Dissertation Report On


Priyanka Mishra MBA Class of 2011

Under the Supervision of

Professor Department of Operations In Partial Fulfillment of Award of Master of Business Administration


This study has been taken in consideration of this fact. Firstly, it attempts to assess the perceived level of bank service quality. Then, it tries to investigate and compare the various dimensions of quality banking services in private and public sector banks. Lastly, inferences have been drawn and reasons have been listed for any gap in the service quality provided by these banks.



I, Priyanka Mishra student of Masters of Business Administration from Amity Business School, Amity University Uttar Pradesh hereby declare that I have completed Dissertation on “Study and an assessment of service quality in retail banks in private and public banking sector in India. ” as part of the course requirement . I further declare that the information presented in this project is true and original to the best of my knowledge.

Name: Priyanka Mishra Place: Noida Enroll. No: A0101907432

`Program: MBA(G)


S. Under my guidance.Pal hereby certify that Priyanka Mishra student of Masters of Business Administration at Amity Business School.S.AMITY UNIVERSITY UTTAR PRADESH AMITY BUSINESS SCHOOL CERTIFICATE I Mr. Ms. Amity University Uttar Pradesh has completed dissertation on “Study and an assessment of service quality in retail banks in private and public banking sector in India.S.Pal Professor Department Of Operations 4 . S.

under the guidance of Prof.ACKNOWLEDGEMENT The Project “Study and an assessment of service quality in retail banks in private and public banking sector in India.S. I would like to thank all the respondents without whose cooperation my project would not have been complete. I feel indebted to all those persons and organizations who have provided help directly or indirectly in successful completion of this study.has been conducted by In Partial Fulfillment of Award of Master of Business Administration. Last but not the least. based on the primary research. Name & Sign: Priyanka Mishra Enroll. . Amity Business School.Pal. S. No: A0101907432 Program: MBA(G) 5 . I have completed this project. Noida I would also like to thank the management at the concerned Banks who gave me permission to carry out research.

NO 1 2 3 4 5 6 References Annexure Chapter Name Introduction Literature Review Problem Statement Methodology Results and Dimensions Suggestions and Conclusions Page No.CONTENTS Abstract Declaration Certificate from Faculty guide Acknowledgement ii iii iv v S. 6-9 10-31 32 33-36 37-58 59-60 61 62-65 6 .


They need to identify their marketing resources. customer is king. Moreover. Customer satisfaction has gained a whole new meaning in the present era. increased customer awareness. convert their resources into efficient services and distribute these effectively so that customers are satisfied. Here. hone up their skills. are up to the expectations of customers. Companies now no longer focus on just product quality but are now going one step forward to ensure that services rendered to their customers.In today’s age of cut throat competition. successful companies are proactive in the way they manage quality and continuously seek to improve levels of customer satisfaction. requirement of increasing bank personnel skills and need for more stringent customer governance have posed serious problems to banks. Rather than simply reacting to their demands. in the present scenario delivering highest levels of service quality is of paramount importance for banks. it is only the quality of service which can be used by the banks to differentiate each other. Thus. innovation. technological advancement. This has posed considerable challenges particularly for those organizations like banks which offer identical services while competing with each other in a smaller area. trend towards universal banking. the implementation of financial sector reforms have ensured that change in the way banking industry treats its customer is inevitable. The opening up of the economy has compelled banks to find new ways and means to compete in the new environment and to survive while being profitable also. Competition from foreign banks and new private sector banks. PROFILE OF THE BANKS CONSIDERED IN RESEARCH 8 .

Malaysia and Indonesia. HDFC Bank's mission is to be a World-Class Indian Bank. 30. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments. 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 specialised subsidiaries and affiliates in the areas of investment banking. with its registered office in Mumbai. 3. 1. as part of the RBI's liberalisation of the Indian Banking Industry in 1994. Bangladesh. venture capital and asset management. branches in United States.744. South Africa. India. Bahrain. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.10 billion (US$ 77 billion) at December 31.644 ATMs in India and presence in 18 countries.14 billion for the nine months ended December 31. Our UK subsidiary has established branches in Belgium and Germany.416 branches and about 4. life and non-life insurance. Russia and Canada. 2008 and profit after tax Rs. These are1. 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). The Bank currently has subsidiaries in the United Kingdom. Singapore.2 HDFC BANK The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. Thailand.1 ICICI BankICICI Bank is India's second-largest bank with total assets of Rs. China. 2008. Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates. Sri Lanka. and to achieve healthy growth in 9 .Four banks (2 Private and 2 Public) have been considered in the study. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited'. Hong Kong. The Bank has a network of 1.

looking at the vast untapped potential in the hinterland and proposes to cover 100.4 PUNJAB NATIONAL BANK Since its humble beginning in 1895 with the distinction of being the first Indian bank to have been started with Indian capital. maintaining its number ONE position amongst its peers.Operational Excellence. number of branches. The bank is entering into many new businesses with strategic tie ups – Pension Funds. consistent with the bank's risk appetite. General Insurance. Customer Focus. The bank’s Return on Assets at 1. Today. with 43% share of low cost deposits.049 crore. 1. the country’s oldest Bank and a premier in terms of balance sheet size. PNB has achieved significant growth in business which at the end of March 2008 amounted to Rs 2. PNB is ranked as the 3rd largest bank in the country (after SBI and ICICI Bank) and has the 2nd largest network of branches (4589 including 322 extension counters). Advisory Services. Product Leadership and People 1.15% was also the highest. During the FY 2007-08. The bank is committed to maintain the highest level of ethical standards. Point of Sale Merchant Acquisition.000 crore. structured products etc – each one of these initiatives having a huge potential for growth.its’ ratio of priority sector credit to net bank 10 . During the FY 2007-08. the bank achieved a net profit of Rs 2. market capitalization and profits is today going through a momentous phase of Change and Transformation – the two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a run for their money.000 villages in the next two years. Mobile Banking.99.profitability. The Bank is forging ahead with cutting edge technology and innovative new banking models. HDFC Bank's business philosophy is based on four core values . to expand its Rural Banking base.3 STATE BANK OF INDIA The State Bank of India. with assets of more than Rs 1. professional integrity. corporate governance and regulatory compliance.85959 crore. Private Equity. Custodial Services.

which are expected to emerge as challengers to the world’s leading blue chip companies. Standard & Poor’s (2006) listed PNB. our strongest defense against foreign competition. SERVICE QUALITY Definitions of Service Quality: 11 .94% was also higher than the respective national goals of 40% & 18%. d) Quality also pays in the form of customer retention.” -Deming “Higher quality has a beneficial effect on both revenues and cost.credit at 44. Further the leading international Credit Rating index provider.” -Johnson & Weinstein “Quality is consistent conformance to customer’s expectations.” -Gummesson WHY QUALITY MATTERS? a) Global competition and deregulation in a number of industries is forcing companies to turn to quality in order to survive.11% & agriculture credit to net bank credit at 18. SERVICE QUALITY "The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs." -Kotler “Quality must provide goods and services that completely satisfy the needs of both internal and external customers. c) Research shows a relationship between quality. b) Quality is our best assurance of customer allegiance.” –Stack et al “Quality is a predictable degree of uniformity at a low cost with a quality suited to the market. market share. Amongst Top 1000 Banks in the World. amongst the 300 World companies & 7 Indian companies. and the only path to sustained growth and earnings (Welch). Quality serves as the "bridge" between the producer of goods or services and its customer. ‘The Banker’ listed PNB at 255th place. and return on investmentHigher quality yields a higher return-on-investment (ROI) for any given market share.

