1

ACKNOWLEGDEMENT

I would like to thank Dr. Anjula Bansal for giving me support and
assistance in completing this project. She provided with all the
necessary information and guidance which was needed in this
project. Without her it would not have been able to do this research
effectively. She showed different ways to approach a research
problem and need to be persistent to accomplish our goals.

I would also like to thank the college authorities for providing the
infrastructure and the lab facilities which has helped me a lot in the
completion of this project.
2
 3

CHAPTER-1

INTRODUCTION

In the organised segment, banking system occupies an important place in

nation’s economy. It plays a pivotal role in the economic development of a
country and forms the core of the money market in an advanced country.
The commercial banks in India comprise of both Public sector as well as
private sector banks. There are total 28 Public sector and 27 private sector
banks are functioning in the country presently. Banks have to deal with
many customers everyday and render various types of services to its
customer.It's a well known fact that no business can exist without customers.

Customer satisfaction, a business term, is a measure of how products and

services supplied by a company meet or surpass customer expectation. It is
seen as a key performance indicator within business. In a competitive
marketplace where businesses compete for customers, customer satisfaction
is seen as a key differentiator and increasingly has become a key element of
business strategy. Customer satisfaction is an ambiguous and abstract
concept and the actual manifestation of the state of satisfaction will vary
from person to person and service to service. The state of satisfaction
depends on a number of both psychological and physical variables.

The banking industry like many other financial service industries is facing a
rapidly changing market, new technologies, economic uncertainties, fierce
competition and more demanding customers and the changing climate has
presented an unprecedented set of challenges . Banking is a customer
 4

oriented services industry, therefore, the customer is the focus and customer
service is the differentiating factors .

The banking industry in India has undergone sea change since post
independence. More recently, liberalization, the opening up of the economy
in the 90s and the government's decision to privatize banks by reduction in
state ownership culminated in the banking reforms based on the
recommendations of Narasimha Committee. The prime mover for banks
today is profit, with clear indications from the government to 'perform or
perish'. Banks have also started realizing that business depends on client
service and the satisfaction of the customer and this is compelling them to
improve customer service and build up relationship with customers.

With the current change in the functional orientation of banks, the purpose
of banking is redefined. The main driver of this change is changing
customer needs and expectations. Customers in urban India no longer want
to wait in long queues and spend hours in banking transactions. This change
in customer attitude has gone hand in hand with the development of ATMs,
phone and net banking along with availability of service right at the
customer's doorstep. With the emergence of universal banking, banks aim to
provide all banking product and service offering under one roof and their
endeavor is to be customer centric. With the emergence of economic
reforms in world in general and in India in particular, private banks have
come up in a big way with prime emphasis on technical and customer
focused issues.

Banking in India originated in the last decades of the 18th century.

The oldest bank in existence in India is the State Bank of India, a
 5

government-owned bank that traces its origins back to June 1806 and that is
the largest commercial bank in the country. Central banking is the
responsibility of the Reserve Bank of India, which in 1935 formally took
over these responsibilities from the then Imperial Bank of India, relegating it
to commercial banking functions. After India's independence in 1947, the
Reserve Bank was nationalized and given broader powers. In 1969 the
government nationalized the 14 largest commercial banks; the government
nationalized the six next largest in 1980.

Currently, India has 88 scheduled commercial banks (SCBs) - 27 public

sector banks (that is with the Government of India holding a stake), 29
private banks (these do not have government stake; they may be publicly
listed and traded on stock exchanges) and 31 foreign banks. They have a
combined network of over 53,000 branches and 17,000 ATMs. According to
a report by ICRA Limited, a rating agency, the public sector banks hold over
75 percent of total assets of the banking industry, with the private and
foreign banks holding 18.2% and 6.5% respectively.

Company Profile of SBI

State Bank of India (SBI) is India's largest commercial bank. SBI has a vast
domestic network of over 9000 branches (approximately 14% of all bank
branches) and commands one-fifth of deposits and loans of all scheduled
commercial banks in India.

