“Customer satisfaction in public sector banks”

A
PROJECT REPORT ON
“CUSTOMER SATISFACTION IN PUBLIC SECTOR BANKS”

Submitted to
Alpine Institute of Management,
Ujjain
Towards
Partial fulfillment of the requirement for the award of degree of
Master of Business Administration
Of
Vikram University, Ujjain (M.P.)
2010-12

Submitted By
Chetan Gehlot
MBA-IV Semester (Batch 2010-12)
Alpine Institute of Management

1

CONTENT

Chapter Particulars Page
1:- Introduction 5
I. About the topic 5
II. Objective & significance of the 13
study
2:- Literature review 14
3:- Research methodology 19
I. The study 19
II. The sample 19
III. The tool(s) for data collection 20
IV. The tool(s) for data analysis 20

4:- Data Analysis and Interpretation 21
5:- Limitation and Scope 33
6:- Findings & Conclusion 34

7:- Recommendations 37
Bibliography and Webliography 38
Any Annexure or Appendix (Give the 42
name and Number)

2

DECLARATION BY THE CANDIDATE

I, ChetanGehlot , student of MBA-IV semester (Batch 2010-
12), at Alpine Institute of Management, affiliated to Vikram
University, Ujjain, declare that the project entitled
“CUSTOMER SATISFACTION IN PUBLIC SECTOR
BANKS” is my own work approved by the Director of the
Institute. I further declare that to the best of my knowledge,
the project report does not contain any part of any work, which
has been submitted for the award of any degree.

Signature of the Candidate
(Chetan Gehlot)
Forwarded by Director
Alpine Institute of Management, Ujjain

3

ACKNOWLEDGEMENTS
I feel elated in expressing my deep sense of respect and
gratitude to my respected Guide and Supervisor Prof. Vijay
Prajapati whose kind academic contribution further guidance
and motivation throughout the study has made it possible for
me to complete this research work.

I am extending my sincere thanks to Prof. Vijay Prajapati for
providing me support for accomplishing the work.

I would like to extend my thanks to all respondents of the
different organizations for providing me help in data
collection.

4

CHAPTER-1

INTRODUCTION

ABOUT THE TOPIC-:
Banks are the important component of any financial system. They
play important role of channelizing the savings of surplus sectors to
deficit sectors. The efficiency and competitiveness of banking system
defines the strength of any economy. Indian economy is not an
exception to this and banking system in India also plays a vital role in
the process of economic growth and development. After the series of
banking sector reforms in last decade the Indian commercial banks
has pass through certain developments and challenges. At the one
hand the efficiency and Outlook of banks has improved due to
technological development and customer orientation but at the same
time increasing level of NPA's becomes serious concerns for banks.
Indian banking, which was operating in a highly comfortable
environment till the beginning of the 1990s, has been pushed into the
choppy water of intense competition. The modern banking activity is
marked by itineraries into un-chartered horizons mingled with risks
and heavy competition. Immediately after nationalization, the Public
Sector Banks spread their branches to remote areas at a rapid pace
their main objective was to act on behalf of the government to Fulfill
economic obligations towards the common man. They acted over
enthusiastically in penetrating into far-flung and remote corners of the

5

country. The social responsibility that was entrusted upon the Public
sector Banks digresses them from the profit motive. On the other hand
private and foreign banks did not make such moves. Instead, they
pursued profit making as the objective for their operations. In 1992
the RBI launched banking sector reforms, as per the recommendations
made by the Narasimhan Committee on financial reforms to create a
more profitable, efficient and sound banking system. The reforms
opened the banking sector for private players. Domestic private sector
banks are divided into two categories old banks which existed with
the public sector banks before the entry deregulation and the new
banks that came into existence after the reforms of 1992. The old
banks are smaller in size and are regional. In contrast the new private
sector banks are much larger in size, operate primarily in metros and
are technologically superior. Interestingly, unlike many developing
countries, where the government owned financial institutions own
major equity of the private banks, the equity share holders of the old
private sector banks were mainly non government bodies. However,
most of the new private sector banks, in India are promoted by the
government owned financial Institutions. These banks, too, are in the
process of reducing promoter‟s stake by raising funds through the
capital market. These developments in the area of banking regulations
has made public sector banks more concerned about their position and
place in the Indian banking industry. On the other hand, banks in
private sector and foreign sector are making their operations in their
own way. There is a big difference in the operation style of these

6

different types of bank groups. So, there is a need to compare and
evaluate the operations of these different bank groups and their
achievements on different parameters. In the organized 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. 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.

Emergence of public sector banks

The Central Government entered the banking business with the
nationalization of the Imperial Bank of India in 1955. A 60% stake
was taken by the Reserve Bank of India and the new bank was named
as the State Bank of India. The seven other state banks became the
subsidiaries of the new bank when nationalized on 19 July 1960. The
next major nationalization of banks took place in 1969 when the
government of India, under prime minister India Gandhi, nationalized
an additional 14 major banks. The total deposits in the banks
nationalized in 1969 amounted to 50 crores. This move increased the
presence of nationalized banks in India, with 84% of the total
branches coming under government control.

