseyin, et. Al. (2005) believes that good knowledge of the characteristics and advantages of service quality on the part of banks do contribute for their success and their persistence in the international banking competitive environment. From these definitions we conclude that the quality of banking service is an integrative assessment of the services offered to the external client, for clients are considered to be independent individuals with various requirements on the basis of which services are provided, based on certain specification. This requires that banks have to carefully select creative employees with high qualifications and capabilities. Parasurama Zeltham, I & Berry that there exist ten criteria and dimensions through which service quality can be assessed: Reliability: the ability of an organization to accurately achieve its services in the proper time and according to the promises it has made to its clients. Responsiveness: the tendency and willingness of service providers to help clients and satisfy their needs, immediately reply to their inquiries, and solve their problems as quickly as possible. Competence: having adequate skills and knowledge that enable the employees to perform their jobs properly. Accessibility: providing easy access to a service in terms of location and through services provided via the telephone, the internet, or any other means of communication. Courtesy: treating clients respectfully in a polite friendly manner, understanding their feelings, and answering their phone calls gently. Communication: this occurs through gentlemanly listening to the client conveying information to them clearly and facilitating external communication with workers.
Credibility: this can be achieved through full trust and confidence in the service provider as well as his honesty and straight forwardness. Security: this depends on whether the service is free from risks and hazards, defects or doubts so that it provides bodily safety, financial security as well as privacy. Understanding/ knowing the customer: this can be made achievable through the ability to pinpoint the customers' needs as well as understanding their individual problems. Tangibility: this includes physical aspects connected with service such as instruments and equipment, persons, physical facilities like buildings and nice decoration and other observable service facilities. The above-mentioned ten dimensions have been integrated into only five ones. Researchers agreed on the fact that these dimensions are appropriate ones which help reveal the customers' expectations and perception. This new model is called 'Servqual'. This compound word consists of the two words 'Service' and 'Quality', these five dimensions include: 1. Tangibility: this includes physical facilities, equipment, and the physical appearance of on employee. 2. Reliability: this refers to the ability to provide the exact required service according to given specifications and conditions. 3. Responsiveness: the inclination and willingness of the employees to serve customers quickly and properly. 4. Assurance: feelings of trust and confidence in dealing with the organization. This reflects the workers' knowledge and experience and their ability to build self confidence as well as confidence in the customers themselves. 5. Empathy: understanding the customers' personal needs, taking care of them individually and showing them all sorts of sympathy and affection, looking at them as close friends and distinguished clients. Al-Allaq & Al-Ta'ii see that tangibility, reliability and responsiveness are constant dimensions, whereas; the criterion of 'Assurance' includes courtesy, reliability and security. As for as 'Empathy' is concerned, it includes elements like providing service in terms of place, time, communication, and to what extent the service provider understands the beneficiary. Gronroos, however, believes that tangibility, assurance and empathy can be classified as being functional dimensions of service quality, while responsiveness and reliability can be classified as being technical dimensions. There are two major approaches to creating and deciding on a model to measure service quality: the directional approach, a concept which is connected with satisfaction but not equivalent to it, and connected with the
customers' perceptions of the actual performance of the service provided. This approach supports the fact that satisfaction is a psychological state prior to giving judgment on the quality of service. Service quality as perceived by customers definitely indicates what is left of their previous perception of the service quality and the level of their satisfaction with the current performance of the service. This means that satisfaction is an intermediary factor between the previous perceptions of the service quality and the present perception of it. Accordingly, and within this general framework, customers can access the service actual quality provided to them (Mualla, 1997). Hence, the customer's satisfaction with the actual performance level of service has a further impact on the formation of the customers' perceptions of service quality. And one the service is purchased again, satisfaction becomes a major approach to the process of assessing service quality (Mualla, 1998). This study depends on this very approach the measurement of actual performance which is termed 'SERVPERE' (Joseph, et. al., 1992). The other approach, called the Gap Approach, or 'SERVQUAL' model developed by (Parasuraman, et. al.1988) is based on the customers' expectations of the service level and their perceptions of the actual service performance level. So the axis of this model is represented by the gap between the customers' perceptions of the actual service performance level and their expectations of the service quality. This gap, in turn, depends on the nature, design and provision of this service. The major objective of 'SERVQUAL' model is to clarify the series of gap which affect the beneficiary's perception of service quality; that is, the four previously mentioned gaps which occur in the administrative aspect. The nature of banking services encourages customers to demand the highest possible quality. In order to achieve this, it is essential to be very close to customers to capture information on customer current and future needs, expectations and perceptions. The main objective of this study was to examine the effect of service quality on customer satisfaction. This study posits and develops an instrument of service quality, and examines the relationship between perceived service quality and customer satisfaction From various studies, SERVQUAL appears to be a consistent and reliable scale to measure banking service quality, and provide a useful diagnostic role to play in assessing and monitoring service quality in banks. The measurement of Banks service quality has to be based on perceived quality. It is because service quality is intangible, heterogeneous and its consumption and production occur in tandem (Lim and Tang, 2000). This research also drew conclusions and gave suggestions. The research results are expected to provide guidance and reference for the management of commercial banks in Jordan.
The results of this study indicated that service quality is an important antecedent of customer satisfaction this result consistent with results drawn(Andaleeb and Conway, 2006; Gotlieb et al., 1994; Buttle, 1996; Zeithaml and Bitner, 1996; Lee et al., 2000; Zeithaml and Bitner, 2003 ). Five dimensions of service quality have significant influence on customer satisfaction. These dimensions include tangibles, reliability, responsiveness, assurance, and empathy. Moreover, our findings show that service quality is an important antecedent of customer satisfaction. This finding reinforces the need for banks managers to place an emphasis on the five dimensions of service quality.
6. Article: Customer Satisfaction with Service Quality in Conventional Banking in Pakistan: The Case of Faisalabad. Journal: Author: International Journal of Marketing Studies, Vol.3, No.4 Salman Khalid (Corresponding author) School of Management Studies, University of Faisalabad, Pakistan Babak Mahmood Department of Sociology, University of Sargodha, Pakistan Muzaffar Abbas School of Management Studies, The University of Faisalabad, Pakistan
The purpose of this study is to evaluate the customer satisfaction of banking industry in Pakistan general, and Faisalabad particular, based on various levels of customer perception regarding service quality. This is an empirical study based mainly on primary data collected through a well-structured questionnaire. The questionnaire has been personally administrated on the a sample size of 132, chosen respondents on a convenient basis from four Pakistani banks, i.e. Alfalah Bank Limited, Faysal Bank Limited, National Bank Limited, and The Bank of Punjab. This paper makes a useful contribution as there are only few studies dealing with the assessment of service quality in conventional banking sector of Pakistan .The result indicates that customer perceive highest satisfaction in the responsiveness area and lowest in the tangibles area. In order to achieve higher levels of service quality, the bank managers should redesign their strategies about customer satisfaction with respect to service quality.
In services industries, the subject of service quality globally remains a critical one as service providers strive to maintain a comparative advantage in marketplace. Financial services in general, particularly banks; compete in marketplace with generally undifferentiated services and products, thereby service quality becomes a key competitive weapon (Stafford, 1996). A banking organization can only differentiate itself from competitors by providing high quality services. It is true that structural changes have resulted in banks to perform a greater range of activities, and enabling them to become more competitive with non-bank financial institutions (Angur et al., 1999). Presently, technological advancements are causing banks to revise their strategies for services offered to both individual and commercial customers. Furthermore, banks that excel in quality services can have distinct marketing edge since improved levels of service quality are related to higher revenue, higher customer retention, higher cross-sell ratios (Bennett & Higgins, 1993), and increased market share (Bowen & Hedges, 1993). In addition, the banks understand that customer will be loyal if they can produce greater value than their competitors (Dawes & Swailes, 1999). Moreover, higher profits will be earned by banks if they can position themselves better than competitors within a specific market (Davies et al., 1995). Hence, banks should focus on service quality as a core competitive strategy (Chaoprasert & Elsey, 2004). Therefore, customer satisfaction and service quality have become the focal point of all banking institution around the world (Hossain & Leo, 2009), and Pakistan is not an exception. Pakistani banking sector is continuously expanding and improving with diversified patterns of ownership due to an active participation of local and foreign stakeholders. The Pakistani banking sector comprises of a State Bank of Pakistan (SBP), which is central bank of country and a combination of local and foreign banks. A total of 53 banks currently are operating in Pakistan, five of which are publicly owned (First Women Bank Limited, National Bank of Pakistan, Sindh Bank Limited, The Bank of Khyber, and The Bank of Punjab), including four specialized banks (Industrial development Bank of Pakistan, SME Bank Limited, The Punjab Provincial Cooperative Bank Limited, and Zarai Taraqiati Bank Limited), seventeen private banks (Allied Bank Limited, Askari Bank Limited, Bank Alfalah Limited, Bank Al Habib Limited, Faysal Bank Limited, Habib Bank Limited, Habib Metropolitan Bank Limited, JS Bank Limited, KASB Bank Limited, MCB Bank Limited, NIB Bank Limited, SAMBA Bank Limited, SILKBANK Limited, Soneri Bank Limited, Standard Chartered Bank (Pakistan) Limited, Summit Bank Limited, and United Bank Limited), five Islamic Banks (AlBaraka Bank (Pakistan) Limited, BankIslami Pakistan Limited, Burj Bank Limited, Dubai Islamic