The State Bank Group includes a network of eight banking

subsidiaries and several non-banking subsidiaries offering merchant banking
 6

services, fund management, factoring services, primary dealership in

government securities, credit cards and insurance.

The eight banking subsidiaries are:

1-State Bank of Bikaner and Jaipur (SBBJ)
2-State Bank of Hyderabad (SBH)
3-State Bank of India (SBI)
4-State Bank of Indore (SBIR)
5-State Bank of Mysore (SBM)
6-State Bank of Patiala (SBP)
7-State Bank of Saurashtra (SBS)
8-State Bank of Travancore (SBT)

The origins of State Bank of India date back to 1806 when the Bank of
Calcutta (later called the Bank of Bengal) was established. In 1921, the
Bank of Bengal and two other Presidency banks (Bank of Madras and Bank
of Bombay) were amalgamated to form the Imperial Bank of India. In 1955,
the controlling interest in the Imperial Bank of India was acquired by the
Reserve Bank of India and the State Bank of India (SBI) came into existence
by an act of Parliament as successor to the Imperial Bank of India.

Today, State Bank of India (SBI) has spread its arms around the world and
has a network of branches spanning all time zones. SBI's International
Banking Group delivers the full range of cross-border finance solutions
through its four wings - the Domestic division, the Foreign Offices division,
the Foreign Department and the International Services division.
 7

State Bank of India (SBI) (LSE: SBID) is the largest bank in India. If one
measures by the number of branch offices and employees, SBI is the largest
bank in the world. Established in 1806 as Bank of Calcutta, it is the oldest
commercial bank in the Indian subcontinent. SBI provides various domestic,
international and NRI products and services, through its vast network in
India and overseas. With an asset base of $126 billion and its reach, it is a
regional banking behemoth. The government nationalized the bank in 1955,
with the Reserve Bank of India taking a 60% ownership stake. In recent
years the bank has focused on three priorities, 1), reducing its huge staff
through Golden handshake schemes known as the Voluntary Retirement
Scheme, which saw many of its best and brightest defect to the private
sector, 2), computerizing its operations and 3), changing the attitude of its
employees (through an ambitious programme aptly named 'Parivartan'
which means change) as a large number of employees are very rude to
customers.

Company Profile of ICICI

ICICI Bank is India's second-largest bank with total assets of Rs. 3,849.70
billion (US$ 82 billion) at September 30, 2008 and profit after tax Rs. 17.42
billion for the half year ended September 30, 2008. The Bank has a network
of about 1,400 branches and 4,530 ATMs in India and presence in 18
countries. ICICI Bank 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 and affiliates in the areas of
investment banking, life and non-life insurance, venture capital and asset
management. The Bank currently has subsidiaries in the United Kingdom,
 8

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. Our UK subsidiary has
established branches in Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange
and the National Stock Exchange of India Limited and its American
Depositary Receipts (ADRs) are listed on the New York Stock Exchange
(NYSE).

Banking operations are becoming increasingly customer dictated. The

demand for 'banking supermalls' offering one-stop integrated financial
services is well on the rise. The ability of banks to offer clients access to
several markets for different classes of financial instruments has become a
valuable competitive edge. Convergence in the industry to cater to the
changing demographic expectations is now more than evident.
Bancassurance and other forms of cross selling and strategic alliances will
soon alter the business dynamics of banks and fuel the process of
consolidation for increased scope of business and revenue. The thrust on
farm sector, health sector and services offers several investment linkages. In
short, the domestic economy is an increasing pie which offers extensive
economies of scale that only large banks will be in a position to tap. With
the phenomenal increase in the country's population and the increased
demand for banking services; speed, service quality and customer
satisfaction are going to be key differentiators for each bank's future
success. Thus it is imperative for banks to get useful feedback on their
 9

actual response time and customer service quality aspects of retail banking,
which in turn will help them take positive steps to maintain a competitive
edge.

