Customer Satisfaction in Indian Banking: A Case of Yamuna Nagar District in Haryana
Kumar, Raj, Political Economy Journal of India
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 (1). Banking is a customer oriented services industry, therefore, the customer is the focus and customer service is the differentiating factors (2).
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 (3). 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 (4) 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 (5). 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.
In this paper, the main contention of the author is to highlight the customer satisfaction through service quality provided by the banks-SBI from the public sector banking and ICICI from the private sector banking. Another contention is to demonstrate the performance of the two banks SBI & ICICI in terms of customer satisfaction.
The paper is organized in to six sections: Section- 1: starts with a brief profile of the banking industry, especially the SBI and ICICI. Section- 2: covers Research Methodology comprising objectives, Hypothesis, research design and scope of the study including nature of data collection. Section-3: lays out the measurement of customer satisfaction with service quality and review of literature. Section-4: puts forward the core strategies to address service quality gaps. Section-5: deals with Analysis and Interpretation in line with the objective of the study. Section-6: briefly summarizes the conclusion and policy implementation of the study.
Profile of the Banking Industry-SBI and ICICI
State Bank of India
State Bank of India (SBI) is the largest bank in India. It is measured by the number of branch offices and employees as the largest bank in the world. Established in 1806 as Bank of Bengal, it remains the oldest commercial bank in the Indian Subcontinent and also the most successful one providing various domestic, international and NRI products and services, through its network of 13,908 branches, including 4,731 associate banks' branches in India and overseas. It also provides financial services, such as life insurance, merchant banking, mutual funds, credit card, factoring, security trading and primary dealership in the money market. With an asset base of $126 billion and its reach, it is a regional banking behemoth. The bank was nationalised in 1955 with the Reserve Bank of India having a 60 percent stake. It has laid emphasis on reducing the huge manpower through Golden handshake schemes and computerizing its operations.
It also has non-banking subsidiaries and joint ventures, such as SBI Capital Markets Ltd. …