Bank Pakistan Limited, and Meezan Bank Limited), also represented are the local branches of six foreign banks (including Barclays Bank PLC, Deutsche Bank AG- Pakistan Operations, Citibank N.A.- Pakistan Operations, HSBC Bank Middle East Limited Pakistan Operations, Oman International Bank S.O.A.G Pakistan Operations, and The Bank of Tokyo-Mitsubishi UFJ Limited Pakistan Operations), eight micro finance banks (KASHF Microfinance Bank Limited, Khushhali Bank Limited, Network Microfinance Bank Limited, NRSP Microfinance Bank Limited, Pak Oman Microfinance Bank Limited, Rozgar Microfinance Bank Limited, Tameer Micro Finance Bank Limited, and The First Micro Finance Bank Limited), and eight development finance institutions (House Buliding Finance Company Limited, Pak Brunei Investment Company Limited, Pak-China Investment Company Limited, PAIR Investment Company Limited, Pakistan Kuwait Investment Company Limited, Pak Libya Holding Company Limited, Pak Oman Investment Company Limited, and Saudi Pak Industrial & Agricultural Investment Company Limited) (www.sbp.org.pk). Moreover, as their current and saving accounts, all the commercial banks in Pakistan offer the same range of standard facilities you would expect to find anywhere in the world including, debit cards, credit cards, travelers cheques, money transfers, personal loans, vehicle loans, etc. selected banks also offer specialized services such as VIP accounts, ladies accounts, children and students accounts, plus e-banking platforms such as telephone and PC banking which offer 24/7 access. Particularly, the expansion in private banking business, along with customized services, has created a cut-throat competition in this sector (Khalid & Irshad, 2010). Without any doubt, service quality is gaining more importance in banking industry (Munusamy et al, 2010). Both the marketing and service management literatures suggest that there is strong theoretical underpinning among customer satisfaction, customer loyalty and profitability (Hollowell, 1996). Levesque & McDougall (1996) pointed out that customer satisfaction and retention are critical for retail banks, and investigate the major determinants of customer satisfaction (service quality, service features, situational factors and customer complaint handling), and future intentions in the retail bank sector. Bloemer et al. (1998) explore how image, perceived service quality and satisfaction determine loyalty in a retail bank. Armstrong & Seng (2000) analyze the determinants of customer satisfaction in the banking industry (purchase intentions, transactional paradigm, and fairness (equity). The study of Lassar et al. (2000) examines the effects of service quality on customer satisfaction from two distinct methodological perspectives technical/functional quality and SERVQUAL. Jamal & Naser (2002) suggest that customer satisfaction is based not only on
the judgment of customers towards the reliability of the delivered service, but also with customers experiences with the service delivery process. Therefore, they report demographic differences (education, gender and income levels) in the degree of customer satisfaction. Hence, customer satisfaction with commercial and retail banking is composed of a wide variety of dimensions. Thus, consumer satisfaction thus (delete it) reveals the general evaluation of the actions carried out by a given business in relation to expectations accumulated after various contact between the consumer and business (Bitner & Hubber, 1994). If customers perceive that they are obtaining additional benefits from their relationship with establishment employees, their satisfaction level with the service provider will increase (Beatty et al., 1996). Relational benefits can then be considered as important factors for customer satisfaction with financial businesses. Therefore, relational benefits mean special treatment, social benefits and confidence, which were investigated by Gwinner et al. (1998), would have a strong influence on customer satisfaction with their habitual establishments.
The above discussion indicates that customer satisfaction vary according to the nature of service. In this case, the highest customer satisfaction is demonstrated in the responsiveness area such as willingness to help customer, friendly attitude of staff, followed by the reliability area such as customer guidance, customer support. On the other hand, the moderate satisfactions are in the tangibles area, such as infrastructure facilities, dcor, followed by empathy area such as banks business timing and return on investment. Due to the wide variation of the responses, both public and private banks need to consider the weak areas in order to meet customer requirements. Hence, to be successful in banking sector, banks must provide service to their customer that at least meets or better if exceeds their expectations, and the present study will provide some sort of guidelines to the policy makers (managers) of banks to take appropriate decision to improve the quality of services in Pakistani banking sector.
7. Article:
Customer Perception on Service Quality in Retail Banking in Developing Countries
Journal: Author:
International Journal of Marketing Studies, Vol.4, No.1 Md. Abdul Muyeed (Associate Professor) Department of Economics, Islamic University, Kushtia 7003, Bangladesh
The purpose of this study is to evaluate the service quality in retail banking in the developing countries in general, and Bangladesh in particular. This is an analytical study based mainly on the primary data collected through scientifically developed questionnaire. The questionnaire has been personally administered on a sample size of 250, chosen from four banks in Bangladesh located in the northern district of Kushtia. The result indicates that customers' perception has reached on highest in the Prompt and accuracy in transactions of the bank and lowest in the service of modern equipment and dcor. Due to the increasing competition in retail banking, customer service is an important part and bank must give their due attention to the customers' perception about service quality. Commercial banksassaulted by the pressures of globalization, competition from nonbanking financial institutions, and volatile market dynamicsare constantly seeking new ways to add value to their services Because financial services compete in the marketplace with generally undifferentiated products, service quality becomes a primary competitive weapon (Stafford, 1996). Currently technological changes are causing banks to rethink their strategies for services offered to both commercial and individual customers (Hossain and Shirely, 2010). Moreover, banks that excel in quality service can have a distinct marketing edge since improved levels of service quality are related to higher revenues, increased cross sell ratios, higher customer retention (Bennett and Higgins, 1988), and expanded market share (Bowen and Hedges, 1993). Therefore, banks should focus on service quality as a core competitive strategy (Chaoprasert and Elsey, 2004). Within this background customer satisfaction and service quality are compelling the attention of all banking institutions around the world and in recent years, academicians and practitioners give more attention in this area as it assumed that service quality is a critical measure of firm performance (Lasser et al., 2000; Yavas and Yasin, 2001; Bick et al. 2004; Andreassen and Olsen, 2008). Therefore, the objective of the paper is to test a service quality instrument by using retail banking services in the developing counting like Bangladesh as a case point.
The central issues involved in meaning service quality have been well documented (Cronin and Taylor, 1992; Parasuraman, Berry, and Zeithaml, 1991b; Babakus and Boller, 1992; Carman, 1990). Of interest here are two aspects of service quality measurement; (1) the number of dimensions that constitute service quality and (2) the operationalization of the measurement. Previous researchers have been looking at the linear relationship between service quality and satisfaction judgments. In recent studies on satisfaction judgments, it has been suggested that the relationship should be in a non-linear form (Ding, 2004). According to Taylor (1997), there is evidence that suggests that evaluation of satisfaction should involve a curvilinear or higher order form as well as an interaction effect (Taylor and Baker, 1994). This has been confirmed by Oliva et al. (1992) who stated that the satisfaction function should not be in the linear form. A study by Edris (1997) on quality for business customers among Kuwaitis found that local ownership is one of the determinants for bank selection. On the other hand, a study by Athanassopoulus (1997) showed that there is no global difference between private and the government-owned banks. There are many other researchers who concluded that service quality is the antecedent to satisfaction (Ahmad and Kamal, 2002; Cronin and Taylor, 1992; Yavas et al., 1997). Hence in this research, the question of which one is the antecedent will be studied. Using service quality as the antecedent to satisfaction is more logical and that why it has been taken into consideration. This is because satisfaction is an important goal to be achieved by bank marketers and if the banks want to increase satisfaction, they can do it through service quality (Goode et al., 1996). Financial market in Bangladesh essentially consists of banks and non-bank financial institutions and capital market which include state owned commercial banks (SCBs), private commercial banks (PCBs), foreign commercial banks (FCBs), government owned specialized banks, non-banking financial institutions (NFIs), Investment Corporation of Bangladesh (ICB), House Building Finance Corporation 59 (HBFC), Dhaka Stock Exchange (DSE), and Chittagong Stock Exchange (CSE). Besides, a total of 44 general insurance companies (1 state-owned) and 18 life insurance companies (1 state-owned) are operating in the country. As of June, 2010 47 scheduled banks which include 4 state-owned commercial banks, 30 private commercial banks, 9 foreign-owned commercial banks, 4 government-owned specialized banks, are operating in Bangladesh through their 7,246 branches . Among those branches as many as 3,394 belong to state-owned commercial banks, 2,427 branches to local private banks, 59 branches to foreign banks and 1,366 branches to specialized banks.
Moreover, there are 1 National Co-operative Bank, 1 Ansar VDP Bank, 1 Karmasangsthan Bank and 1 Grameen Bank which are operating as the non-scheduled banks. In Bangladesh, 4,169 branches of the scheduled banks are operating in the rural area Bangladesh Bank has been working as the central bank since the country's independence. Its prime jobs include issuing of currency, maintaining foreign exchange reserve and providing transaction facilities of all public monetary matters. To comply with international best practices and to make the bank's capital more resilient as well as to build the banking industry more risk sensitive, shock absorbent and stable, Bangladesh Bank commenced implementation of Basel-II capital adequacy framework from January 2010 as regulatory requirement for banks.
As per this study, both public sector and private sector banks appear to be providing services to the satisfaction of customers. The study indicates that customers' perception vary according to the nature of service. Measuring customer satisfaction with surveys or focus groups gives direction to the banks for efforts and valuable inputs for improvement. In this case, the highest customers' perceptions reach in Prompt and accuracy in transactions followed by Safety of customers' investments and keep confidentiality of account and transactions. The banks need to consider the weak areas in order to meet customer requirement. The study has limitations in terms of sample size and if more respondents could be included might be changed in terms of satisfaction ranking.
Chapter 3 Research Objective And Research Methodology
3. Research Objective
The objective of the study is as follows: 1. To measure the service quality of private and public banks in Dehradun. 2. To study about customer expectation towards service quality of banks. 3. To examine quality of services delivered by banks. 4. To identify the perceived service quality gap among public and private sector banks
3.1 Research Hypothesis