The working of the customer's mind is a mystery which is difficult to solve

and understanding the nuances of what customer satisfaction is, a
challenging task. This exercise in the context of the banking industry will
give us an insight into the parameters of customer satisfaction and their
measurement. This vital information will help us to build satisfaction
amongst the customers and customer loyalty in the long run which is an
integral part of any business. The customer's requirements must be
translated and quantified into measurable targets. This provides an easy way
to monitor improvements, and deciding upon the attributes that need to be
concentrated on in order to improve customer satisfaction. We can recognize
where we need to make changes to create improvements and determine if
these changes, after implemented, have led to increased customer
satisfaction. "If you cannot measure it, you cannot improve it." - Lord
William Thomson Kelvin (1824-1907).

The Need to Measure Customer Satisfaction:

Satisfied customers are central to optimal performance and financial returns.

In many places in the world, business organizations have been elevating the
role of the customer to that of a key stakeholder over the past twenty years.
Customers are viewed as a group whose satisfaction with the enterprise must
be incorporated in strategic planning efforts. Forward-looking companies
are finding value in directly measuring and tracking customer satisfaction
 10

(CS) as an important strategic success indicator. Evidence is mounting that

placing a high priority on CS is critical to improved organizational
performance in a global marketplace.

With better understanding of customers' perceptions, companies can

determine the actions required to meet the customers' needs. They can
identify their own strengths and weaknesses, where they stand in
comparison to their competitors, chart out path future progress and
improvement. Customer satisfaction measurement helps to promote an
increased focus on customer outcomes and stimulate improvements in the
work practices and processes used within the company.

When buyers are powerful, the health and strength of the company's
relationship with its customers – its most critical economic asset – is its best
predictor of the future. Assets on the balance sheet – basically assets of
production – are good predictors only when buyers are weak. So it is no
wonder that the relationship between those assets and future income is
becoming more and more tenuous. As buyers become empowered, sellers
have no choice but to adapt. Focusing on competition has its place, but with
buyer power on the rise, it is more important to pay attention to the
customer.

Customer satisfaction is quite a complex issue and there is a lot of debate

and confusion about what exactly is required and how to go about it. This
article is an attempt to review the necessary requirements, and discuss the
steps that need to be taken in order to measure and track customer
satisfaction.
 11

What constitutes Satisfaction?

The meaning of satisfaction: "Satisfied" has a range of meanings to

individuals, but it generally seems to be a positive assessment of the
service.

The word "satisfied" itself had a number of different meanings for

respondents, which can be split into the broad themes of
contentment/happiness, relief, achieving aims, achieving aims and
happy with outcome and the fact that they did not encounter any hassle:

Happy

- Content
- Happy, pretty happy, quite happy
- Pleased
- Walked out of there feeling good
- Walk out of there chuffed
- Grateful the service has been OK

Relieved

- Thank God for that

- Phew
- At ease
- Can relax
- Stress reduction
- Secure
- Safe
 12

- Go to the bank with a troubled mind and they sort it out for you
- Sleep at night without worrying what's going to go on
- Everything is sorted out in your mind and you're happy
- Secure, you know the money has been sorted out
- Knowing the money's going to be there

Achieving aims

- Achieving your aim or goal

- Getting what you went in for
- Achieve whatever it is you wanted to achieve
- Come away with a proportion of what you want
- Got what wanted in the end
- Got what you went down for
- Everything went according to plan, the way it should have done
- Met expectations
- To be unsatisfied is when you come out and you are still on the same level
as you were before

Achieving aims, and happy with outcome

- Happy with the results

- Happy with what you've got
- When you walk out you're happy they've sorted everything out and quickly
- Happy with outcome
- Pleased with what's happened
- Content with what's been done for you
- A feeling of happiness having achieved your goal
 13

- You go in there feeling down and the only way you are going to come out
satisfied is if they have been good to you

No hassle

- Not frustrated
- Everything goes smooth
- No hassle
- No problems
- No hassle getting there
- Straightforward

Clearly then there is some variation in understanding of the term. Some of

the interpretations fit with the definitions used in much of the service quality
and satisfaction literature, where satisfaction is viewed as a zero state,
merely an assessment that the service is adequate, as opposed to "delight"
which reflects a service that exceeds expectations. However, most
respondents have more positive interpretations of the term. These questions
allow us to identify priorities for improvement by comparing satisfaction
with stated (overt) importance, comparing satisfaction with modeled
(covert) importance (from identifying key drivers of overall satisfaction), as
well as respondents' own stated priorities.