7

The next round of nationalization took place in April 1980. The
government nationalized six banks. The total deposits of these banks
amounted to around 200 crores. This move led to a further increase in
the number of branches in the market, increasing to 91% of the total
branch network of the country. The objectives behind nationalization
where:

To break the ownership and control of banks by a few business
families,
To prevent the concentration of wealth and economic power,
To mobilize savings from masses from all parts of the country,
To cater to the needs of the priority sectors

Public sector banks before the economic liberalization

The share of the banking sector held by the public banks continued to
grow through the 1980s, and by 1991 the public sector banks
accounted for 90% of the banking sector. A year later, in March,
1992, the combined total of branches held by public sector banks was
60,646 across India, and deposits accounted for Rs. 1,10,000 crore.
The majority of these banks were profitable, with only one out of the
27 public sector banks reporting a loss.

Public sector banks after the reforms

After the reforms in the early 1990s, the nationalized banks saw a
change in fortunes: in 1992-93, 12 of the nationalized banks reported
losses, and the other seven nationalized banks reported marginal
8

profits. 1995-96 saw a similar problem, with nationalized banks
reporting a combined loss of Rs. 1160 crores. However, the early
2000s saw a reversal of this trend, such that in 2002-03 a profit of Rs.
7780 crores by the public sector banks: a trend that continued
throughout the decade, with a Rs. 16856 crore profits in 2008-2009.

Public sector banks are the ones in which the government has a major
holding. They are divided into two groups i.e. Nationalized Banks and
State Bank of India and its associates. Among them, there are 19
nationalized banks and 8 State Bank of India associates. Public Sector
Banks dominate 75% of deposits and 71% of advances in the banking
industry. Public Sector Banks dominate commercial banking in India.
These can be further classified into:
1) State Bank of India
2) Nationalized banks
3) Regional Rural Banks

Classification of Banks:

The Indian banking industry, which is governed by the Banking
Regulation Act of India 1949 can be broadly classified into two
major categories, non-scheduled banks and scheduled banks.
Scheduled banks comprise commercial banks and the co-operative
banks. In Terms of ownership, commercial banks can be further
grouped into nationalized banks, the State Bank of India and its group
banks, regional rural banks and private sector banks (the old / new

9

domestic and foreign). These banks have over 67,000 branches
spread across the country. The Indian banking industry is a mix of
the public sector, private sector and foreign banks. The private sector
banks are again spilt into old banks and new banks.

Banking System in
India

Reserve bank of India (Controlling Authority)

Development Financial institutions Banks

IFCI IDBI ICICI NABARD NHB IRBI EXIM

Bank SIDBI

Commercial Regional Rural Land Development
Cooperative

Banks Banks Banks Bank

Public Sector Banks Private Sector Bank

SBI Groups Nationalized Banks Indian Banks Foreign
Banks

10

List of public sector banks

>> Public Sector Banks

Sr.No Public Sector Banks Web Site

1 Allahabad Bank www.allahabadbank.in

2 Andhra Bank www.andhrabank.in

3 Bank of Baroda www.bankofbaroda.com

4 Bank of India www.bankofindia.com

5 Bank of Maharashtra www.bankofmaharashtra.in

6 Canara Bank www.canarabank.com

7 Central Bank of India www.centralbankofindia.co.in

8 Corporation Bank www.corpbank.com

9 Dena Bank www.denabank.com

10 IDBI Bank Limited www.idbi.com

11 Indian Bank www.indianbank.in

12 Indian Overseas Bank www.iob.in

Oriental Bank of
13 www.obcindia.co.in
Commerce

14 Punjab & Sind Bank www.psbindia.com

15 Punjab National Bank www.pnbindia.com

11

16 State Bank of India www.statebankofindia.com

17 Syndicate Bank www.syndicatebank.in

18 UCO Bank www.ucobank.com

19 Union Bank of India www.unionbankofindia.co.in

20 United Bank of India www.unitedbankofindia.com

21 Vijaya Bank www.vijayabank.com

CUSTOMER SATISFACTION

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
and is part of the four perspectives of a Balanced Scorecard.
Customer satisfaction is an abstract concept and the actual
manifestation of the state of satisfaction will vary from person to
person and product/service to product/service. The state of
satisfaction depends on a number of both psychological and physical
variables which correlate with satisfaction behaviors such as return
and recommend rate. The level of satisfaction can also vary
depending on other factors the customer, such as other products
against which the customer can compare the organization's products.
Satisfaction with banking services is an area of growing interest to
researchers and managers. The commercial banking industry like

12

many other financial service industries is facing rapidly changing
market. New technologies, economic uncertainties, fierce competition
and more demanding customers and the changing climate have
presented an unprecedented set of challenges. Intangible assets,
particularly brands and customers, are critical to any organization and
in today‟s competitive environment relationship marketing is critical
to banking corporate success.
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 .