Ho: The satisfaction level of customers differs across the bank. H1: The satisfaction level of customers does not differ across the bank.
3.2 Research Methodology

Research is a systematic and self critical enquiry of Facts for some specific purpose. The enquiry is aimed at understanding a things or phenomenon or solving a problem. When an enquiry is aimed at understanding it is termed as basis or fundamental research. When pursue knowledge and may or may not have practical or commercial use. When the enquiry is aimed at applying the available knowledge for practical or commercial use or solving a problem faced in practice, it is termed as applied research
3.3 Research Design:It helps in the direction to form a blue print for my research work and to find out the answers for followings basic questions like what to observe, whom to observe, how to observe, why to observe, how to record the observations, how analyze the observations. Hence type of research design for my dissertation work is Descriptive in nature.
3.4 Sample Design:The population of the respondent of demographic profile used with a sample size of 104 respondents. The sample was divided into different demographic factors like age groups, gender, income categories, and occupation and education qualification. The sample was selected from the city of Dehradun. In my sample, was identified through systematic randomly to arrive at the targeted total of 104 respondents. The data was collected over a period of two months. Sample size: 104 respondents from Dehradun city.
3.5 Data collection sources:Primary Data: The data have been collected through structured questionnaire by
respondents in the Dehradun city. 22 statements were measured using a five point Likert scale, from 1- Strongly disagree to 5- Strongly agree. Secondary Data: The data has been collected from the sources like Books, magazines, marketing journals, research articles, internet search engines.
3.6 Tools uses for analysis:For analysis purpose I have used the following tools 1. Mean and Standard Deviation 2. Factor analysis 3. One Way ANOVA 4. Chi-square
3.7 Limitations of the study