Service Quality and Customer Satisfaction:

There is a great deal of discussion and disagreement in the literature about

the distinction between service quality and satisfaction. The service quality
school view satisfaction as an antecedent of service quality - satisfaction
with a number of individual transactions "decay" into an overall attitude
 14

towards service quality. The satisfaction school holds the opposite view that
assessments of service quality lead to an overall attitude towards the service
that they call satisfaction. There is obviously a strong link between customer
satisfaction and customer retention. Customer's perception of Service and
Quality of product will determine the success of the product or service in the
market.

If experience of the service greatly exceeds the expectations clients had of

the service then satisfaction will be high, and vice versa.. In the service
quality literature, perceptions of service delivery are measured separately
from customer expectations, and the gap between the two provides a
measure of service quality.

Expectations and Customer Satisfaction:

Expectations have a central role in influencing satisfaction with services,

and these in turn are determined by a very wide range of factors lower
expectations will result in higher satisfaction ratings for any given level of
service quality. This would seem sensible; for example, poor previous
experience with the service or other similar services is likely to result in it
being easier to pleasantly surprise customers. However, there are clearly
circumstances where negative preconceptions of a service provider will lead
to lower expectations, but will also make it harder to achieve high
satisfaction ratings - and where positive preconceptions and high
expectations make positive ratings more likely. The expectations theory in
much of the literature therefore seems to be an over-simplification.
 15

OBJECTIVE OF THE STUDY

 To study whether the customers are satisfied with their services among
ICICI bank and SBI bank
 To know about the Customer preferences among ICICI and SBI bank
 To give Suggestions to improve the services

SCOPE OF THE STUDY

The scope of the study is confined in comparing the Public sector and
private sector banks in terms of customer satisfaction. The study will be
undertaken on the basis of sample survey.

LIMITATIONS OF THE STUDY

⇒ This study is geographically restricted to Delhi city only.

⇒ The study was limited to a particular branch of SBI and ICICI bank.
⇒ Since the time is less we have taken a sample of only 30 people and it
will not reveal the whole population of a country.
 16

⇒ The sample size is small due to the specified reasons.

⇒Finding are based on sample survey through questionnaires method.

Hence there is a scope for the respondents to be biased or pretentious

RESEARCH METHODOLOGY

Sample and data collection

The target population in this research refers to the bank customers who are
having an account in SBI bank and ICICI bank due to the convenience in
collecting the data. The respondents can be any gender, any income level,
any occupation and any education level.The study provides a representative
sample of banks customers in Delhi only.

Sampling unit

The sampling units are customers of ICICI bank and SBI bank.

Sampling method

For this research we use non-probability sampling in which the element in

the population does not have any probability attached to their being chosen
as sample subjects
 17

Sample size

In this research we selected 30 respondents as the sample size due to limited

of time by asking them that they are having an account in SBI bank and
ICICI bank due to the convenience in collecting the data. The respondents
can be any gender, any income level, any occupation and any education
level.

Sampling plan

The researcher is going to collect the data from the ATMS and also by
visiting the bank.

Sources of data

The data is basically primary in nature

It was obtained from the customers by filling questionnaires.

Data Collection Method:

Our communication approach was basically structured questioning, that is

personal interview with the aid of printed questionnaires.
 18

CHAPTER-2

LITERATURE REVIEW

Not so long ago, accessing our own money was about setting aside a couple
of hours, getting to the bank before closing time, standing in one queue to
get a token and then in another to collect the cash. Those were the pre-
economic reforms days, when the banking sector primarily consisted of
public sector banks. Cut to the present day and the nature of banking has
changed beyond recognition. With ATM cards, simple banking transactions
like withdrawing and depositing money are easier than ever before. For the
tech-savvy, there is the option of banking online. The next medium may just
be your mobile.