service quality is abstract. competence. etc. high service quality results in customer satisfaction and loyalty. service quality could be split into technical quality ( what is done) and functional quality ( how it is done). Service quality attributes such as responsiveness and access would be important in helping the customer judge the functional quality of the service encounter. On the other hand. reduction in customer complaints. performance.services rendered cannot be seen in physical form so.Gronroos (1984) defined service quality as a perceived judgment. b) Functional Quality has more to do with how the technical quality is transferred to the consumer. According to him. a) Technical Quality is concerned with the outcome of the delivered product or service. Customers use service quality attributes such as reliability. to evaluate technical quality. and improved customer retention rates. Parasuraman et al (1988) defined service quality as “the degree of discrepancy between customers’ normative expectations for the service and their perceptions of the service performance. delivery of high service quality to customers offers firms an opportunity to differentiate themselves in competitive markets. Difficulty in measuring service quality: Unlike goods quality which can be measured with some objectivity. This is because of the following features of services— • Intangibility. while measuring service quality it becomes difficult to decide as to what to measure. 12 . greater willingness to recommend to someone else.” Perceived service quality is then interpreted from the difference in degree and direction between perceptions and expectations. resulting from an evaluation process where customers compare their expectations with the service they perceived to have received. Importance of service quality: On the one hand. durability.

• Affected by the organizational objectives/ culture. there cannot be any set standard that can be applied to measure a particular service’s quality. One is the Nordic school of thought based on Gro¨ nroos’s (1984) two-dimensional model.e their production or delivery requires human involvement.Services are required to be rendered i.certain organizations place more emphasis on delivering quality services while the focus of others might be product quality. Thus. deciding when to measure the service quality becomes difficult.like public sector banks. RELEVANT MODELS A canvassing of the growing body of literature on service quality suggests that two schools of thought dominate the extant thinking.• Inseparability of production and consumption. 13 . • Heterogeneity. the same services can be rendered differently since the services provider is different. and hence design appropriate strategies to take corrective actions. Likewise. • Perception of customer. firms must rely on consumers’ perceptions of service quality to identify their strengths and/or weaknesses. Hence. So.Different customers have different perceptions about the same service or service provider. in the absence of objective measures. certain institutions by the virtue of their culture donnot emphasis on service quality. a benchmark quality level cannot be set for a particular service. And the other is the North American school of thought based on Parasuraman et al.Since the services are intangible in nature a clear cut demarcation between their time of production and time of consumption cannot be made.’s (1988) five dimensional SERVQUAL model. This makes development of psychometrically sound and managerially useful instruments to measure service quality imperative. Now. Thus.

Research model --SERVQUAL Perceived service quality as a customer-based performance measure: An empirical examination of organizational barriers using an extended service quality model was done by A. and Parasuraman (Journal of Marketing. 1994). and empathy aspects of the services delivered by a firm (Parasuraman et al. 1984).Considering other significant conceptual and empirical works in the area. 14 .. physical environment quality. 1988). and managers from each company. five specific propositions implied by the model and by earlier studies contributing to its development were tested. contact employees. reliability. The results have practical implications and suggest an agenda for future organizational research. Interaction quality. Valarie A. Berry. 52. • Technical and functional quality (Gronroos. This study empirically examines organizational barriers to delivering high-quality service performance as measured by customer perceptions and expectations. assurance. Berry. Leonard L. responsiveness. it appears that service quality encompasses• Customers’ experiences with the tangibles. 35-48) as a conceptual framework. Zeithaml . • • Service product. 2001). Using the extended service-quality model developed by Zeithaml. service environment. and service delivery (Rust and Oliver. and outcome quality (Brady and Cronin.Perceived service quality as customer-based performances measure is also known as SERVQUAL Model. Such testing required a complex research design involving five service companies as well as samples of customers. Parasuraman.

2) Perceive Quality = Expected Quality Result = Satisfied Customer. 3) Perceive Quality < Expected Quality Result = Dissatisfied Customer 15 .SERVQUAL originally measured 10 aspects of service quality: • • • • • • • • • • Reliability Responsiveness Competence Access Courtesy Communication Credibility Security Understanding or knowing the customer Tangibles By the early nineties the authors had refined the model to the useful acronym RATER: • • • • • Reliability Assurance Tangibles Empathy Responsiveness The SERVQUAL model measures the gap between customer expectations and experience.While comparing the expected and the perceived service quality the following may be the outcomes. 1) Perceive Quality > Expected Quality Result = Delighted Customer.

trustworthiness.freedom from danger. believability and honesty of staff 4. Competence .the ability to perform the service accurately and dependably. Security .  RESPONSIVENESS .making the effort to get to know customers and their specific needs The SERVQUAL model makes a comparison of the perceived quality and the expected quality of services by the customers on the above mentioned dimensions.e whether there is gap with regard to tangibles or responsiveness of company personnel or empathy aspect.a combination of the following- 1. This comparison throws light on any gap that may be existing in the service quality and also provides sufficient information about the area of the gap i. Understanding the customer .  EMPATHY . The Conceptual Model of Service Quality presents an overview of where these gaps may be existing and why these gaps exist. Credibility .keeping customers informed in a language they understand and really listening to them 3.politeness. personnel and information material.approachability and ease of contact 2. 16 .Service Dimension of SERVQUAL Model The Five Key Service Dimensions according to SERVQUAL Model are TANGIBLES . risk or doubt.  RELIABILITY .the appearance of physical facilities. consideration and friendliness of contact staff 3.a combination of the following- 1.having the requisite skills and knowledge 2. Access (physical and social) . respect. equipment. Courtesy .  ASSURANCE . Communication .the willingness to help customers and provide a prompt service.

not knowing what customers expect – – – lack of a marketing orientation inadequate upward communication (from contact staff to management) too many levels of management  GAP 2 . word-of-mouth and needs/wants of customers. Reasons for the GAPS GAP 1 .Conceptual Model of Service Quality  Gap 1: The difference between management perceptions of what customers expect and what customers really do expect  Gap 2: The difference between management perceptions and service quality specifications the standards gap.the wrong service quality standards – – – – inadequate commitment to service quality lack of perception of feasibility .‘it cannot be done’ inadequate task standardisation the absence of goal setting 17 .  Gap 3: The difference between service quality specifications and actual service delivery are standards consistently met?  Gap 4: The difference between service delivery and what is communicated externally . ----expectations are made up of past experience.are promises made consistently fulfilled?  Gap 5: The difference between what customers expect of a service and what they actually receive. ----measurement is on the basis of two sets of statements in groups according to the five key service dimensions.