The study was based on the perception of customers of few branches of public and private banks in Dehradun and a very small sample of respondents. Hence the findings cannot be treated as representative of the entire banking industry. The study can also not be generalized for public and private sector banks of the country.
Chapter 4 Data Analysis
4. Data Analysis
4.1 Age distribution of Sample Table 1: Age wise Distribution of Sample In(Years) Frequency Percent Valid Percent 20-30 31-40 Valid 41-50 51 or Above Total 63 26 10 5 104 60.6 25.0 9.6 4.8 100.0 60.6 25.0 9.6 4.8 100.0 Cumulative Percent 60.6 85.6 95.2 100.0
Age
9% 25%
5% 20-30 61% 31-40 41-50 51 or Above
Analysis: From the above table 1, we have found that majority of the Respondents are between 20-30 years i.e 61%, 25% Respondents are from 31-40 years, 9% Respondents are from 41-50 years and 5% Respondents are from 51 and above
4.2 Gender distribution of Sample
Table 2: Gender wise Distribution of Sample Frequency Percent Valid Percent Male Valid Female Total 85 19 104 81.7 18.3 100.0 81.7 18.3 100.0 Cumulative Percent 81.7 100.0
Gender
18%
Male Female 82%
Analysis: From the above table 2, we have found that 82% Respondents are male and 18% Respondents are female
4.3 Occupation distribution of Sample
Table 3: Occupation wise Distribution of Sample Frequency Percent Valid Percent Student Own Business Govt Employees Valid Private Employees Others Total 9 9 3 79 4 104 8.7 8.7 2.9 76.0 3.8 100.0 8.7 8.7 2.9 76.0 3.8 100.0 Cumulative Percent 8.7 17.3 20.2 96.2 100.0
Occupation
4% 8% 9% 3% Student Own Business Govt Employees 76% Private Employees Others
Analysis: From the above table 3, it is found that most of the Respondents are Private Employees which is 76%, 9% Respondents have their Own Business, 8% Respondents are Students, only 3% Respondents are Government Employees and rest 4% Respondents are from other occupation
4.4 Income distribution of Sample Table 4: Annual Income wise Distribution of Sample In (Rs.) Frequency Percent Valid Percent Below 1,20,000 1,20,0012,40,000 Valid 2,40,0013,60,000 3,60,000 or Above Total 13 31 12.5 29.8 12.5 29.8 Cumulative Percent 12.5 42.3
37
35.6
35.6
77.9
23 104
22.1 100.0
22.1 100.0
100.0
Annual Income
22%
12% Below 1,20,000 30% 1,20,001-2,40,000 2,40,001-3,60,000 3,60,000 or Above
36%
Analysis: From the above table 4, we found that 12% Respondents have their Annual Income below Rs.1,20,000 , 30% Respondents have their Annual Income between Rs.1,20,001 to Rs.2,40,000 , 36% Respondents have their Annual Income between Rs.2,40,001 to Rs.3,60,000 and 22% Respondents have their Annual Income Rs.3,60,000 and abov
4.5 Bank distribution of Sample
Table 5: Bank wise Distribution of Sample Frequency Percent Valid Percent SBI PNB ICICI Valid HDFC Others Total 6 28 104 5.8 26.9 100.0 5.8 26.9 100.0 73.1 100.0 36 25 9 34.6 24.0 8.7 34.6 24.0 8.7 Cumulative Percent 34.6 58.7 67.3
Banks
27%
34%
SBI PNB ICICI
6% 9% 24%
HDFC Others
Analysis: From the above table 5, we have found that 34% Respondents are using S.B.I. 24%, Respondents are using P.N.B. , 9% Respondents are using I.C.I.C.I , 6% Respondents are using H.D.F.C , and 27% Respondents are using Other banks.
Expected Mean Table 1:- Descriptive Statistics (expectation) Min Bank has modern looking equipment. Banks physical facilities are visually appealing. Banks reception desk employees are neat appearing. Materials associated with the service (such as pamphlets or statements) are visually appealing at bank. When bank promises to do something by a certain time, it does so. When you have a problem, bank shows a sincere interest in solving it. Bank performs the service right at the first time. Bank provides its service at the time it promises to do so. Bank insists on error free records. Employees in bank tell you exactly when services will be performed. Employees in bank give you prompt service. Employees in bank are always willing to help you. Employees in bank are never too busy to respond to your request. The behaviour of employees in bank instils confidence in you. You feel safe in your transactions with bank. Employees in bank area consistently courteous with you. Employees in bank have the knowledge to answer your questions. Bank gives you individual attention. Bank has operating hours convenient to all its customers. Bank has employees who give you personal attention. Bank has your best interest at heart. The employees of bank understand your specific needs. Valid N (list wise) 2.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 1.00 1.00 1.00 1.00 3.00 3.00 1.00 1.00 1.00 1.00 3.00 2.00
Max 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Std. Dev. 4.1731 .74315 3.9808 .69646 4.0000 1.12345 4.0288 1.11003 4.1154 1.06404 4.4135 4.2596 4.3365 4.2981 4.0385 4.1154 4.1538 .87700 .93472 .81979 .91248 .95453 .93796 .91130
Mean
3.7788 1.19835 3.6923 4.4327 4.2692 4.4519 .97619 .66485 .62676 .76170
4.1923 .94588 3.9038 .95041 4.0962 1.10180 4.1346 .76397 4.3750 .76561
From the above Table 1, it is found that the highest range of expected mean is found by the customers in terms of employees in bank having the knowledge to answer the customers questions and customers feel safe in their transactions with banks and the lowest range of expected mean is found in terms of the employees in bank are never busy to respond to the customers request and the behaviour of employees in bank instils confidence in the customers.
Perceived Mean Table 2:- Descriptive Statistics Perceived Min Bank has modern looking equipment. Banks physical facilities are visually appealing. Banks reception desk employees are neat appearing. Materials associated with the service (such as pamphlets or statements) are visually appealing at bank. When bank promises to do something by a certain time, it does so. When you have a problem, bank shows a sincere interest in solving it. Bank performs the service right at the first time. Bank provides its service at the time it promises to do so. Bank insists on error free records. Employees in bank tell you exactly when services will be performed. Employees in bank give you prompt service. Employees in bank are always willing to help you. Employees in bank are never too busy to respond to your request. The behaviour of employees in bank instils confidence in you. You feel safe in your transactions with bank. Employees in bank area consistently courteous with you. Employees in bank have the knowledge to answer your questions. Bank gives you individual attention. Bank has operating hours convenient to all its customers. Bank has employees who give you personal attention. Bank has your best interest at heart. The employees of bank understand your specific needs. Valid N (list wise) 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 1.00 2.00 1.00 1.00 1.00 1.00 1.00 Max Std. Dev 5.00 3.3558 .94425 5.00 3.1635 .88252 5.00 3.1058 1.17348 5.00 3.2019 1.12673 5.00 3.3365 4.00 4.5385 .96150 6.9084 Mean
5.00 3.2885 1.00168 5.00 3.4615 1.13995 5.00 3.5000 .98533 5.00 3.1346 1.15798 5.00 3.0865 1.00591 5.00 3.0577 1.01280 5.00 3.0385 .88046
5.00 3.0865 1.03446 5.00 4.0385 1.01372 5.00 3.3942 1.22608 5.00 3.5000 1.07034 5.00 5.00 5.00 5.00 5.00 3.0962 3.0865 3.1442 2.7885 3.2596 1.44491 1.02503 1.36117 1.08541 .91371
From the above Table 2, it is found that the highest range of perceived mean is found by the customers in terms of employees of bank shows a sincere interest in solving the problems of the customers and in their transactions customers feel safe with the banks and the lowest range of perceived mean is found in terms of employees in bank are never too busy to respond to the customers request and bank has customers best interest at heart.
Table 3:- Descriptive Statistics(E-P)