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 (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

13

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.

MEASURING CUSTOMER SATISFACTION IN THE
BANKING INDUSTRY

14

Banking operations are becoming increasingly customer dictated. The
demand for „Banking supermalls‟ offering one-stop integrated
financial services are 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. Ban assurance 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. 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

15

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).

16

Objectives of the study

This study has the following specific objectives that would be
significant in order To come up with a credible set of data that would
the bases for analysis and drawing of the conclusions.

To find out the level of expectation and the level of perception
of the customers from the services offered by the banks.
To compare the level of perception and expectation of the
services offered by the banks.
To know which service quality dimension the bank is
performing well and in which dimension it needs improvement.
To know the preference towards the public sector and private
sector banks.

17

Significance of the Study

The outputs and data that can be drawn from this research will be of
great Contribution to the field in the academics and for the
practitioners. This study will try to assess and evaluate the level of
satisfaction of the customers in the banking business in India, thus
revealing and studying the salient and influential factors that could
affect the satisfaction of the customers. It will also reveal areas and
factors that need consideration for improvement. It will also try to
link the relationship, if any, of the customer satisfaction level and the
success of the firm, in support of the other previous literatures. This
study then will ultimately assess and reveal the strong points of the
Indian banking and its edges as reasons for the continuous boom and
development in it banking industries.

18

CHAPTER-2
LITERATURE REVIEW

Customer satisfaction is an important theoretical as well as practical
issue for most marketers and consumer researchers. Customer
satisfaction can be considered the essence of success in today‟s highly
competitive world of business. Thus the significance of customer
satisfaction and customer retention in strategy development for a
market oriented and customer focused firm cannot be overstated.
Consequently, customer satisfaction is increasingly becoming a
corporate goal as more and more companies strive for quality in their
product and services. Customer satisfaction is the feeling or attitude
of a customer towards a product or services after it has been used and
is generally described as a full meeting of one‟s expectations.
Customer satisfaction is a major outcome of marketing activity
whereby it serves as a link between the various stages of consumer
buying behavior. For instance, if customers are satisfied with
particular service offering after its use, then they are likely to engage
in repeat purchase and try line extensions .A study conducted by
Levesque and McDougall confirmed and reinforced the idea that
unsatisfactory customer service leads to a drop in customer
satisfaction and willingness to recommend the service to a friend.
This would in turn lead to an increase in the rate of switching by
customers.

19

I. Parasuraman, Zeithaml and Berry (Leonard L) -:
Work done by Parasuraman, Zeithaml and Berry (Leonard L)
between 1985 and 1988 delivered SERVQUAL which 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
researcher with a satisfaction "gap" which is semi-quantitative in
nature. Cronin and Taylor extended the disconfirmation theory by
combining the "gap" described by Parasuraman, Zeithaml and Berry
as two different measures (perception and expectation) into a single
measurement of performance relative to expectation.
"Satisfaction" itself can refer to a number of different facts of the
relationship with a customer. For example, it can refer to any or all of
the following:
Satisfaction with the quality of a particular product or service

Satisfaction with an ongoing business relationship

Satisfaction with the price-performance ratio of a product or
service.
II. Lord William Thomson Kelvin (1824-1907)-:
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

20

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."

III. Berry (Bart Allen) and Brodeur between 1990 and 1998-:
Consumer satisfaction is basically a psychological state, car taken in
the 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-department Teamwork, Front line Service
Behaviors, Commitment to the Customer and Innovation. These
factors are emphasized for continuous improvement and
organizational change measurement as an integral model.

21

IV. Roma Mitra, Shankar Ravi (2008)-:
A stable and efficient banking sector is an essential precondition to
increase the economic level of a country. This paper tries to model
and evaluate the efficiency of 50 Indian banks. The Inefficiency can
be analyzed and quantified for every evaluated unit. The aim of this
paper is to estimate and compare efficiency of the banking sector in
India. The analysis is supposed to verify or reject the hypothesis
whether the banking sector fulfils its intermediation function
sufficiently to compete with the global players. The results are
insightful to the financial policy planner as it identifies priority areas
for
performance of Banking Sectors in India.

22

SWOT Analysis

The banking sector is also taken as a proxy for the economy as a
whole. The performance of bank should therefore, reflect “Trends in
the Indian Economy”. Due to the reforms in the financial sector,
banking industry has changed drastically with the opportunities to the
work with, new accounting standards new entrants and information
technology. The deregulation of the interest rate, participation of
banks in project financing has changed in the environment of banks.
The performance of banking industry is done through SWOT
Analysis. It mainly helps to know the strengths and Weakness of the
industry and to improve will be known through converting the
opportunities into strengths. It also helps for the competitive
environment among the banks.

a) STRENGTHS

1. Greater securities of Funds
Compared to other investment options banks since its inception has
been a better avenue in terms of securities. Due to satisfactory
implementation of RBI‟s prudential norms banks have won public
confidence over several years.