Where do we want to be? 18 .when promises made do not match actual delivery – – inadequate horizontal communication . GAP 3 .It is the result of the other 4 Gaps Such a GAP analysis provides an insight into the 2 main questions for a business organization1.unsure of what your remit is and how it fits with others poor employee or technology fit .the wrong person or system for the job inappropriate supervisory control or lack of perceived control . Where are we? 2.too much or too little control lack of teamwork  GAP 4 .the service performance gap – – – – role ambiguity and role conflict .between departments or services a propensity to overpromise  GAP 5.

subjective and statistically unreliable. 19 .this is particularly useful in the public sector.  Customer priorities and their ranked order of importance can become the WHATS . It is an efficient model in helping an organization shape up its efforts in bridging the gap between perceived and expected service.  The service organization can compare a set of Servqual scores against those of competitors or best practice examples.  These WHATS can then be compared with the HOWS (key business processes) and relationships matched to check service design and provision according to key requirements.eg other departments or services that it deals with. The simplified RATER model however is a simple and useful model for qualitatively exploring and assessing customers' service experiences and has been used widely by service delivery organizations.  The company can track customer expectations and perceptions over time and the discrepancies between them.  The data on customer priorities can be fed into the House of Quality (QFD) and hence a record of existing standards of quality can be maintained. SERVQUAL has its detractors and is considered overly complex.  The organization can assess the expectations and perceptions of internal customers .  It can also compare the expectations and perceptions of different customer groups .Usefulness of servqual data Service quality from the customer’s perspective can be assessed.

1994). While many studies in banking measure service quality by replicating or adopting Parasuraman et al... 1999. 1994. 1994. McAlexander et al. 1992.Nyeck. 20 .’s (1988) SERVQUAL model (see. McDougall and Levesque. 1999). Athanassopoulos 1997. Nyeck. 2001). Newman and Cowling. The fact that SERVQUAL has critics does not render the measuring tool moot. a better approach is to develop an instrument specifically for the focal service. Rather. This is particularly important from a managerial perspective (Shemwell and Yavas. 1990. 1998. a few studies address this weakness and present new models or approaches to the measurement of service quality in general and in banking in particular. and Pons (2002) stated the SERVQUAL measuring tool “remains the most complete attempt to conceptualize and measure service quality” (p. for example. Morales. as Shemwell and Yavas (1999) cogently argue. the criticism received concerning SERVQUAL measuring tool may have more to do with how researchers use the tool. Criticism and limitations of SERVQUAL ModelThe review of this body of literature points out two major limitationsFirst. 2002). banking. Morales. Babakus and Mangold. Donthu and Yoo. 1999. and Pons (2002) reviewed 40 articles that made use of the SERVQUAL measuring tool and discovered “that few researchers concern themselves with the validation of the measuring tool”. as noted by Babakus and Boller (1992). Thus. there is a need to develop industry-specific measures of service quality. Because many of the questions in existing instruments (notably SERVQUAL batteries) intended to be applied across situations/services just do not apply in a specific context and force researchers to drastically alter the items (Babakus and Boller. Ladhari. Angur et al. the more specific the scale items are in a service quality instrument and the more applicable they are to a manager’s own contextual circumstance. 101). financial services. Ladhari. and education (Nyeck. 1996. Carman. the better s/he will be able to use the information. & Pons.Marshall and Smith. However. Ladhari. instead of taking an existing instrument and trying to fit it to the context. Morales. Yavas and Benkenstein. 1992. Blanchard and Galloway. 1998. Lloyd-Walker and Cheung. The main benefit to the SERVQUAL measuring tool is the ability of researchers to examine numerous service industries such as healthcare.

More recently. and service quality constructs/measures in particular (Mattila. 21 . reliability. one of which was retail banking. service portfolio. communication. Mersha and Adlaka (1992) applied the Delphi technique to a sample of MBA students to generate attributes of poor and good service quality. They then converted the 12 attributes thus identified into scales and analyzed students’ perceptions of service quality in five services. responsiveness. and access to teller services as the final dimensions of service quality. particularly on variations along power distance and communication context. The scale developed by Bahia and Nantel (2000) based on expert opinions revealed six dimensions of service quality. Their study resulted in SYSTRASQ. Mattila (1999b) argues that the definition of service quality depends on consumers’ cultural heritage.. there is a need to develop service quality measures that are country/culture specific. access. Second. Yavas. price. and machine service quality. and empathy). This is shown to be true in a research by Winsted (1997) who compared Japanese and US consumers. This is because. In another study.e. behavioral service quality. assurance. These were termed: effectiveness and assurance.. 1997. 2002). credibility.For instance. Drawing attention to this limitation of extant research. service transactional accuracy. and reliability. individualism/collectivism. developed a scale to measure service quality perceptions of bank customers. 1997). quality constructs/measures in general (Yavas and Konyar. tangibles. Hofstede. power distance) between countries are likely to have varying effects on the definition of service quality. The authors concluded that the list of attributes they generated was similar to the five dimensions of SERVQUAL (i. tangibles. 1999a) that are developed in one culture (notably a western culture) may not be applicable in a different cultural setting. as is the case with other marketing and management constructs and measures (Benkhoff. based on the technical and functional service quality schema proposed by Gro¨ nroos (1984). Using SERVQUAL as a starting point and then adding items that he extracted from a qualitative study commissioned to establish quality service standards. Malhotra et al. which consists of service system quality.g. Avkiran (1994) developed a multi-dimensional instrument for measuring customerperceived quality in retail branchbanking. Avkiran (1994) followed an iterative process and identified staff conduct. (1994) share this view and posit that the cultural differences (e. 1990. Aldlaigan and Buttle (2002).

1997). the weight of evidence suggests that culture plays a significant role on the definition of the service qualityconstruct (Kettinger et al. culturally bounded measure of service quality’’ . 22 . 1995). which refers to genuineness of service providers’ behaviors. Imrie et al. Despite some cross-cultural commonalities (Espinoza. (2002) recently stated that managers should avoid employing the SERVQUAL scale globally and insteadthey should develop ‘‘a new. For instance. Indeed. but also demonstrated that the number and meanings of service quality dimensions varied between US and Japanese consumers. Winsted (1997) not only identified new quality dimensions that had not been a part of service quality concept until then.. In recognition of this.Focusing on provider behaviors as indicators of service encounter quality. was an important component of service quality for Japanese consumers while this dimension did not surface in the case of the US consumers.calls are made to develop culture-specific measures of service quality (Winsted. the ‘‘authenticity’’ dimension. 1999).

and insurance policies are all examples of the way in which the financial services are presented to customers. Inseparability The degree of inseparability depends upon the type of service and the actual supplier. Heterogeneity/variability The complexity of the service transaction process will determine the extent of variability and this can differ to a large extent between institutions and even with one institution. They can enhance the image of the service and the provider can even bestow status or implied benefits upon the user as with a gold card. the greater the degree of standardization. 23 . net banking etc. Physical reminders of the service product. ‘gold’ credit cards. but the service providers go to considerable lengths to ‘tangibilise’ the service for customers. Regular bank statements. Many everyday transactions are carried out now via automated services.SERVICE QUALITY IN BANKING INDUSTRY Features of Banking Services The unique features of services with reference to banking areIntangibility Financial services are generally intangible.the automated teller machines (ATMs). The greater the degree of automation within any transaction process. many financial services are sold by brokers and agents of various kinds. +Additionally. Thus simple transactions may be carried out via ATMs and completely standardized or via branch counter where they might be fairly standardized but subject to some variation in quality. Services are frequently handled by agents are credit card and other currency/travelers cheque encashment. brand name and value serve to reassure the consumer and help the organizations positioning.