Expected Mean Bank has modern looking equipment. Banks physical facilities are visually appealing. Banks reception desk employees are neat appearing. Materials associated with the service (such as pamphlets or statements) are visually appealing at bank. When bank promises to do something by a certain time, it does so. When you have a problem, bank shows a sincere interest in solving it. Bank performs the service right at the first time. Bank provides its service at the time it promises to do so. Bank insists on error free records. Employees in bank tell you exactly when services will be performed. Employees in bank give you prompt service. Employees in bank are always willing to help you. Employees in bank are never too busy to respond to your request. The behaviour of employees in bank instils confidence in you. You feel safe in your transactions with bank. Employees in bank area consistently courteous with you. Employees in bank have the knowledge to answer your questions. Bank gives you individual attention. Bank has operating hours convenient to all its customers. Bank has employees who give you personal attention. Bank has your best interest at heart. The employees of bank understand your specific needs. Valid N (list wise) 4.1731 3.9808 4.0000 4.0288 4.1154 4.4135 4.2596 4.3365 4.2981 4.0385 4.1154 4.1538 3.7788 3.6923 4.4327 4.2692 4.4519 4.1923 3.9038 4.0962 4.1346 4.3750 Perceived Mean 3.3558 3.1635 3.1058 3.2019 3.3365 Gap (E-P) 0.8173 0.8173 0.8942 0.8269 0.7789
4.5385 -0.1250 3.2885 3.4615 3.5000 3.1346 3.0865 3.0577 3.0385 3.0865 4.0385 3.3942 3.5000 3.0962 3.0865 3.1442 2.7885 3.2596 0.9711 0.8750 0.7981 0.9039 1.0289 1.0961 0.7403 0.6058 0.3942 0.8750 0.9519 1.0961 0.8173 0.9520 1.3461 1.1154
The above Table 3 shows the mean performance of expectation and perceived gap score for the banks used in the study. It is found that Employees in banks are not giving the prompt services properly to the customers as the mean gap shows the value 1.0289. It is also found that employees in banks are also not willing to help the customers where the gap is 1.0961,
banks are also not giving the individual attention to the customers as the gap is 1.0961, employees of bank does not understand the specific needs of the customers which shows the gap of 1.1154, the major gap is found that bank has not the best interest at heart with the customers 1.3461.
Hypothesis Ho: The satisfaction level of customers differs across the bank. H1: The satisfaction level of customers does not differ across the bank.
An attempt was made to check the relationship between the degree of satisfaction of the respondents across the different banks, chi-square test was carried out using SPSS software the present in the table below
Table 4:- Bank * Satisfaction Cross tabulation Count Strongly Disagree 0 0 2 0 2 4 Satisfaction Disagree Neutral 6 1 0 0 0 7 7 3 0 4 20 34 Total Agree 23 21 7 2 6 59 Strongly Agree 0 0 0 0 0 0 36 25 9 6 28 104
SBI PNB Bank ICICI HDFC Others Total
Pearson Chi-Square Likelihood Ratio Linear-by-Linear 6.505 1 .011 Association N of Valid Cases 104 a. 13 cells (65.0%) have expected count less than 5. The minimum expected count is .23. From the above Table 5, the calculated values of chi-square is at 5% level of significance and 12 degree of freedom is 53.875 which is higher than the critical value. Hence null hypothesis is rejected indicating that the satisfaction level of customers does not differ across the bank.
Table 5:- Chi-Square Tests Value df a 53.875 12 55.566 12
Asymp. Sig. (2-sided) .000 .000
Age 20-30 Years 31-40 Years 41-50 Years 51 or Above Total
Table 6:- Mean with Age (Expectation) Tangible Reliability Responsiveness Assurance 3.9325 4.1827 4.0750 4.7000 4.0457 4.2540 4.4538 3.8200 4.7200 4.2846 4.0278 4.0000 3.7250 4.6500 4.0216 4.1548 4.3558 3.9500 4.7000 4.2115
Empathy 4.0698 4.3538 3.8600 4.4800 4.1404
The mean of different dimensions of service quality measurement across the different level of age (Table 6) reveals that Reliability scored highest mean across the respondents of different age categories. At the same time this factor has scored highest among all age category respondents.
Table 7:- ANOVA with Age (Expectation) Sum of df Mean Squares Square Between 3.444 3 1.148 Groups Tangible Within Groups 30.902 100 .309 Total 34.346 103 Between 3.910 3 1.303 Groups Reliability Within Groups 52.465 100 .525 Total 56.375 103 Between 2.869 3 .956 Groups Responsiveness Within Groups 47.395 100 .474 Total 50.264 103 Between 2.621 3 .874 Groups Assurance Within Groups 23.850 100 .239 Total 26.471 103
Sig.
3.715
.014
2.484
.065
2.018
.116
3.663
.015
Empathy
Between Groups Within Groups Total
2.861 56.729 59.590
3 100 103
.954 .567
1.681
.176
One-way ANOVA analysis was carried out with the assumption that expected mean of different factors of service quality does not differ significant across the age of respondents. From the Table7, it is clear that calculated value of F is greater than the tabulated value of F (2.37, = .05) except the factors like Responsiveness and Empathy. Hence the null hypothesis is rejected, indicating that there is a significant difference in the expected mean of different service quality factors across the different age category except in the case of factors like Responsiveness and Empathy.
Age
Table 8:- Mean with Age (Perceived) Tangible Reliability Responsiveness Assurance
Empathy
20-30 Years 31-40 Years 41-50 Years 51 or Above Total
3.0595 3.4519 3.1500 3.9000 3.2067
3.3429 4.7154 3.2000 3.9600 3.7019
3.0437 3.2212 2.7000 3.5500 3.0793
3.6071 3.5577 2.4000 4.1500 3.5048
3.1492 3.0615 2.3600 3.6400 3.0750
The mean of different dimensions of service quality measurement across the different level of age (Table 8) reveals that Reliability scored highest mean across the respondents of different age categories. At the same time this factor has scored highest among all age category respondents.
Tangible
Reliability
Responsiveness
Assurance
Empathy
Table 9:- ANOVA with Age (Perceived) Sum of Df Mean Squares Square Between 5.364 3 1.788 Groups Within Groups 56.942 100 .569 Total 62.305 103 Between 37.679 3 12.560 Groups Within Groups 312.400 100 3.124 Total 350.080 103 Between 3.150 3 1.050 Groups Within Groups 61.383 100 .614 Total 64.533 103 Between 15.020 3 5.007 Groups Within Groups 63.103 100 .631 Total 78.123 103 Between 7.060 3 2.353 Groups Within Groups 81.195 100 .812 Total 88.255 103
Sig.
3.140
.029
4.020
.010
1.710
.170
7.934
.000
2.898
.039
One-way ANOVA analysis was carried out with the assumption that perceived mean of different factors of service quality does not differ significant across the age of respondents. From the Table 9, it is clear that calculated value of F is greater than the tabulated value of F (2.37, = .05) except the factor like Responsiveness. Hence the null hypothesis is rejected, indicating that there is a significant difference in the perceived mean of different service quality factors across the different age category except in the case of factor like Responsiveness.
Gender
Table 10:- Mean with Gender (Expectation) Tangible Reliability Responsiveness Assurance
Empathy
Male Female Total
4.0294 4.1184 4.0457
4.2800 4.3053 4.2846
4.0206 4.0263 4.0216
4.1971 4.2763 4.2115
4.1412 4.1368 4.1404
The mean of different dimensions of service quality measurement across the different level of gender (Table 10) reveals that Reliability scored highest mean across the respondents of different gender categories. At the same time this factor has scored highest among all gender category respondents.
Table 11:- ANOVA with Gender (Expectation) Sum of df Mean Squares Square Between .123 1 .123 Groups Tangible Within Groups 34.223 102 .336 Total 34.346 103 Between .010 1 .010 Groups Reliability Within Groups 56.365 102 .553 Total 56.375 103 Between .001 1 .001 Groups Responsiveness Within Groups 50.263 102 .493 Total 50.264 103 Between .098 1 .098 Groups Assurance Within Groups 26.374 102 .259 Total 26.471 103
Sig.
.367
.546
.018
.894
.001
.974
.377
.540
Empathy
Between Groups Within Groups Total
.000 59.590 59.590
1 102 103
.000 .584
.000
.982
One-way ANOVA analysis was carried out with the assumption that expected mean of different factors of service quality does not differ significant across the gender of respondents. From the Table11, it is clear that calculated value of F is less than the tabulated value of F (2.37, = .05) Hence the null hypothesis is accepted, indicating that there is no significant difference in the expected mean of different service quality factors across the different gender category.
Gender
Table 12:- Mean with Gender (Perceived) Tangible Reliability Responsiveness Assurance
Empathy
Male Female Total
3.1706 3.3684 3.2067
3.6847 3.7789 3.7019
2.9618 3.6053 3.0793
3.3647 4.1316 3.5048
2.9059 3.8316 3.0750
The mean of different dimensions of service quality measurement across the different level of gender (Table 12) reveals that Assurance scored highest mean across the respondents of different gender categories. At the same time this factor has scored highest among all gender category respondents.
Tangible
Reliability
Responsiveness
Assurance
Empathy
Table 13:- ANOVA with Gender (Perceived) Sum of df Mean Squares Square Between .608 1 .608 Groups Within Groups 61.698 102 .605 Total 62.305 103 Between .138 1 .138 Groups Within Groups 349.942 102 3.431 Total 350.080 103 Between 6.430 1 6.430 Groups Within Groups 58.103 102 .570 Total 64.533 103 Between 9.132 1 9.132 Groups Within Groups 68.990 102 .676 Total 78.123 103 Between 13.307 1 13.307 Groups Within Groups 74.948 102 .735 Total 88.255 103
Sig.
1.005
.319
.040
.841
11.289
.001
13.502
.000
18.110
.000
One-way ANOVA analysis was carried out with the assumption that perceived mean of different factors of service quality does not differ significant across the gender of respondents. From the Table 13, it is clear that calculated value of F is greater than the tabulated value of F (2.37, = .05) except the factors like Tangibility and Reliability. Hence the null hypothesis is rejected, indicating that there is a significant difference in the perceived mean of different service quality factors across the different gender category except in the case of factors like Tangibility and Reliability.
Table 14:- Mean with Occupation (Expectation) Occupation Tangible Reliability Responsiveness Assurance Empathy Student Own Business Govt Employees Private Employees Others Total 3.9722 3.9722 4.7500 4.0095 4.5625 4.0457 3.9556 3.8444 4.4667 4.3418 4.7500 4.2846 3.9167 3.6667 4.4167 4.0475 4.2500 4.0216 4.1111 3.8889 4.5833 4.2247 4.6250 4.2115 3.8667 3.7778 4.6667 4.1873 4.2500 4.1404
The mean of different dimensions of service quality measurement across the different level of gender (Table 14) reveals that Tangibility and Reliability scored highest mean across the respondents of different occupation categories. At the same time these factor has scored highest among all occupation category respondents.
Table 15:- ANOVA with Occupation (Expectation)