2. Banking network
After nationalization, banks have expanded their branches in the
country, which has helped banks build large networks in the rural and

23

urban areas. Private banks allowed to operate but they mainly
concentrate in metropolis.

3. Large Customer Base
This is mainly attributed to the large network of the banking sector.
Depositors in rural areas prefer banks because of the failure of the
NBFCs.

4. Low Cost of Capital
Corporate prefers borrowing money from banks because of low cost
of capital. Middle income people who want money for personal
financing can look to banks as they offer at very low rates of interests.
Consumer credit forms the major source of financing by banks.

b) WEAKNESS

1. Basel Committee

The banks need to comply with the norms of Basel committee but
before that it is challenge for banks to implement the Basel committee
standard, which are of international standard.

2. Powerful Unions

Nationalization of banks had a positive outcome in helping the Indian
Economy as a whole. But this had also proved detrimental in the form
of strong unions, which have a major influence in decision-making.
They are against automation

3. Priority Sector Lending
24

To uplift the society, priority sector lending was brought in during
nationalization. This is good for the economy but banks have failed to
manage the asset quality and their intensions were more towards
fulfilling government norms. As a result lending was done for non-
productive purposes.

4. High Non-Performing Assets

Non-Performing Assets (NPAs) have become a matter of concern in
the banking industry. This is because reduced to meet the
international standards of change in the total outstanding advances,
which has to be reduced to meet the international standards.

c) OPPORTUNITIES

1. Universal Banking
Banks have moved along the value chain to provide their customers
more products and services. Like home finance, Capital Markets,
Bonds etc. Every Indian bank has an opportunity to become universal
bank, which provides every financial service under one roof.

2. Differential Interest Rates
As RBI control over bank reduces, they will have greater flexibility to
fix their own interest rates which depends on the profitability of the
banks.

25

3. High Household Savings
Household savings has been increasing drastically. Investment in
financial assets has also increased. Banks should use this opportunity
for raising funds.

4. Untapped Foreign Markets
Many Indian banks have not sufficiently penetrated in foreign markets
to generate satisfactory business therefore, it can be concluded clear
opportunity exists in such markets.

5. Interest Banking
The advance in information technology has made banking easier.
Business can Effectively carried out through internet banking.

d) THREATS

1. NBFCs, Capital Markets and Mutual funds
There is a huge investment of household savings. The investments in
NBFCs deposits, Capital Market Instruments and Mutual Funds are
increasing. Normally these instruments offer better return to investors

2. Changes in the Government Policy
The change in the government policy has proved to be a threat to the
banking sector. Due to some major changes in policies related to
deposits mobilization credit deployment, interest rates- the whole
scenario of banking industry may change.

26

3. Inflation
The interest rates go down with a fall in inflation. Thus, the investors
will shift his investments to the other profitable sectors

4. Recession
Due to the recession in the business cycle the economy functions
poorly and this has proved to be a threat to the banking sector. The
market oriented economy and globalization has resulted into
competition for market share.

27

CHAPTER-3

RESEARCH METHODOLOGY

THE STUDY-:

Research methodology deals with a systematic and scientific methods
that can be adopted to solve research problems. Methodology is a
crucial step in any research because it directly influences the whole
research and its findings. The present study will be carried out to gain
an insight into the customer satisfaction level with the quality of
services provided by public sector banks.

Scope of the study:

The study would try to throw some insights into the existing services
provided by the banks and the gap between the customer expectations,
perceptions and the actual state of performance. The results of the
study would be able to recognize the lacunae in the system and thus
provide key areas where improvement is required for better
performance and success ratio.

Sampling plans:

The marketing researcher must design a sampling plan, which calls
for three decisions –

A) Sampling unit -Who is to be surveyed?

B) Sample size -How many people should be surveyed?

28

C) Sampling Procedure - How should the respondents be chosen?

SAMPLING PROCESS & SIZE Research being exploratory in
nature, a simple random & convenient sampling was taken in to
consideration. 100 consumers, CONTACT METHOD Used can be
personal interviewing.

Data Sources:

For the research purpose, the researcher does data collection. For
successful efficient marketing research investigation, the researcher
must be familiar with the nature of the data as well as the data
collection method.

Sources of data collection-:

Sources of data collection state the various sources of data from
where we collect the information‟s for the comparative analysis.

 Primary Data:

It is collected through structured questionnaire by conducting
survey.

 Secondary Data:

 Books
 websites
 database at public sector Bank
 library research

29

Research Questions:
What are the major factors affecting customers‟ satisfaction with the
quality of services? What is the level of customer satisfaction with the
quality of services provided by public sector, private sector and
foreign banks? Do customers switch over to the IT adoption in public
sector banks and to which extent?
Research design:

A research design is the arrangement of the condition for collection
and analysis of data. Actually it is the blueprint of the research
project. The research type is descriptive research. The main objective
of this design is search primary and secondary data. The research
primarily focuses on the secondary sources and first hand information
through focus group interviews.