This new scale popularly known as Bank Servie Quality is a further modification and extension of the SERVQUAL scale .1980) and items representing the various marketing mix elements like product. which does not have any customers at all on a particular day. A bank branch. specifically in retail banking was developed by Bahia and Nantel (2000). If a cheque needs to be cleared by a certain date and the system causes delay then the benefits to the consumer are lost so the service could be said to be perishable. money and financial services are enduring in nature. may actually gain rather than lose profit as staff may be able to use the peace and quiet to catch up on other work. Scale for measuring banking service qualityA new scale for measuring the service quality. These dimensions are      Effectiveness and assurance Access Price Tangibles Service portfolio Reliability 24 . BSQ in addition to the dimensions proposed by Parasuraman et al (1985) includes other dimensions such as courtesy and access (carman. If a bank’s reserves are not fully utilized profitably through lending or investment they will still retain their worth and may be utilized again at a later date. place. By and large.Perishability The degree of Perishability depends on the type of service. participants etc. \BSQ has six dimensions which include 31 items describing the service quality relevant to banking sector.

Achieving Service Quality Best Practices of Service Quality Management: Various studies have shown that well. The standards must be set appropriately high. 3. Disney. The following are the pre-requisites for achieving service quality. They have developed a distinctive strategy for satisfying these needs. but it would result in FedEx losing 64. A 98 percent accuracy standard may sound good.000 mis-filled prescriptions daily. rather it is a matter to be taken care of by the entire business system. Their senior and top management look not only at financial performance but also at service performance. Pre-Requisites for Achieving Service Quality: As far as service organizations are concerned. Apollo. and unsafe drinking water 8 days a year. Strategic Concept: Top services companies are “customer obsessed”. One can distinguish between companies offering “merely good” service and those offering “breakthrough” service. 1. Citibank aims to answer phone calls within 10 seconds and customer letters within 2 days. 25 .The present study is an attempt to know the perceived level of service quality provided to retail bank customers in private and public sector banks and to study the difference between the quality perceptions of private and public sector retail bank customers using the basic model of SERVQUAL and also the dimensions of BSQ model.managed service companies share the following common practice-. 400. Xerox. aimed at being 100 percent detect-free. quality is not the responsibility of the quality control department only. High Standards: The best service providers set service quality standards. 2. 6 misspelled words on each page of a book. Top Management Commitment: Organizations such as Marriot. They have a clear sense of their target customers and their needs.000 packages a day. Infosys and Wipro have a thorough commitment to service quality. Hospitals.

Preparing the Employees: The organization needs to prepare their employees first so that they are capable of and feel like delivering quality services. The customer should be informed about the action taken and thanked. Organizing Employee Training Programs to cultivate and have their technical and inter-personal relations and communication skills need to be undertaken as and when the need arises. It is very important to note that employee satisfaction precedes customer satisfaction. The vision of the leader guides the organizational effort into achieving high standard of service quality 2. it cannot be taken for granted that high employee satisfaction automatically gets translated into quality. Only Top management has the position and clout to design a Vale System that has at its core the total customer satisfaction 4. Everything right the first time and always is a typical expression of this psyche.1. However. 3. System for Addressing Customer Complaints: The major problem today is that unsatisfied customers hardly complain. the employees needs to be motivated enough to meet and exceed customers expectations. Only satisfied employees can deliver quality services. It must be made clear to every employee that one is expected to give one’s best during each ‘Moment of Truth’. 26 . thereby ruling out possibility of defects and shortfalls. they simply stop buying such goods and services without testing the marketer know even a shred as to what went wrong and where. ‘Chalta Hai’ attitude won’t work and won’t be accepted in any case. Setting High Performance Standards: Champion of high quality always emphasizes 100% quality. There should be a system of complain and suggestions and appropriate action should be taken. Visionary Leader: Presence of a Visionary leader at the top is a necessary element for achieving quality. Management’s Commitment and Support: The process of quality improvement has to be taken as an integrated management process.

Improve constantly. System for Monitoring Service Quality: Commitment to quality also means that services delivered must be continuously monitored to assess as to what extent the customers are satisfied with the service offering of the firm. Move toward a single supplier for any one item. service. customers and suppliers. recognizing their different abilities. Cease dependence on mass inspection to achieve quality. 7. capabilities. 5. minimize total cost in the long run. Adopt and institute leadership for the management of people.6. based on a long-term relationship of loyalty and trust. and aspiration. of any activity. customer satisfaction analysis and specialist marketing Research are the improvements are included where needed. Institute training for skills. 2. Create constancy of purpose for the improvement of product and service. Instead. 6. and provide jobs. with the aim to become competitive. as well as leadership of production workers. Internal performance analysis. End the practice of awarding business on the basis of price tag alone. 27 . and forever. improve the process and build quality into the product in the first place. stay in business. Leadership of management is in need of overhaul. 3. Instead. Adopt a new philosophy of cooperation in which everybody wins (“win-win”) and put it into practice by teaching it to employees. 4. the system of production. planning. This will improve quality and productivity and thus constantly decrease costs. Deming's 14 Points Deming offered fourteen key principles for management for transforming business effectiveness. In summary: 1.

Eliminate numerical goals. 10. Break down barriers between departments. The transformation is everybody’s job. Institute a vigorous program of education and self-improvement. Put everybody in the company to work to accomplish the transformation. design. and targets asking for zero defects or new levels of productivity. Eliminate slogans. and production must work as a team to foresee problems of production and use that might be encountered with the product or service. 28 .8. Drive out fear and build trust so that everyone can work more effectively. 11. numerical quotas and management by objectives. 13. 14. Remove barriers that rob people of joy in their work. exhortations. 9. Substitute leadership. This will mean abolishing the annual rating or merit system that ranks people and creates competition and conflict. sales. People in research. Such exhortations only create adversarial relationships. 12. Abolish competition and build a win-win system of cooperation within the organization.


accurate measurement of every critical variable in business operations. Foundation University Institute of Management and Computer Sciences Excellence of Banking Services . improvement. and breakthroughs with development. services and processes and on work relationships based on mutual trust and teamwork. a quality efficiency model and a profitability efficiency model.last viewed . the service-profit chain is cast as a cascade of efficiency benchmarking models. Empirical results indicate that superior insights can be obtained by analyzing operations. Total Quality Management is viewed as virtually a new organizational culture and a way of thinking.Efficiency. service quality.A Multidimensional Approach dcecember 11. Branches are the points where banks offer their products. continuous improvement. Hummayoun Naeem and M. Total Quality Management is a structured system for satisfying internal and external customers and suppliers by integrating the business environment. and maintenance cycles while changing the whole organizational . a buzzword phrase of the modern age is based on the assumption that quality can be managed that every business entity tries to get into. Some relations between operational efficiency and profitability. 30 .and profitability simultaneously than the information obtained from benchmarking studies of these three dimensions separately. continuous improvement of products. Banking products are almost the same in a country but what matters is the way the product is offered and the quality aspects associated with those products. Three models—based on Data Envelopment Analysis (DEA) —are developed in order to implement the framework in the practical setting of a bank’s branches: an operational efficiency mode. The objective of this fund channelling is to earn profit. So the approach has an intense focus on customer satisfaction. This paper describes that the banks being financial intermediaries are the backbone of any economic system involve in channelling funds from those having surplus to those having its. This paper develops a general framework for combining strategic benchmarking with efficiency benchmarking of the services offered by bank branches. and between operational efficiency and service quality are investigated. Iqbal Saif. In order to reach maximum customers. In particular.2010.2010. banks de a network of branches. Total Quality Management (TQM). This is the comprehensive approach towards quality management covering al areas of business. Zenios(Financial Institutions Center). Profitability and Quality of Banking Services . The use of the models is illustrated using data for the branches of a commercial Bank.last viewed December 12.Andreas Soteriou Stavros A.