Even when it comes to products, the changes have been many. Graduating
from simple savings accounts and fixed and recurring deposits, banks now
offer a host of products like special savings account and sweep-in-account,
no frills accounts and easy receive account. Private sector banks may have
 19

taken the lead, but public sector banks, with their vast client base and
unparalleled treasury of trust, are evolving their own brand of customer-
friendliness.

Because satisfaction is basically a psychological state, care should be taken

in the effort of quantitative measurement, although a large quantity of
research in this area has recently been developed. Work done by Berry (Bart
Allen) and Brodeur between 1990 and 1998 defined ten 'Quality Values'
which influence satisfaction behavior, further expanded by Berry in 2002
and known as the ten domains of satisfaction. These ten domains of
satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access,
Environment, Inter-departmental Teamwork, Front line Service Behaviors,
Commitment to the Customer and Innovation. These factors are emphasized
for continuous improvement and organizational change measurement and
are most often utilized to develop the architecture for satisfaction
measurement as an integrated model. Work done by Parasuraman, Zeithaml
and Berry (Leonard L) between 1985 and 1988 provides the basis for the
measurement of customer satisfaction with a service by using the gap
between the customer's expectation of performance and their perceived
experience of performance. This provides the measurer with a satisfaction
"gap" which is objective and quantitative in nature. Work done by Cronin
and Taylor propose the "confirmation/disconfirmation" theory of combining
the "gap" described by Parasuraman, Zeithaml and Berry as two different
measures (perception and expectation of performance) into a single
measurement of performance according to expectation. According to
 20

Garbrand, customer satisfaction equals perception of performance divided

by expectation of performance.

The usual measures of customer satisfaction involve a survey with a set of

statements using a Likert Technique or scale. The customer is asked to
evaluate each statement and in term of their perception and expectation of
performance of the organization being measured.

The working of the customer's mind is a mystery which is difficult to solve

and understanding the nuances of what customer satisfaction is, a
challenging task. This exercise in the context of the banking industry will
give us an insight into the parameters of customer satisfaction and their
measurement. This vital information will help us to build satisfaction
amongst the customers and customer loyalty in the long run which is an
integral part of any business. The customer's requirements must be
translated and quantified into measurable targets. This provides an easy way
to monitor improvements, and deciding upon the attributes that need to be
concentrated on in order to improve customer satisfaction. We can recognize
where we need to make changes to create improvements and determine if
these changes, after implemented, have led to increased customer
satisfaction.

"If you cannot measure it, you cannot improve it." - Lord William
Thomson Kelvin (1824-1907).
 21

Customer satisfaction in Indian banking: a case of Yamuna Nagar District in

Haryana

Present study has been restricted to time period from June 2007 to August
2007 in Yamuna Nagar and Jagadhri. ICICI Bank of Yamuna Nagar town
has been taken as a representative unit of private banks and SBI Bank has
been taken as a representative unit of public sector banks. A survey of 100
people has been conducted who are the general people of the banks.
Doctors, businessmen, professors and persons from self employed category,
etc, have been surveyed.

Analysis and Interpretation of the case study

In line with the objective of the study, the main areas of questioning and
analysis concerned perceptions of service quality and its dimensions:
tangibility, reliability, responsiveness, assurance and empathy. As stated,
perceptions were measured on a seven point strongly agree to strongly
disagree scale. Mean differences between service quality perceptions of
banks and respective customers were calculated separately for SBI and
ICICI.The analysis clearly shows that there exists wide perceptual difference
among Indian (public sector) banks regarding overall service quality with
their respective customers, whereas the said perceptual difference in private
banks is narrows.

The high mean difference of SBI shows that there is a significant difference
in the quality of service being delivered by SBI with the quality of service as
perceived by their respective customers. In other words, service quality
delivered by banks such as SBI does not match the expectations of their
 22

respective customers. Though, ICICI Bank is also below its assessment of

delivering quality service to its customers, yet the perceptual difference is
narrow when compared with SBI.

Dimension-wise Analysis

Tangibility: The data brings to light the high difference in the perceptions
of the banks--SBI and ICICI with their respective customers on tangibles.
The data reveals that banks such as ICICI are exceeding the perceptions of
their respective customers, while SBI with a high mean difference fall much
below the perceptions of their customers on this dimension of service
quality. The element wise analysis of tangibility shows serious short fall of
perceptions among banks like SBI on up to date equipments and physical
facilities available in a bank as perceived by their respective customers.