Sum of Squares Between Groups Tangible Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total 2.757 31.588 34.346 3.942 52.433 56.375 1.963 48.301 50.264 2.140 24.331 26.471 2.911 56.680 59.590 df 4 99 103 4 99 103 4 99 103 4 99 103 4 99 103 Mean Square .689 .319 .986 .530 .491 .488 .535 .246 .728 .573 1.861 .123 F 2.160 Sig. .079
Reliability
1.006
.408
Responsiveness
2.177
.077
Assurance
1.271
.287
Empathy
One-way ANOVA analysis was carried out with the assumption that expected mean of different factors of service quality does not differ significant across the occupation of respondents. From the Table15, it is clear that calculated value of F is less than the tabulated value of F (2.37, = .05) Hence the null hypothesis is accepted, indicating that there is no significant difference in the expected mean of different service quality factors across the different occupation category.
Occupation Student Own Business Govt Employees Private Employees Others Total
Table 16:- Mean with Occupation (Perceived) Tangible Reliability Responsiveness Assurance Empathy 3.5278 3.0556 3.9167 3.1013 4.3750 3.2067 3.4222 3.0000 4.0667 3.7747 4.2000 3.7019 3.3611 2.3889 3.5833 3.0728 3.7500 3.0793 3.6111 2.1111 4.0000 3.5918 4.3125 3.5048 3.3111 1.9111 4.0667 3.0987 3.9500 3.0750
The mean of different dimensions of service quality measurement across the different level of occupation (Table 8) reveals that Tangibility scored highest mean across the respondents of different occupation categories. At the same time this factor has scored highest among all occupation category respondents.
Table 17:- ANOVA with Occupation (Perceived)