banks. and conduct used in antitrust policy. once quality is introduced. Competition in the Thai market increased remarkably after the entrance of the international banks. Chaisomphol Chaoprasert* & Dr. has said that “customers especially want face-to-face contact when opening accounts and getting loans. introducing low-interest strategies and conducting promotional campaigns.2010 The Thai banking system has undergone dramatic changes in competition and higher customer expectations by providing new services. higher quality investments by banks could make potential entry harder. and Competition in Banking.Dr.S. the international banks are increasingly offering ready-made products and using advanced technology. For instance. Some consumers might be happier paying a higher price to a bank in exchange for higher quality service. last viewed 2010. there is no unambiguous implication for consumer welfare from the empirical correlation between prices and the number of banks in a market. one of the largest U. Now. although the five Thai and three government-owned banks are more familiar to customers. The banks believe customers will be loyal if they receive greater value than from competitors and high profits will be earned if they can position themselves better than their competitors within a specific market. For example. the CEO of Bank of America. Their greater management skills mean changes can be introduced promptly to the market. last viewed December 10 . while their competitors face higher branch investment and operating costs. Service Quality. will the merger broaden the ATM network available to consumers? By the same token. market concentration. The introduction of quality in the study of competition alters the interpretation of certain empirical correlations between the number of firms.” when 31 . Thus. Therefore. However. the empirical finding that markets with fewer banks tend to have lower deposit rates and higher loan rates has been historically taken to imply a less competitive conduct by banks and therefore have a negative effect on consumers. our finding that quality is relevant in banking suggests that quality should be incorporated into the analysis of consumer welfare and therefore antitrust analysis be whether the new bank would provide a higher level of quality. The anecdotal evidence indicates that banks open branches in the hope of shifting demand and thus attracting new customers. banks should focus on service quality as a core competitive strategy. will it face competition from other dominant banks that also have large branch networks? To the extent that banks open branches mostly in response to their own market targets. If the post-merger bank becomes dominant in the market and has a large branch network. ASTRID A. branch and ATM networks constitute another example of an endogenous fixed cost. DICK (2003)Market Size. Barry Elsey (2009)Service Quality Improvement in Thai Retail Banking and its Management Implications. These strategies are not long-term compared with improving service quality. with many branches across the nation. as opposed to their existing customers’ needs. For instance.

last viewed December 9. An increasing number of banks are using technology to deliver their regular service to the consumer. In many places in the world. providing exc ellent customer service plays a vital role in a company’s success and failure. Dr. Many retail banks face a huge challenge in reducing the number of branches they currently operate as down-sizing efforts bring with them complex post-merger problems such as social and political issues. Investigations of quality issues of banks’ automated services are necessary because of their potential influence on: attractiveness. technology has had a remarkable influence on the growth of service delivery options and a profound effect on service marketing order to remain competitive. Manoj Kumar Dash Asst.28 Arecent FDIC study on bank branch growth finds that this growth follows population and employment growth. Nicole Hartley and Tony Ward. organisational culture concerns. Professor Galgotia College of Engineering & Technology Greater NoidaMeasuring Customer Satisfaction in The Banking Industry . the provision of self-service options for customers In today’s intensely competitive economy. customer retent ion. the creation of value added services for customers the facilitation of their employees’ jobs and ultimately. product modifications and IT integration Recently. positive wordof-mouth. In this paper talks about the Impact of Technology on Banks’ Philosophy During the last two decades the financial sector has developed rapidly in terms of size industry structure and the variety of consumer and business-to-business products and services The Australian financial sector has been transformed from a relatively closed system in the 1950s and 1960s based on traditional bank activities to a more open. and maximising competitive advantages. thus offering further evidence of the role of branches in shifting a bank’s own demand.2010 Satisfied customers are central to optimal performance and financial returns. Mohammed Al-Hawari. (2005)Measuring Banks’ Automated Service Quality:A Confirmatory Factor Analysis Approach. In a structural deposit demand study.2010.explaining the bank’s ambitious branching strategy and the commitment to branch expansion industrywide. More and more banks have adopted technology to deliver their services and this has resulted in: reduced costs. Dick finds that branches play a major role in a consumer’s choice of bank. business organizations have been elevating the role of the customer to that of a key stakeholder 32 . effective and competitive system which is able to offer a wide range of products and services Technological developments and financial liberalisation (deregulation) are viewed as the main forces influencing the financial sector’s development These changes motivated banks to be aware of future trends in order to survive and compete effectively.last viewed december 11. banks are increasing their technology based service options.

but with buyer power on the rise. companies can determine the actions required to meet the customers' needs. customer privacy and information security are under attack as never before. Evidence is mounting that placing a high priority on CS is critical to improved organizational performance in a global marketplace. Assets on the balance sheet – basically assets of production – are good predictors only when buyers are weak. As buyers become empowered.(page 6). At the global level – The Payment Card Industry (PCI) Act requires a single set of information security standards and requirements for all payment organizations. Focusing on competition has its place. So it is no wonder that the relationship between those assets and future income is becoming more and more tenuous. last viewed 11 december 2010. Forward-looking companies are finding value in directly measuring and tracking customer satisfaction (CS) as an important strategic success indicator. sellers have no choice but to adapt. When buyers are powerful. Customers are viewed as a group whose satisfaction with the enterprise must be incorporated in strategic planning efforts. 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.over the past twenty years. In this paper customer relationship management in retail banking has been described.customer relationship management in retail banking. Compliance with customer information regulations is becoming increasingly complex as regulations are growing at all operating levels. 33 . and even “inside jobs” where staff sell customer data to criminals. the health and strength of the company's relationship with its customers – its most critical economic asset – is its best predictor of the future. 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. constant phishing expeditions by criminals seeking to trap unwary customers. They can identify their own strengths and weaknesses. chart out path future progress and improvement. With better understanding of customers' perceptions. Adding to this complexity. This article is an attempt to review the necessary requirements. Expanding legislative and industry requirements for customer security are also increasing costs for financial services companies. where they stand in comparison to their competitors. and discuss the steps that need to be taken in order to measure and track customer satisfaction. The threats come from many quarters − including increasingly sophisticated identity thieves. EDS viewpoint paper.