30

CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

5%
11%

29% 55%

Interpretation: As per the above graph, Out of 100 respondents 55%
respondents falls under the age category of below 30, 29% comes
under the category of 30-40, 11% comes under the category of 40-50,
5% comes under the category of above 50.

OCCUPATION
Professional Business Salaried Retired

3%

36% 41%

20%

Interpretation: As per the above graph, Out of the 100 respondents
41% comes under the category of professional, 20% respondents falls
31

under the occupation category of buiseness, 36% comes under the
category of salaried,3%comes under the category of retired

QUALIFICATION
School Graduate Post graduate Professional Degree

4%
18%

38%

40%

Interpretation:- 38%of the respondents are school, 40% are
graduate,18% are post graduate,4% have professional degree.

ANNUAL INCOME
Below 1,00,000 1,00,000 to 5,00,000
5,00,000 to 10,00,000 Above 10,00,000

8%
31%
21%

40%

Interpretation: As per the above graph,31% respondents fall under
the category of Income upto below 1,00,000 Indian Rupees, 40%
32

respondents under the category of income between 1,00,000-5,00,000,
21% respondents under the category of income between 5,00,000-
10,00,000 and rest 8% respondents falls under the category above
10,00,000.

PRODUCT/SERVICE
Fixed deposit Current a/c Saving A/C other

1% 4%

29%

66%

Interpretation:- 4%of the respondents have fixed deposit, 29% have
current account,66% have saving account,1% have opted other
services of banks.

33

BRANCH BANKING.

BEHAVIOR OF THE STAFF
highly satisfied very satisfied satiesfied
Disatiesfied very dissatisfied
5% 3%

30%
28%

34%

This question is formed to know that people are how much satisfied
with behavior of the staff in bank.

The above figure shows that 34% & 30% respondents are very
satisfied & highly satisfied, ,28% are satisfied, 5% dissatisfied, 3%
very dissatisfied. Here we come to know that the majority of
respondent i.e. 47% are very satisfied with behavior of the staff.

TIME TAKEN TO PROCESS
THE TRANSACTION
10% 3% 20%

25%
42%

34

Interpretation:- This question is formed to know that people are how
much satisfied with time taken to process the transaction in bank.

satisfied & satisfied, ,20% are highly satisfied, 10% dissatisfied, 3%
respondent i.e. 42% are very satisfied with time taken to process the
transaction in bank.

WORKING HOURS
6% 0%
18%
37%
39%

much satisfied with working hours of bank.

satisfied & satisfied, ,18% are highly satisfied, 6% dissatisfied, 0%
respondent i.e. 39% are very satisfied with working hours of bank.

.

35

ATM BANKING

ATM NETWORK DISTRIBUTION
5% 4%
22% 31%

38%

much satisfied with ATM network distribution

respondent i.e. 38% are very satisfied with ATM network distribution.

CONTINUOUS SERVICE
2%
7%
33%
26%

32%

much satisfied with continuous service

36

The above figure shows that 33% & 32% respondents are highly
satisfied & very satisfied, ,26% are satisfied, 7% dissatisfied, 2%
respondent i.e. 33% are highly satisfied with continuous service.

VARIETY OF TRANSACTION
6% 2%

23%

42%
27%

much satisfied with variety of transaction.

The above figure shows that 42% & 27% respondents are satisfied &
very satisfied, ,23% are highly satisfied, 6% dissatisfied, 2% very
dissatisfied. Here we come to know that the majority of respondent
i.e. 42% are satisfied with variety of transaction.

.

37

EASE OF SCREEN USE

11% 5% 14%

28%
42%

much satisfied with ease of screen use.

i.e. 42% are satisfied with ease of screen use.

GENERAL ASSESSMENT ABOUT
THE SERVICE
highly satisfied very satisfied satiesfied 7%
4%
11%
27%

51%

much satisfied with general assessment about thr service.

38

very satisfied, ,11% are dissatisfied, 7% highly satisfied, 5% very
i.e. 51% are satisfied with general assessment about thr service.

INTERNET BANKING

PAGE SETUP/MENU FLOW
highly satisfied very satisfied satiesfied Disatiesfied very dissatisfied
10% 1%
12%

34%
43%

much satisfied with page setup/menu flow.

satisfied & satisfied, ,12% are highly satisfied, 10% dissatisfied,
1% very dissatisfied. Here we come to know that the majority of
respondent i.e. 43% are satisfied with page setup/menu flow..

39

EASE OF USE /NAVIGATION
very
Disatiesfied dissatisfied highly satisfied
11% 2%
14%

very satisfied
25%
satiesfied
48%

much satisfied with ease of use/ navigation.

i.e. 51% are satisfied with ease of use/ navigation.

.

SPEED OF PAGE LOADING
5% 9%
11%

24%

51%

much satisfied with speed of page loading.