Reliability

The analysis of reliability dimension of service quality shows significant

differences in the perceptions of SBI with their respective customers. SBI
shows that they fall below the expectations of their customers in delivering
quality services, whereas ICICI bank is exceeding the perceptions of their
customers in this dimension. The element wise analysis of reliability shows
that SBI is far below the perceptions of their respective customers as far as
keeping promise and being sincere in solving the problems are concerned.
 23

CHAPTER-3

ANALYSIS, FINDINGS AND RECOMMENDATIONS

Information of the respondents:

AGE OF THE RESPONDENTS

The table and the graph below explains about the age of the respondents. 13
respondents out of 30 are in between the age of 25-35 years which is approx.
43.33%. And 5 out of 30 are in the age group of 36-45 years which is
approx. 16.66%. Then 9 out of 30 are in between the age group of 46-55
 24

years which is 30% and last 3 respondents are of 55 years and above which
is 10%.

Frequency Percent
20YRS-35YRS 13 43.33
36YRS-45YRS 5 16.66
46YRS-55YRS 9 30
ABOVE 55YRS 3 10
Total 30 100

100

80
25YRS-35YRS
60 36YRS-45YRS
46YRS-55YRS
40
ABOVE 55YRS
20 Total
0
Frequency Percent

OCCUPATION OF THE RESPONDENTS

The below table and graph shows the occupations of the 30 respondents.
These respondents are divided in 4 categories and which are of salaried
persons, professionals , supervisor and managerial. 25 out of 30 respondents
are salaried persons which is approx. 80.6% and 1 each of professional and
supervisor which is just 3.2%. Rest 3 out of 30 respondents are in
managerial occupation i.e are managers in the companies.
 25

FrequencyPercentSALARIED
PERSON2580.6PROFESSIONALS13.2SUPERVISOR13.2MANAGERIA
L310.0Total30100

100

80
SALARIED PERSON
60 PROFESSIONALS
SUPERVISOR
40
MANAGERIAL
20 Total

0
Frequency Percent

INCOME LEVEL OF THE RESPONDENTS

The below table and graph shows the in come level of the respondents which is divided
in 4 ranges i.e, Rs.5,000-15,000, Rs.15,001-25,000, Rs.25,001-35,000 and above
Rs.45,000. 17 out of 30 respondents are in the first range which is the lowest income
range but constitutes the major share which is 54.8%. Then 8 are in the second range
which is 25.8%. 4 out os 30 are in the third range which is just 12.9%. Only one is the
highest range of Rs. 45,000 and above.which makes the smallest share i.e, 3.2% only.
FrequencyPercentRs.5,000-Rs.15,0001754.8Rs.15,001-Rs.25,000825.8Rs.25,001-
Rs.35,000412.9Above Rs.35,00013.2Total30100

µ§
ANALYSIS
PUBLIC SECTOR BANK (SBI)
STRONGLY DISAGREEDISAGREENEUTRALAGREESTRONGLY AGREENOT
USING THE SRVICEMOBILE BANKING0%0%0%0%0%100%BRANCH
BANKING4%8%60%28%0%0%INTERNET BANKING0%0%0%0%0%100%ATM
BANKING0%0%52%28%0%20%(SERVICE N/A)
PRIVATE SECTOR BANK (ICICI)
STRONGLY DISAGREEDISAGREE NEUTRAL AGREESTRONGLY AGREENOT
USING THE SRVICEMOBILE BANKING0%0%20%4%0%76%BRANCH
BANKING0%0%36%60%4%0%INTERNET BANKING0%0%16%12%0%72%ATM
BANKING0%0%36%48%16%0%EXPLANATION OF THE TABLE
76% of the customers are not using moble banking in private sector banks whereas 100%
of the customers are not using the mobile banking in public sector banks.
100% of the customer of private sector banks are satisfied with the behaviour of the staff
out of which 40% are very satisfied and 20% are highly satisfied. Whereas 68% of the
customers of public sector banks are satisfied with the behaviour of the staff out of which
20% are very satisfied
 26