It specifies the details of the procedures necessary for obtaining the information needed to structure and/or solve marketing research problems.The perceived level of service quality provided to retail bank customers in private a bank is not higher than that in public sector bank RESEARCH DESIGN It is a framework or blueprint for conducting the marketing research project. to analyze perceptions about the service quality of banks and motivation behind choosing a particular brand among people . 2.1. Major Hypothesis (s): H0. To study the dimensions of quality banking service in private and public sector banks. My research design would involve the following components: Step 1: Designing the descriptive phases of research. 3. Step 4: Constructing and pretesting a questionnaire or an appropriate form for data collection. To fulfill the Marketing Research problem. To study the difference between the quality perceptions of private and public sector retail bank customers. I propose to take a sample of around 100-120 respondents 35 . To know the perceived level of service quality provided to retail bank customers in private and public sector banks. Step 2: Defining the information needed i.The perceived level of service quality provided to retail bank customers in private a bank is higher than that in public sector bank H1. Step 5: Specifying the sampling process and sample size.e. I will be using a structured questionnaire. Step 3: Specifying the prospective measurement and scaling procedures that would be used in the research like Likert Scale which comes under itemized rating scales.

because the major objective of my research is to: • To estimate the percentage of units in a specified population exhibiting a certain behavior i.e what factors play an important role in the consumers’ preference for choosing a particular bank and the services provided by different banks. • To determine the degree to which marketing variables are associated i. Exploratory research is used in cases when you must define the problem more precisely. and understanding of. 2. Type of research design to be adopted Research design may be broadly classified as exploratory or conclusive. representative sample and the data obtained are subjected to quantitative analysis.e for which dimensions of service quality a particular bank is preferred. 36 . the problem confronting the researcher. Causal research is a type of conclusive research where the major objective is to obtain evidence regarding cause and effect relationships. Descriptive research. Under conclusive research we have two kinds of researches: 1.usually market characteristics or functions. The primary objective of exploratory research is to provide insights into. Conclusive research is typically more formal and structured than exploratory research. Data will be analyzed with the help of SPSS software by forming bar charts. Causal research. It is based on large. identify relevant courses of action or gain additional insights before an approach can be developed.Step 6: Develop a plan for data analysis. Descriptive research is a kind of conclusive research that has as its major objectives the description of something. DESCRIPTIVE RESEARCH will be primarily used.

• To make specific predictions like which bank is preferred most by the people, whether public or private.

The sampling design process includes 5 steps.

Defining the target population- It consists of customers of Retail Banks. Defining the sample frame – which in this case consists of students, businessmen ,servicemen etc. who have been classified on the basis of age group like: – – – –

18-24 years 25-34 years 35-44 years 45-60 years Above 60 years

Selecting the sampling technique.

Sampling Techniques may be broadly classified as I. II. Non probability Sampling Probability Sampling

I propose to use Non probability sampling under which Judgmental sampling (which is a form of convenience sampling) would be used. In this the population elements are purposely selected based on the judgment of the researcher.
Materials and Methods: A research design is the arrangement of conditions for collection of data in a manner that aims to combine relevance to the research purpose with economy in procedure. In this research the following SAMPLE DESIGN will be used: 1. Geographical area: Delhi/ NCR 37

2. 3. 4.

Sample size: 120 Sample Technique: Convenience Sampling and Snowball Sampling Data Source: Primary Data (Questionnaire).

Processed procedure: 1. Tabulation 2. Graphical presentation 3. Interpretation

Questionnaire -The questionnaire will be administered in Delhi and NCR region. Sample data collection for pre- testing - A sample of 30 respondents will be taken for pre-testing.




The various parameters under the assurance aspect included questions about how much assured the customers are about their money being safe with that bank . The various parameters under the responsiveness aspect included questions about the degree of responsiveness of that bank’s employees to respond to the customer’s problems.A sample of 116 respondents was taken across 4 banks--2 public and 2 private sector banks. ability to instill confidence in the customers and being polite and kind to customers. The data was collected by way of a questionnaire outside these banks. immediately when the customers came out after completing their transaction. They were asked to rate the Bank. that the bank will not go bankrupt and they can withdraw their money from anywhere as and when required. 40 . their expected level of service quality on these dimensions was also noted. with which they had just completed their transaction on the five dimensions of service quality— • • • • • Tangibility Reliability Responsiveness Assurance Empathy Simultaneously. The various parameters under the tangibility aspect included questions about the visual appeal in the exterior and interior of the bank and about the employees appearances. The various parameters under the reliability aspect included questions about the ability of the bank to provide precise information. to deliver error free service and to keep information confidential.

• • Dimension of Quality Banking Services in Various Banks. Thereafter composite scores have been calculated on these dimensions and the analysis has been presented in two parts— • Comparison of perceived and expected level of service quality provided to retail bank customers. their willingness to solve problems and ability to provide individualized attention. 41 .The various parameters under the empathy aspect included questions about the degree to which the employees of that bank completed transactions in a timely manner. The differences between the quality perceptions of private and public sector retail bank customers.

6 2.7 2.70043103 M ean of tangibles as per expectations M ean of tangibles as per perception T G AN IBLES 42 . DIMENSION OF TANGIBILITY Mean scores Perceived service quality 2.8 2.COMPARISON OF PERCEIVED AND EXPECTED LEVEL OF SERVICE QUALITY PROVIDED TO RETAIL BANK CUSTOMERS.75 2.85 2.700431034 Com parison of expected and perceived service quality for the aspect of tangibles Mean scores 2.65 2.810344828 Expected service quality 2.81034483 2.

The mean score of perceived service quality is 2.75 2.81 while the mean score of expected service quality is 2.65 2. DIMENSION OF RELIABILITY Mean scores Perceived service quality 2.The above graph and table shows that Banks fare better on the tangibility aspect of service dimension than it was expected by the customers.70.605603448 perception of customers about reliability of the bank expection of customers about the reliability Mean scores R eliabilty aspect 43 .693965517 2.6 2.7 2.693965517 Com parison of perceptions and expectations of custom ers on the aspect of reliability 2.55 2.605603448 Expected service quality 2.

44 .The above chart and graph shows that customers expectations about the reliability of the banks have not been met. This means that customers feel that employees across banks do not provide error free service nor do they deliver transactions confidentially an accurately.

meaning that banks have been able to deal with customers in a better way than expected by them.7 2 8 . 45 .6 7 3 0 e e tio a o t xp cta n b u re o siv n ss sp n e e R S O S E E SO E P N IV N S F B NS A K The perceived score is less than the expected service quality (2.6 2 2 .6 2 0865 . 2 2 .7 Mean Scores 2 .6 2 6 .6 2 4 .637931034 .3 respectively).706896552 Expected service quality 2.DIMENSION OF RESPONSIVENESS Mean scores Perceived service quality 2.7 6 9 5 p rce tio a o t e p n bu re o siv n ss sp n e e 2 3913 .6 2 .70 and 2.

790229885 2.7 2.686781609 E xpected m ean for custom ers on assurance aspect ASSURANCE The above table and graph shows that Banks do not come at par on the dimension of assurance as expected by the customers.75 Mean Scores 2. 46 . This means that the Banks have to instill confidence in customers regarding the former’s reputation and also to ensure that the customers have access to their money as and when they want.790229885 P erceived m ean for assurance aspect 2.686781609 2.8 2.DIMENSION OF ASSURANCE Mean scores Perceived service quality Expected service quality 2.6 2.65 2.