40

i.e. 51% are satisfied with speed of page loading.

.

VARIETY OF TRANSACTION

13% 2% 9%

34%
42%

much satisfied with variety of transaction.

i.e. 42% are satisfied with variety of transaction.

41

GENERAL ASSESSMENT ABOUT
THE SERVICE
7%
5% highly satisfied very satisfied satiesfied
13%
29%

46%

much satisfied with general assessment about the service.

i.e. 46% are satisfied with general assessment about the service..

MOBILE/TELE BANKING

CALL ANSWERING TIME
8% 3% 16%

26%

47%

42

much satisfied with call answering time in bank.

respondent i.e. 47% are very satisfied with call answering time.

FLAWLESS/CORRECT
OPERATION
13% 0% 10%

37%
40%

much satisfied with flawless/correct operation.

highly satisfied, ,13% are dissatisfied, 10% highly satisfied, 0% very
i.e. 40% are very satisfied with flawless/correct operation.

43

UNDERSTANDING AND
REPLYING QUERIES
CORRECTLY
13% 3% 11%
29%

44%

much satisfied with understanding and replying queries correctly.

i.e. 44% are very satisfied with understanding and replying queries
correctly.

COMMUNICATION
SKILLS/POSITIVEAPPROACH

12% 3% 8%

30% 47%

.

much satisfied with communication skills/positive approach.

44

satisfied & satisfied, ,12% are dissatisfied, 8% highly satisfied, 3%
respondent i.e. 47% are very satisfied with communication
skills/positive approach.

GENERAL ASSESSMENT
ABOUT THE SERVICE

9% 5%
10%
23%

53%

much satisfied with general assessment about the service.

i.e. 53% are very satisfied with general assessment about the service.

45

CHAPTER-5
LIMITATIONS & SCOPE
LIMITATIONS

This study is geographically restricted to Dewas city only.
The sample size is small due to the specified reasons.
Finding is based on sample survey through questionnaires
method.
Hence there is a scope for the respondents to be biased or,
pretentious.
Respondents may give biased answers for the required data.
Some of the respondents did not like to respond.

In our study we have included 100 customers of each bank
because of time limit.

SCOPE OF THE STUDY

The study would try to throw some insights into the existing services
provided by the banks and the gap between the customer expectations,
perceptions and the actual state of performance. The results of the
study would be able to recognize the lacunae in the system and thus
provide key areas where improvement is required for better
performance and success ratio.

46

CHAPTER-6
FINDINGS & CONCLUSION

FINDINGS

4%of the respondents have fixed deposit, 29% have current
account,66% have saving account,1% have opted other services
of banks.
The above analysis shows that 34% & 30% respondents are very
satisfied & highly satisfied, ,28% are satisfied, 5% dissatisfied,
respondent i.e. 47% are very satisfied with behavior of the staff.
The analysis shows that 42% & 25% respondents are very
satisfied & satisfied, ,20% are highly satisfied, 10%
dissatisfied, 3% very dissatisfied. Here we come to know that
the majority of respondent i.e. 42% are very satisfied with time
taken to process the transaction in bank.
The analysis shows that 39% & 37% respondents are very
the majority of respondent i.e. 39% are very satisfied with
working hours of bank.
satisfied & highly satisfied, ,22% are satisfied, 5%

47

the majority of respondent i.e. 38% are very satisfied with ATM
network distribution.
The above analysis shows that 33% & 32% respondents are
highly satisfied & very satisfied, ,26% are satisfied, 7%
the majority of respondent i.e. 33% are highly satisfied with
continuous service.
The analysis shows that 42% & 27% respondents are satisfied &
very satisfied, ,23% are highly satisfied, 6% dissatisfied, 2%
respondent i.e. 42% are satisfied with variety of transaction.
The analysis shows that 42% & 28% respondents are satisfied
& very satisfied, ,14% are highly satisfied, 11% dissatisfied,
respondent i.e. 42% are satisfied with ease of screen use.
& very satisfied, ,11% are dissatisfied, 7% highly satisfied,
respondent i.e. 51% are satisfied with general assessment about
thr service.
the majority of respondent i.e. 43% are satisfied with page
setup/menu flow..

48

The above figure shows that 48% & 25% respondents are
satisfied & very satisfied, ,14% are highly satisfied, 11%
the majority of respondent i.e. 51% are satisfied with ease of
use/ navigation.
& very satisfied, ,11% are dissatisfied, 9% highly satisfied, 5%
respondent i.e. 51% are satisfied with speed of page loading.
& very satisfied, ,13% are dissatisfied, 9% highly satisfied, 2%
respondent i.e. 42% are satisfied with variety of transaction.
satisfied & highly satisfied, ,26% are satisfied, 8% dissatisfied,
respondent i.e. 47% are very satisfied with call answering time.
& highly satisfied, ,13% are dissatisfied, 10% highly satisfied,
respondent i.e. 40% are very satisfied with flawless/correct
operation.
The above figure shows that 44% & 29% respondents are
satisfied & very satisfied, ,13% are dissatisfied, 11% highly
satisfied, 3% very dissatisfied. Here we come to know that the

49

majority of respondent i.e. 44% are very satisfied with
understanding and replying queries correctly.