Sum of Squares Between Groups Tangible Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total 8.983 53.322 62.305 6.948 343.132 350.080 7.570 56.963 64.533 21.526 56.597 78.123 18.751 69.504 88.255 df 4 99 103 4 99 103 4 99 103 4 99 103 4 99 103 Mean Square 2.246 .539 1.737 3.466 1.892 .575 5.381 .572 4.688 .702 .501 .735 F 4.170 Sig. .004
Reliability
3.289
.014
Responsiveness
9.413
.000
Assurance
6.677
.000
Empathy
One-way ANOVA analysis was carried out with the assumption that perceived mean of different factors of service quality does not differ significant across the occupation of respondents. From the Table 17, it is clear that calculated value of F is greater than the tabulated value of F (2.37, = .05) except the factor like Reliability. Hence the null hypothesis is rejected, indicating that there is a significant difference in the perceived mean of different service quality factors across the different occupation category except in the case of factor like Reliability.
Reliability Statistics (Expectation) Cronbach's Alpha .928 N of Items 22
By applying Cronbachs Alpha test for 22 items on services quality expectation and it is observed that the Cronbachs Alpha value is 0.928, which states that the data collected from the samples are highly reliable.
Reliability Statistics (Perception) Cronbach's Alpha .795 N of Items 22
By applying Cronbachs Alpha test for 22 items on services quality perception and it is observed that the Cronbachs Alpha value is 0.795, which states that the data collected from the samples are highly reliable.
Chapter 5 Findings
5. Findings of the Study
It is found that the expectation of consumers is highest for knowledge of employees to answer the queries of customers (4.4519), safety in their transactions with banks (4.4327)
The expectation of consumers is lowest for the reception desks of bank which is neat and clean (4.0000) and the behavior of employees in bank instils confidence in the customers(3.6923)
It is found that the perception of consumers is highest for the employees of bank shows a sincere interest in solving the problems of the customers (4.5385) and safety in their transactions with banks (4.0385)
It is found that the perception of consumers is highest for employees in bank are never too busy to respond to the customers request (3.0385) and bank has customers best interest at heart (2.7885)
The mean gap shows employees in banks are not giving the prompt services properly to the customers (1.0289), employees in banks are also not willing to help the customers (1.0961), banks are also not giving the individual attention to the customers
(1.0961), employees of bank does not understand the specific needs of the customers (1.1154), the major gap is fond that bank has not the best interest at heart with the customers (1.3461)
Using Chi-square it was found that the satisfaction level of customers does not differ across the banks. Using one-way ANOVA on the various demographic factors the following results concluded :It is found that there is a significant difference in the expected mean of different service quality factors across the different age category except in the case of factors like Responsiveness and Empathy.
There is a significant difference in the perceived mean of different service quality factors across the different age category except in the case of factor like Responsiveness.
There is no significant difference in the expected mean of different service quality factors across the different gender category.
There is a significant difference in the perceived mean of different service quality factors across the different gender category except in the case of factors like Tangibility and Reliability.
There is no significant difference in the expected mean of different service quality factors across the different occupation category. There is a significant difference in the perceived mean of different service quality factors across the different occupation category except in the case of factor like Reliability.
Chapter 6 Suggestions And Conclusion
6. Conclusion
As per the study, both public sector and private sector banks appear to be providing services to the satisfaction of customers. The study indicates that customers' perception vary according to the nature of service. Measuring customer satisfaction with surveys gives direction to the banks for efforts and valuable inputs for improvement. In this case, the highest customers' expectation reach in knowledge to answer the customers questions and accuracy in transactions followed by safety of customers' investments and keep confidentiality of account and transactions. By comparing the customers expectations with the perception it was found that the employees in banks are not giving the prompt services properly to the customers and it was also found that the employees in the banks are not willing to help the customers not giving them the individual attention and also not understanding their specific needs. The banks need to consider the weak areas in order to meet customer requirement. Private Banks seem to have satisfied its customers with good services and they have been successful in retaining its customers by providing better facilities than Public sector banks. But, still Private Banks need to go a long way to become customers first preference. In an economy of innovative technologies and changing markets, each and every service quality variable has become important. New financial products and services have to be continuously introduced in order to stay competent. Success mantra could be customer centric orientation, where the organization builds long term strategic relationships with its customers and Private sector Banks have been successful in achieving such relationship with customers however public sector banks have to improve in this area. Private Banks need to concentrate more on their credit facilities and insurance services since customers do not have a very good opinion about these facilities being offered by Private Banks. Public sector banks enjoy the trust of the customers, which they have been leveraging to stay in the race however they need to improve their service quality by improving their physical facility, infrastructure and giving proper soft skill trainings to their employees. The study has limitations in terms of sample size and if more respondents could be included might be in terms of satisfaction ranking.
Chapter 7 Bibliography
7. Bibliography
Books 1. PHILLIP KOTLER , Marketing Management: planning, implementation & control, PHI, 7th edition, 1999 2. V.S. RAMASWAMY, S.NAMAKUMARI , Marketing management (planning, implementation & control), 3. C.R.KOTHARI, Research methodology(Methods and techniques) New Age Publication, Jaipur 2nd edition, reprint2008. 4. N.K. MALHOTRA (2002). Marketing Research, Pearson Education, New Delhi. 5. CHRISTOPHER AND LOVELOCK, Services Marketing, New Delhi, 2008. 6.
Articles in Journals 1. Madhukar G. Angur, Rajan Nataraajan, John S. Jahera Jr , Service quality in the banking industry: an assessment in a developing economy International Journal of Bank Marketing , Vol. 17 No.3 , pp. 116-125. 2. Puja Khatri and Yukti Ahuja , Comparative Study of Customer Satisfaction in Indian Public Sector and Private Sector Banks International Journal of Engineering and Management Sciences, I.J.E.M.S., Vol.1(1) , pp. 42-51 3. J.Clement Sudhahar and M. Selvam , Service Quality Scale Development in Indian Retail Banking Sector: An Empirical Investigation. Journal of Applied Sciences, 7:766-771
4. Anber Abraheem Shlash Mohammad and Shireen Yaseen Mohammad Alhamadani ,
Service Quality Perspectives & Customer Satisfaction in Commercial Banks working in Jordan 5. Babak Mahmood , Muzaffar Abbas , Customer Satisfaction with Service Quality in Conventional Banking in Pakistan: The Case of Faisalabad. International Journal of Marketing Studies, Vol.3, No.4
6. Md. Abdul Muyeed , Customer Perception on Service Quality in Retail Banking in Developing Countries International Journal of Marketing Studies, Vol.4, No.1 7. Zeithaml, V.A., L.L. Berry, and A. Parasuraman,(1994), The behavioral consequences of service quality Journal of Marketing, 60(2), pp. 31-46. 8. Brady, M.K., and J.J. Jr Cronin, (2001), Some new thoughts on conceptualizing perceived service quality: A hierarchical approach, Journal of Marketing, 65, July, pp. 34-49. 9. Parasuraman, A., VA. Zeithaml, and L.L. Berry, (1985), A Conceptual Model of Service Quality and its Implication for Future Research", Journal of Marketing, 49 (Fall), pp. 41-50. 10. Parasuraman, A., Berry, L.L. and V.A. Zeithaml, (1991), Understanding customer expectations of service, Sloan Management Review, 32(3), pp. 39-48. 11. Parasuraman, A., VA. Zeithaml, and L.L. Berry, (1988), SERVQUAL: A multipleitem scale for measuring consumer perceptions of service quality, Journal of Retailing, 64(1), pp. 12-40. 12. Achim, Machauer. and Sebastian, Morgner., "Segmentation of bank customers by expected benefits and attitudes", The International Journal of Bank Marketing, Vol.19:1, 2001, 6-15. 13. Aldlaigan, A., and Buttle, A. SYSTRA-SQ: A new measure of banks service quality. International Journal of Service Industry Management, Vol. 13 No. 4, pp. 362-81. 14. Bahia, K., & Nantel, J. A reliable and valid measurement scale for the perceived service quality of banks. The International Journal of Bank Marketing, Vol.18 No.2, pp. 84-91. 15. Nair M.V, Banking -new directions of growth, The Hindu-Survey of Indian Industry 2010, pp.60-61.
Web Sites http://ssrn.com/abstract=1584732 http://www.jstor.org/stable/1252296 http://www.google.co.in http://www.statebankofindia.com
www.iloveindia.com/finance/bank/...banks/state-bank-of-india.htm
http:// www.icicibank.com/aboutus/history.html http:// www.icicigroupcompanies.com http://www.pnb.co.in http://www.hdfc.co.in
Chapter 8 Annexure
8. Annexure Service Quality Gap Analysis for Banks