879310345 Expected service quality 2. the employees need to provide a more timely service.6 2 .623563218 2 .8 2 .4 2 . On the whole.6 2 3 5 6 3 2 1 8 Ex p e c te d s e r v ic e q u a lity Pe rc e iv e d s e r v ic e q u a lity EMPA THY The above table and graph shows that the employees of the bank need to be more empathic with customers.7 Mean Scores 2 . be willing to serve customer problems and provide individualized attention to customers.DIMENSION OF EMPATHY Mean scores Perceived service quality 2. So.8 7 9 3 1 0 3 4 5 2 .5 2 . the parameters of following dimensions need to be improved upon by the Retail Banks.25 points. The Expected mean is greater that perceived mean score by 0.Reliability.9 2 . Assurance and Empathy 47 .

DIMENSIONS OF QUALITY BANKING SERVICES IN VARIOUS BANKS Perception of Tangibles Perception of tangibles across Banks Banks ICICI Bank The exterior of this bank Count is visually appealing The interior of this bank Count is visually attractive Employees of this bank Count have neat appearances The interior of this bank is spacious Count 3 HDFC Bank SBI 5 3 Punjab National Bank Total 5 9 9 4 7 5 12 6 9 7 5 13 5 3 5 4 9 48 .

Customers are satisfied the most with ICICI bank with respect to the tangibility aspect. 49 .

Perception about Reliability Perception about reliability across Banks $Banks Punjab ICICI Bank Employees of this bank Count provide error-free service Employees of this bank Count carry out customer transactions confidentially Employees of this bank Count provide customers with precise information This bank informs customers about its financial operation accurately Count 4 2 1 2 4 3 2 2 2 4 2 0 1 0 2 1 2 1 1 3 HDFC Bank SBI National Bank Total 50 .

all the banks almost are at par with each other on the aspect of reliability with close figures in the range of 4 to 8.Herein. 51 .

Perception about Responsiveness $Banks Punjab ICICI Bank HDFC Bank SBI Employees of this bank have the knowledge to respond to problems Employees of this bank are polite to customers Employees of this bank are experienced Employees of this bank instill confidence in customers Count 7 5 5 7 14 Count Count 4 3 2 2 5 Count 2 2 0 3 4 National Bank Total 6 6 5 10 11 52 .

53 . while ICICI Bank comes a close second.The above graph shows that the employees of Punjab National Bank are perceived to be highly responsive by the customers.

Perception about empathy aspect $Banks Punjab ICICI Bank HDFC Bank SBI This bank does not make Count its customers stand in a queue for a long time Employees of this bank enact transactions on a timely manner Employees of this bank provide individualized attention to customers Employees of this bank are willing to solve customer problems Count 7 8 4 7 12 Count 3 5 3 5 9 Count 3 5 3 5 9 4 4 4 6 6 National Bank Total 54 .

55 .Punjab National Bank scores the highest on this parameter while HDFC comes a close second.

THE DIFFERENCES BETWEEN THE QUALITY PERCEPTIONS OF PRIVATE AND PUBLIC SECTOR RETAIL BANK CUSTOMERS Overall service quality rating in public and private sector banks Type of Bank Private Sector Highly Unsatisfactory Count 21 40 17 27 15 60 Public sector 16 39 18 28 11 56 Total 37 79 35 55 26 116 Unsatisfactory Neutral Satisfactory Highly satisfactory Total Count Count Count Count Count 56 .

57 . the graph shows that more percentage of respondents are unsatisfied with the service quality levels provided by private banks than they are with public sector banks.Although there is very minute difference between the private sector banks and public sector banks on the aspect of satisfaction level . However.

58 . Almost 53 percent respondents are satisfied with tangible dimension of private sector banks whereas only 28 percent respondents are satisfied on this dimension with Public sector banks.Overall rating on the tangibility aspect Private Sector Public sector Total Highly Unsatisfactory Unsatisfactory neutral satisfactory Highly satisfactory Total 3 10 5 35 7 60 10 15 12 13 6 56 13 25 17 48 13 116 The private sector banks areway ahead of Public sector banks on this dimension.

Overall rating on Reliability aspect Type of Bank Private Sector Public sector Total Highly Unsatisfactory Unsatisfactory Neutral Satisfactory Highly satisfactory Total 7 20 5 20 8 60 5 8 4 32 7 56 12 28 9 52 15 116 59 .

More no of respondents (33 percent) find private sector banks to be unreliable than public sector banks(14 percent) 60 .

61 .Overall rating on the responsiveness aspect Type of Bank Private Sector Public sector Total Highly Unsatisfactory Unsatisfactory neutral satisfactory Highly satisfactory 17 23 2 10 8 9 31 3 11 2 26 54 5 21 10 More percent of respondents are unsatisfied with the responsiveness of Public sector bank employees than are with private sector bank employees.

The private sector banks figure is at a mere 16 percent. of public sector customers(almost 75 percent) feel assured by such banks.Overall rating on assurance aspect Type of Bank Private Sector Public sector Total Highly Unsatisfactory Unsatisfactory neutral satisfactory Highly satisfactory Total 12 27 6 10 5 60 1 3 4 42 6 56 13 30 10 52 11 116 More no. 62 .

63 . of respondents of private sector banks feel that employees empathize with them than public sector banks.Overall rating on empathy aspect Type of Bank Private Sector Public sector Total Highly Unsatisfactory Unsatisfactory neutral satisfactory Highly satisfactory 6 9 7 32 6 12 19 9 12 4 18 28 16 44 10 More no.

5 SUGGESTIONS AND CONCLUSIONS Recommendations for Improving the Service Quality: 64 .CHAPTER.

65 . Berry and Zeithaml who are academic research pioneers on service offer 9 lessons that they maintain are essentials for improving service quality across service industries: 1. Listening: Understand what customers really want through continuous learning about the expectation and perceptions of customers and noncustomers E. use common sense. Recovery: To satisfy customers who encounter a service problem. Basic Service: Service companies must deliver the basics and do what they are supposed to do keep promises. keep customers informed and be determine d to deliver value to customers. Surprising customers although reliability is the most important dimension in meeting customer’s service expectations process dimension s.Parasuraman. listen to customers.g. and develop a problem resolution system. assurance. E. 4. 6. service companies should encourage customers to complain (and make it is easy for them to do so) respond quickly and personally. by means of service quality information system 2. 5. Fair Play: Service companies must make special efforts to be fair and to demonstrate fairness to customers and employees.g. Service Design: Develop a holistic view of the service while managing its many details.. Reliability: Reliability is the single most important dimensions of service quality and must be a service priority 3. responsiveness and empathy are most important in exceeding customer’s expectations for example by surprising them with uncommon swiftness grace courtesy competence commitment and understanding.

Enables the development of stronger customer/supplier relationships. 5. Provides access to a greater customer base (to those who require quality standards). internal force called corporate culture. Employee Research: Conduct research with employees to reveal why service problems occur and what companies must do to solve problems. 3. Ensures operational consistency. Productivity. Increases the efficiency of external audit and site visits. Team Work: Teamwork is what enables large organization to deliver service with care and attentiveness by improving employee motivation and capabilities. and general operations. 11. Demonstrates the company’s accountability and focus on continuous improvement. Servant Leadership: Quality service comes from inspired leadership throughout the organization from excellent service system design from the effective use of information and technology and from a slow to change. return Rates. Establishes a method to gather and Measure quality and performance data. reliability.7. on-time deliveries. Demonstrates a commitment to product Quality and customer value (focus on cycle-time reductions. Enhances competitive position. powerful. 8. 9. 4. supplier management expenses. Reliability of processes and production. 6. Supply chain efficiencies and Employee teamwork 10. audits. 8. invisible. Other Suggestions 66 . 7. Decreases costs of product life cycle management. Improves customer service and overall satisfaction. Delivers improvements in Performance∼ (manufacturing and service). Benefits of following these points: 1. defect elimination). 9. all. 2.