REASON OF DISSATISFACTION IN PUBLIC SECTOR
BANKS
Behavior 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.

CONCLUSION

Thus, 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. That
why Banks should continually assess and reassess how customers
perceive bank services so as to know whether the bank meets or
50

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.

51

CHAPTER-7

RECOMMENDATIONS

The staff should be adequately trained to deal with the customer
on one to one basis.
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 adequately trained to encourage face to face
dealing.
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.
Honors your promises.

52

BIBLIOGRAPHY AND WEBLIOGRAPHY

References:
Ahmad Jamal, 2002. "Customer Satisfaction and Retail Banking: An
Assessment of Some of the Key Antecedents of Customer Satisfaction
in Retail Banking", International Journal of Bank Marketing, Vol 4
No 5, p 146 Anderson, EW. (1996) “Customer satisfaction ad frioe
Tolerance”, Marketing letters, 7(3), 19-30.
Anderson FW., Formell C., Lehmann DR. (1994) “Customer
satisfaction, market share, and profitability: Findings from Sweden”,
Journal of Marketing,58, 53-66.
Athanassopolous, Peggy Johne, C Axel, 2004. "Effective
Communication with Lead Customers in Developing New Banking
Products", International Journal of Bank Marketing, Vol 22 No 2.
Bajpai N. and Srivastava D. (2004) “sectorial comparison of factors
influencing job staisfaction in Indian banking sector”, abstract
retrieved on July 10, 2008 from http://www.highbeam.com/doc/1G1-
119370569.html Banknet group. (2007) “Customer satisfaction lower
in metros”, retrieved on July 10,2008 from
http://blog.banknetindia.com/2007/11/customersatisfaction-lower-in-
metros.html
Belding, S. (2004) “the importance of reducing and resolving
customer conflict”,retrieved on July 10, 2008 from
http://www.beldingskills.com/Images/resolution-importance.pdf

53

Cacippo, K. (2000) “Measuring and Managing customer satisfaction”,
Retrieved on July 10, 2008 from
http://www.qualitydigest.com/sept00/html/satisfaction.html
Colgate, M. (1997) “Personal bankers and relationships marketing: A
new Zealnd Case study” Journal of Financial services marketing,
2910, 84-96.
Cronbach LJ, 1951. "Coefficient Alpha and the Internal Structure of
Tests", Psychometrica.
David, M. (2006). “Customer satisfaction and loyalty for the global
enterprise”, Customersat Inc., retrieved on July 10, 2008 from
http://www.translate.com/technology/multilingual_standard/customer
sat_global_customer_satisfaction.htm Epstein M. and Jones JH.
(2000) “customer profitability Analysis”, the society of management
accountants of Canada strategic management accounting practices
series, retrieved on July 10, 2008 from
http://fmcenter.aicpa.org/Resources/The+New+Finance/Customer+an
d+Supplier+Value+Chain/Executive+Summary+%E2%80%94+Custo
mer+Profitability+Analysis.htm Faulhaber, G. (1995) “banking
markets: productivity, Risk, and customer satisfaction”, abstract
retrieved on July 10, 2008 form
http://knowledge.wharton.upenn.edu/paper.cfm?paperID=377&CFID
=2402520&CFTOKEN=24429976 Fornell C., Mithas S., Morgeson
FV III., Krishnan MS. (2006) “Customer satisfaction and stock prices:
high returns, low risk”, Journal of marketing,70, 3-14

54

Free Management library. (2008). Customer satisfaction. Retrieved on
July10,2008 from
http://www.managementhelp.org/customer/satisfy.htm Grossman,
RP> (1998) “Developing and managing effective consumer
relationships”, Journal of product Brand management, 7(1), 27-40.
Heskett, James L., W. Earl Sasser, Jr. and Leonard A. Schlesinger
(1997). The Service Profit Chain: How Leading Companies Link
Profit and Growth to Loyalty, Satisfaction, and Value. The Free Press,
New York.
Hillabrant W. (2003) “Measuring customer satisfaction: a resource
guide for vocational rehabilitation programs serving American
Indians and Alaska natives”, retrieved on July 10, 2008 from
http://www.nau.edu/ihd/airrtc/pdfs/TrngManualR50.pdf Israel, J.
(2000) “Enhance your quality system with customer satisfaction
measurement”, satisfaction strategies, 1-13, retrieved on July 10,
2008 from http://www.satisfactionstrategies.com/paper5.pdf Jacobs
FA., Latham CK., Lee C. (2002) “The Relationship of Customer
Satisfaction to Strategic Decisions”, Journal of Managerial Issues,
10(2), 165 Jham V. and Khan KM. (2008). “Determinants of
performance in retail banking: perspectives of customer satisfaction
ad relationship marketing”, retrieved on July 11, 2008 from
http://www.thefreelibrary.com/Determinants+of+performance+in+ret
ail+banking:+perspectives+of...-a0180402934 Johnson MD.,
Gustafsson A. (2000). “Improving Customer Satisfaction, Loyalty,
and Profit: An Integrated Measurement and Management System, San