Note: - This questionnaire is designed to complete my research work. The information thus received will be kept confidential and will not used for any other purpose.
Kindly Tick mark any appropriate.
1. Name : ____________________________________________________________________ 2. Age: 20-30 Years 41-50 Years 3. Gender: 4. Occupation: Male Own Business Private Employee 5. Annual Income: Below Rs.1, 20,000 Rs.2, 40,001 to Rs.3, 60,000 6. Which bank do you have account with present? SBI ICICI PNB HDFC Female Government Employee Any Other Rs.1, 20,001 to Rs.2, 40,000 Rs.3, 60,000 and above 31- 40 Years 51 or Above
If any other please specify __________________________________________________ 7. Do you have got all the account with one bank? Yes No
8. On the scale of 1 to 5, kindly rate the following parameters of Bank on the basis of your expectation and perception from the quality of bank: 1 = Strongly Disagree 5 = Strongly Agree
S.N
1. 2.
Statement
Bank has modern looking equipment. Banks physical facilities are visually appealing.
Expected Value 1 2 3 4 5
Achieved Value 1 2 3 4 5
www.final-yearproject.com | www.finalyearthesis.com 3. Banks reception desk employees are neat appearing. 4. Materials associated with the service (such as pamphlets or statements) are visually appealing at bank. 5. When bank promises to do something by a certain time, it does so. 6. When you have a problem, bank shows a sincere interest in solving it. 7. 8. Bank performs the service right at the first time. Bank provides its service at the time it promises to do so. 9. 10. Bank insists on error free records. Employees in bank tell you exactly when services will be performed. 11. 12. 13. Employees in bank give you prompt service. Employees in bank are always willing to help you. Employees in bank are never too busy to respond to your request. 14. The behaviour of employees in bank instils confidence in you. 15. 16. You feel safe in your transactions with bank. Employees in bank area consistently courteous with you. 17. Employees in bank have the knowledge to answer your questions. 18. 19. Bank gives you individual attention. Bank has operating hours convenient to all its customers. 20. Bank has employees who give you personal attention. 21. 22. Bank has your best interest at heart. The employees of bank understand your specific needs.
9. Do you find any significant difference in your expectation and services delivered by bank?
www.final-yearproject.com | www.finalyearthesis.com Yes No Cant Say
10. Are you satisfied with the quality and performance of your Bank? Strongly Satisfied Dissatisfied Satisfied Strongly Dissatisfied Neutral
Thanks for the Participation.

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SERVICE QUALITY GAP ANALYSIS FOR BANKS

Submitted By: SHOBHIT KR RASTOGI MBA (Marketing) 4th Semester

UTTARANCHAL INSTITUTE OF TECHNOLOGY, DEHRADUN

Date: Place: Dehradun

Mr. Devkant Kala Asst. Professor, UIT, Dehradun

Shobhit Kumar Rastogi

SHOBHIT KUMAR RASTOGI MBA 4th semester

Chapter 7 Bibliography Chapter 8 Annexure

1.1 Banking Industry in India

Phase IV- Period of Increased Liberalisation (2004 onwards)

1.1.3 Service Quality

1.1.4 Dimensions of Service Quality

1.1.5 Gap Model

1.1.6 Service Quality in Banks

1.1.7 Major Players of Banking Industries

State Bank of India

The eight banking subsidiaries are:

Products And Services

Punjab National Bank

Deposits Loans Cards Investments Insurance Demat Services Wealth Management

Money Transfer Bank Accounts

Investments Property Solutions Insurance Loans

Products & Services

Chapter 2 Literature Review

Service quality in the banking industry: an assessment in a developing economy

International Journal of Bank Marketing Vol. 17 No.3 , pp. 116-125.

Journal of Applied Sciences, 7: 766-771. J.Clement Sudhahar and M. Selvam

Customer Perception on Service Quality in Retail Banking in Developing Countries

Chapter 3 Research Objective And Research Methodology

3.1 Research Hypothesis

3.2 Research Methodology

3.7 Limitations of the study

Chapter 4 Data Analysis

5% 20-30 61% 31-40 41-50 51 or Above

4.2 Gender distribution of Sample

Male Female 82%

4.3 Occupation distribution of Sample

12% Below 1,20,000 30% 1,20,001-2,40,000 2,40,001-3,60,000 3,60,000 or Above

4.5 Bank distribution of Sample

SBI PNB ICICI

Table 3:- Descriptive Statistics(E-P)

SBI PNB Bank ICICI HDFC Others Total

Table 5:- Chi-Square Tests Value df a 53.875 12 55.566 12

Asymp. Sig. (2-sided) .000 .000

Age 20-30 Years 31-40 Years 41-50 Years 51 or Above Total

Empathy 4.0698 4.3538 3.8600 4.4800 4.1404

Between Groups Within Groups Total

2.861 56.729 59.590

20-30 Years 31-40 Years 41-50 Years 51 or Above Total

3.0595 3.4519 3.1500 3.9000 3.2067

3.3429 4.7154 3.2000 3.9600 3.7019

3.0437 3.2212 2.7000 3.5500 3.0793

3.6071 3.5577 2.4000 4.1500 3.5048

3.1492 3.0615 2.3600 3.6400 3.0750

Male Female Total

4.0294 4.1184 4.0457

4.2800 4.3053 4.2846

4.0206 4.0263 4.0216

4.1971 4.2763 4.2115

4.1412 4.1368 4.1404

Between Groups Within Groups Total

.000 59.590 59.590