28% of the customers are using internet banking in private sector banks and all are
satisfied with the service whereas in public sector banks no customer is using the internet
banking
80% of the customers are using ATM banking in public sector banks and rest 20% are
not using because this service is not provided by their banks (e.g. Union Bank of India)
whereas 100% of the customers are using ATM banking in private sector banks out of
which 36 % are satisfied; 48% are very satisfied and 16% are highly satisfied. This
shows a very high rate of customer satisfaction level in Private sector banks
In public sector banks 52% 0f the customers are satisfied and 28% are very satisfied
with ATM banking whereas in private sector banks 48 % of the customers are very
satisfied and 16% of the customers are highly satisfied with the service.

FINDINGS
Customer satisfaction level is higher in Private sector banks as compared with the Public
Sector Banks
Reasons of Dissatisfaction in Public sector banks
Behaviour and attitude of the staff in public sector banks is the first reason of customer
dissatisfaction.
Time taken to process the transaction is the second reason of customer dissatisfaction.
Many of the services are not provided by the Public sector banks when compared with
the Private sector banks e.g. ATM Banking is not provided by Union Bank of India.
Internet Banking and Mobile banking is also not provided by many of the Public sector
banks.
Continuous services are not provided by ATM machines installed by various Public
sector banks.
RECOMMENDATIONS
Since many of the respondents are not aware of there key services. The bank has to take
some initiatives.
The bank can post a list of services that they are rendering to the customers inside the
bank Premises.
Banks can post demo of all these services in their website.
The staff should be adequately trained to deal with the customer on one to one basis and
to encourage face to face dealing.
Many public sector banks need to revive their infrastructure to have pace with the
competing environment.
Many of the services needs improvement in public sector banks e.g. ATM facilities.
Staff should be friendly and approachable.
Clearly defined customer policy should be adopted by the banks.
Customer’s needs should be anticipated in advance so that they can be helped out in a
better way.
Treat your customers like your friends and they'll always come back.
Honour your promises.
Customer service must match with marketing efforts, otherwise a customer would remain
a dissatisfied soul and all marketing efforts will go down the drain. The process of
fulfilling customer needs, therefore, requires tailoring bank services to what customers
 27

want, rather than making them accept whatever banks can conveniently provide. The
needs and expectations of the customer changes from time to time and, as such,
innovating of new services and refinement of existing services is imperative. Today,
customers are exposed to the standards of international banking and expect the same
range of service quality from Indian banks. If public sector banks fail to regulate the
quality and efficiency of their financial services to match or surpass those of private
banks or foreign banks, time is not far away when they will lose substantial market share
to private and foreign banks.
Banks must pay attention to potential failure points and service recovery procedures,
which become integral to employees' training. In other words, it amounts to empowering
employees to exercise responsibility, judgment and creativity in responding to customers'
problems.
The above also suggest the need and relevance of heavy investment on tangibles
particularly computer based banking, internet and intranet services, tele-banking,
'anywhere and anytime banking', etc., besides physical facilities and communication
material. This will help in delivering quick and accurate services to customers as well as
reducing the workload of frontline staff and thereby providing ways to employees to
respond to customer requests. This investment will also ensure convenient banking hours
on which the services of our banks are perceived by the customers to be very low.
Banks should continually assess and reassess how customers perceive bank services so as
to know whether the bank meets or exceeds or is below the expectations of their
customers. Such an appraisal, however, is a tedious task because customer service is
complex in nature and dynamic in action. Moreover, it can vary greatly from one branch
to another. Also, what is 'good service' today may become 'indifferent service' tomorrow
and 'bad service' the next day. Frequent customer surveys, therefore, throw light on
ratification and refinement which will go a long way to improve the service quality in
banks.