55

Francisco: Jossey-Bass, 2. Jones, Thomas O. and W. Earl Sasser, Jr.
(1995). “Why satisfied customers defect.” Harvard Business Review,
November December, pp. 88–99. Murphy, M. (2001)
“Methodological pitfalls in linking customer satisfaction with
profitability”, retrieved on July 10, 2008 from
http://www.quirks.com/articles/a2001/20011006.aspx?searchID=1456
5960&sort=9 Lee C., Rey T., Mentele J., Garver M. (2004)
“Structured neural network techniques for modeling loyalty and
profitability”, retrieved on July 10, 2008 from
http://www2.sas.com/proceedings/sugi30/082-30.pdf Lenz, V. (1999)
“Saturn Difference: Creating Customer Loyalty in Your Company”,
New York: Wiley, 9.Liswood, L.A. 1992. "Once You've Got 'Em,
Never Let 'Em Go." Sales and Marketing Management (November):
73-77. Lowenstein MW. (1997) “The Customer Loyalty Pyramid”,
Westport CT: Quorum Books, xiii. Luo, Xueming and C.B.
Bhattacharya. (2006) "Corporate Social Responsibility,
Customer Satisfaction, and Market Value." Journal of
Marketing, Vol. 70,1-18 Raja, M. (2007) “Indian banks face foreign
attackers”, South Asia, retrieved on July 10, 2008 from
http://www.atimes.com/atimes/South_Asia/IL18Df02.html Reichheld,
F.F. and W.E. Sasser, Jr. 1990. "Zero-Defections: Quality Comes to
Services." Harvard Business Review (September-October): 105-111.
Reitsperger, W.D. 1986. "Japanese Management: Coping with British
Industrial Relations." Journal of Management Studies 23: 72-87.
Schay BW., Gowing MK., Caldwell JA., Payne SS. (2000) “A Model

56

Customer Satisfaction Survey and Opportunity”, The Public
Manager, 29(1), 30.
Taylor reach group Inc. (2004) “Customer satisfaction versus
customer service”,
Customer reach, 1(4).Retrieved on July 10, 2008 from
http://www.thetaylorreachgroup.com/data/newsletters/200407_Newsl
etter.Pdf Vavra, TG. (1995) “Selling after the sale”, Banking
marketing, 27, 27-30. Winters, P. (2008) “Boost customer
profitability with predictive analysis”, retrieved on July 10, 2008 from
http://www.sas.com/news/feature/fsi/dec04ci.html

57

ANNEXURE
QUESTIONNAIRE

Dear Respondents,

I am doing a study on “customer satisfaction in public
sector banks”. In this connection I request you to read the following
items carefully and answer them. The answers your give will be held
confidential and used purely for academic purpose. Please put a tick
mark corresponding on your choice. I thank you for your time.

1 NAME (Optional)-: ………………………..

2 BANK NAME-: …………………………….

Please fill personal information-:

Age Below 30 30-40 40-50 Above 50
Gender Male Female
Occupation Professional Business Salaried Retired
Marital status Married Unmarried
Qualification School Graduate Post Professional
graduate Degree
Annual Below 1,oo,ooo to 5,00,000 to Above 10,00,000
income 1,00,000 5,00,000 10,00,000

58

Which Fixed Current Saving Other
services you deposit account account
are taking
from the
bank

Branch Banking
How would you describe your views about branch banking? Please
tick in the appropriate column.
(1:highly satisfied/2:very satisfied/3:satisfied/4:dissatisfied/5:very
dissatisfied)

1 2 3 4 5
Behavior of the staff
Time taken to process the
transaction
Working hours

ATM Banking
How would you describe your views about ATM Banking
services? Please tick in the appropriate column.

59

dissatisfied)

1 2 3 4 5
ATM network distribution
Continuous service
Variety of transactions
Ease of screen use
General assessment about the
services

Internet Banking
How would you describe your views about internet banking
services? Please tick in the appropriate column.
dissatisfied)

1 2 3 4 5
Page setup/menu flow
Ease of use/navigation
Speed of page loading
Variety of transactions
General assessment about the
services

60

Mobile/Tele Banking
How would you describe your views about customer service
representatives? Please tick in the appropriate column.
dissatisfied)

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

CHETAN GEHLOT

61

“Customer satisfaction in public sector banks”

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to “Customer satisfaction in public sector banks”

Similar to “Customer satisfaction in public sector banks” (20)

Recently uploaded

Recently uploaded (20)

“Customer satisfaction in public sector banks”