67 .• Public sector banks need to upgrade their infrastructure and technology platform. • Private sector banks need to upgrade on their perception of reliability and responsiveness among the customers. This crisis has particularly degraded the perception of banks. Particularly this aspect will be of utmost importance in the coming years as banking industry will be gearing to recover from the subprime crisis. This aspect will assume special importance in the present scenario because. • Public sector banks need to leverage their advantages of wide base of deposits and the perception of assurance and private sector banks need to leverage their advantage of providing diverse services across customer base. Only then they will be able to compete with public sector banks. • Public sector bank employees need to empathize more with customers. every bank is fighting for market share of deposits and only those that provide better service quality will be able to survive in future. particularly private and foreign ones in the eyes of customers.

an expanding middle class and increase in private and foreign banks. all leading banks in the country are making full fledged efforts to be the most preferred bank of customers. Indian banks have introduced changes in phases. The special thrust areas have been. providing diversified products to customers in line with moving towards the concept of universal banking. According to a report by Boston Consulting Group. 68 . driven by a burgeoning national economy.4 trillion in 2005 to US $ 23 trillion by 2015. complete infrastructure overhaul. the banking industry is one of those industries that offers almost the same products. doing away with manual system of record keeping. the profit pool of Indian Banking Industry is estimated to increase from US $ 4. the domestic credit market of India is estimated to grow from $ 0. Since. it is only the quality of services that can help banks to differentiate themselves from their competitors.8 Bn in 2005 to US $ 20 Bn in 2010. thrust on professionalism among staff members. adopting corporate governance standards and emphasizing on promotional measure.adoption of new technology. Also. The present study has strived to contribute in this endeavor of building knowledge base for delivering superior service quality. With such a high potential in Indian Banking Industry.Conclusion Over the years.


Zenios(Financial Institutions Center). Dr. Chaisomphol Chaoprasert* & Dr. < http://fic.indianmba. DICK (2003)Market Size.A MultidimensionalApproach .last viewed dcecember 11. (2005)Measuring Banks’ Automated Service Quality:A Confirmatory Factor Analysis Approach.google.com/Faculty_Column/FC328/fc328. Profitability and Quality of Banking Services .pdf> 5.wharton.2010< http://bsris. Andreas Soteriou Stavros A. < http://docs. Dr.insead.pdf+Measuring+Banks %E2%80%99+Automated+Service+Quality:A+Confirmatory+Factor+Analysis+Approach. ASTRID A.pdf> 2.ac.edu/dick/personal/documents/MarketsizeQuality_publishedversion. Mohammed Al-Hawari.pdf> 3.nz/V16/MB_V16_A1_AlHawari.edu/abac_journal/2004/jan04/abacvol24no1_artical02. last viewed December 10 .REFERENCES References Cited: 1. last viewed 2010.com/viewer?a=v&q=cache:biLqoGdWcgIJ:marketingbulletin.upenn. Foundation University Institute of Management and Computer Sciences Excellence of Banking Services .& hl=en&gl=in&pid=bl&srcid=ADGEEShgyKvD3wZhOlSn2kp13itpfJZizqIggLN8cRrPX6bQSx kAa48OAKSdQ6WY0HlULi9e6620pT9biCqU7xhoPXnJiVFicEit4xQNTGkkrO_7z1IFZAoHMa DdwBaUZ8_zW5AJREGY&sig=AHIEtbRqYxC1ItdRqHqW_RhBi6Bd9K-lmA> 6.swu. Manoj Kumar Dash Asst. Hummayoun Naeem and M.Efficiency. Iqbal Saif.pdf> 4.th/iprc/4th/10. Service Quality.massey.last viewed December 9.au.2010. Barry Elsey (2009)Service Quality Improvement in Thai Retail Banking and its Management Implications.< http://www.2010. < http://faculty. and Competition in Banking.edu/fic/papers/97/zenios.last viewed December 12.ac. Nicole Hartley and Tony Ward.html > 70 .2010<http://www.journal. Professor Galgotia College of Engineering & Technology Greater NoidaMeasuring Customer Satisfaction in The Banking Industry .

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Annexure QUESTIONNAIRE The Objective of this research is to analyze perception about the quality of services offered by the retail banks. What had been your main reason behind opening your account with this bank? Near home/office Company sponsored account Better service quality Well networked branches 72 . How often do you visit this bank? In every 2-3 days Weekly Monthly Once in 2-3 months Rarely 2. 1. Since how long have you maintained your account with this bank? more than 5 years 3-5 years 2-3 years 1-2 years 6months-1 year Less than 6 months 3.

Strongly Agree Agree 2 3 Neutral Disagree 4 Strongly Disagree 5 1 The exterior of this bank is visually appealing 1 2 3 4 5 The interior of this bank is visually attractive 1 2 3 4 5 Employees of this bank have neat appearances 1 2 3 4 5 The interior of this bank is spacious 1 2 3 4 5 Employees of this bank provide error-free service 1 2 3 4 5 Employees of this bank carry out customer transactions confidentially 73 .4. Please rate the following statements on a scale of 1-5.

Strongly Agree 5 Agree 4 Neutral 3 Disagree 2 St. Please rate the following statements on a scale of 1-5. Does the sector (private or public) of a bank influence your preference for a particular bank?  Yes  No 7.Disagree 1 Employees of this bank have the knowledge to respond to problems 1 2 3 4 5 Employees of this bank are polite to customers 1 2 3 4 5 Employees of this bank are experienced 1 2 3 4 5 Employees of this bank instill confidence in customers 1 2 3 4 5 74 .1 2 3 4 5 Employees of this bank provide customers with precise information 1 2 3 4 5 This bank informs customers about its financial operation accurately 1 2 3 4 5 6.

This bank has a good reputation 1 1 2 2 3 3 4 4 5 5 It has sufficient no. If yes.Which age group describes you the best? . I do not get timely service. then please mark the appropriate reason/ reasons? This bank has good infrastructure The employees of this bank respond quickly and adequately to my needs. Will you recommend this bank to your friends/ family/peers?  Yes  No 9. With this bank there are less chances of fraud/error. 10. of ATM’S Your money with this bank is safe 1 2 3 4 5 This bank does not make its customers stand in a queue for a long time 1 2 3 4 5 Employees of this bank enact transactions on a timely manner 1 2 3 4 5 Employees of this bank provide individualized attention to customers 1 2 3 4 5 Employees of this bank are willing to solve customer problems 1 2 3 4 5 8. I do not feel my money is safe with this bank.If no. then please mark the appropriate reason/ reasons? • 18-24 75 This bank does not have necessary infrastructure facilities.

OCCUPATION : • • • • • • Employee ( pvt.• • • • 25-34 35-44 45-60 60 & above 11.What is your monthly income? • • • • No income Upto 10000 10000-20000 20000-40000 • • 40000-100000 Above 100000 GENDER : M  F  EMAIL/MOBILE NO. job) Employee ( Govt. job) Business Retired Student Housewife 76 .

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