CHAPTER-4
SUMMARY AND CONCLUSION

The working of the customer's mind is a mystery which is difficult to solve and
understanding the nuances of what customer satisfaction is, a challenging task. This
exercise in the context of the banking industry will give us an insight into the parameters
of customer satisfaction and their measurement. In the organised segment, banking
system occupies an important place in nation’s economy. It plays a pivotal role in the
economic development of a country and forms the core of the money market in an
advanced country. The commercial banks in India comprise of both Public sector as well
as private sector banks. There are total 28 Public sector and 27 private sector banks are
functioning in the country presently. Banks have to deal with many customers everyday
and render various types of services to its customer.It's a well known fact that no
business can exist without customers.
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Not so long ago, accessing our own money was about setting aside a couple of hours,
getting to the bank before closing time, standing in one queue to get a token and then in
another to collect the cash. Those were the pre-economic reforms days, when the banking
sector primarily consisted of public sector banks.
The banking industry like many other financial service industries is facing a rapidly
changing market, new technologies, economic uncertainties, fierce competition and more
demanding customers and the changing climate has presented an unprecedented set of
challenges . Banking is a customer oriented services industry, therefore, the customer is
the focus and customer service is the differentiating factors .
The banking industry in India has undergone sea change since post independence. More
recently, liberalization, the opening up of the economy in the 90s and the government's
decision to privatize banks by reduction in state ownership culminated in the banking
reforms based on the recommendations of Narasimha Committee. The prime mover for
banks today is profit, with clear indications from the government to 'perform or perish'.
Banks have also started realizing that business depends on client service and the
satisfaction of the customer and this is compelling them to improve customer service and
build up relationship with customers.
The main driver of this change is changing customer needs and expectations. Customers
in urban India no longer want to wait in long queues and spend hours in banking
transactions. This change in customer attitude has gone hand in hand with the
development of ATMs, phone and net banking along with availability of service right at
the customer's doorstep. With the emergence of universal banking, banks aim to provide
all banking product and service offering under one roof and their endeavor is to be
customer centric. With the emergence of economic reforms in world in general and in
India in particular, private banks have come up in a big way with prime emphasis on
technical and customer focused issues.

The purpose of this paper is to compare the public sector banks and private sector banks
in terms of customer satisfaction and to find out the various reasons of customer
dissatisfaction in these banks. The data was collected by getting the questionnaire filled
by the respondents who were using the banking services.

Conclusion and Policy Implications

The banking sector in India is undergoing major changes due to competition and the
advent of technology. The customer is looking for better quality services which enhance
his/her satisfaction. This study derives its basis from various research findings and is also
in line with empirical findings with respect to customer satisfaction by other researchers.
To sum up, the results of the study lead us to the following conclusion and policy
implication:
* The customer satisfaction in terms of service quality is a relational marketing
paradigm. The relationships are mostly viewed from the perspective of the firm providing
services. For service firm in our case the banks, building strong relationship is important
for improving customer satisfaction through service quality.
* Public sector banks like SBI fall much below the perceptions of their customers on all
dimensions of service quality. Private Banks such as ICICI bank are exceeding the
perceptions of their customers on tangibility and reliability dimensions of service quality.
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* Banks like ICICI are closer as regards expectations of their customers. They are also
not far away from the perceptions of their customers as far as other dimensions of service
quality are concerned. This observation undoubtedly reveals the bleak reality that SBI
does not meet the expectations of their customers. In delivery of quality service in banks,
what matter are speed, accuracy, promptness, reliability, individualized attention, etc.
Better results can be achieved through proper use of relevant banking technology. These
are the areas where our banks are still lagging behind.

BIBLIOGRAPHY
C R Kothari – Research methodology
P N Varshney – Banking law and Practice
Customer satisfaction in Indian banking: a case study of Yamuna Nagar District in
Haryana
µPolitical Economy Journal of India§ , µJan-June, 2008§ by µRaj Kumar§
Customer Satisfaction Key Growth to Banks : An article from The Hindu
Article on customer relationship management in banking sector by Dr FB Singh
Article on Measuring Customer Satisfaction in The Banking Industry By Dr Manoj
Kumar Das
Internet websites:
µwww.google.com§
µwww.rbi.gov.in§
µwww.iba.org.in§
µhttp://en.wikipedia.org/wiki/Customer_satisfaction§