ISSN 2348 - 8891

The Study of Customer Perception towards Banking Services of Banks in
Indore Region

*Bhupendra Kaur Saluja **Dr. Vivek Sharma ***Juhi Naik

Abstract:
The banking sector is one of the biggest service sectors in India and now-a-days is in a way to
attract the biggest market of Asia in investment. The banking sector today is focusing on how to
provide efficient services to its customers. The Indian Banking System consists of various financial
institutions whose objective is serving the people for their financial and economic needs. This
paper is a survey of customer perception towards banking services provided by banks in Indore
region. The purpose of this analysis is to measure customer’s awareness, perception and level of
satisfaction with regard to services offered by Indian banks in Indore city. The attributes like
internet banking, ATM services, timings, attitude of staff towards customer of the bank etc have
been analysed.

Keywords:
Customer Awareness, Banking Services, Service Quality, Customer Perception, Internet Banking.

INTRODUCTION
Banks play an important role in the economic development of a country. It is a financial institution that
accepts deposits and channels those deposits into lending activities either directly or through capital
markets. A bank connects customers which have capital deficits to those customers with capital surpluses.
The banking industry in India is facing certain challenges i.e. challenges of quality service, customer
satisfaction, customer retention, customer loyalty. Quality service plays a major role in achieving customer
satisfaction and creating brand loyalty in banking sector. One of the most momentous of such initiatives
was the substitution of private ownership by public ownership, through the medium of an ordinance of the
largest commercial banks in the private sector on 19 July 1969. This has popularly came to be known as

*Bhupendra Kaur Saluja, Pursuing M.Phil. (Management), IMS (DAVV), Indore
**Dr. Vivek Sharma, SR. FACULTY, IMS (DAVV)
***Juhi Naik, Pursuing M.PHIL (MANAGEMENT), IMS (DAVV), INDORE
Altius Shodh Journal of Management & Commerce

It is next most important business strategy. staffing and coordination are geared up to fulfill the needs of the customers.8891 nationalization of these banks without which it would not have been possible to transform the class banking into mass banking and align bank credit to serve the planned priorities and social needs. At that time it was known as the Bank of Calcutta. accuracy and resultant in customer service (Bide 1997). India has a well-developed banking system. lending money. Service is an invisible thing which is indispensable from the person who extends it. economic development of a country depends upon the success of its banking industry and this success is determined to a large extent by understanding the needs and satisfaction of its customers. which primarily were receiving money on deposits. In the earlier societies functions of a bank were done by the corresponding institution dealing with loans and advances. A bank can be said as customer oriented if its various organizational activities like organizational restructuring. He/she is aware of the kind of service level available around the world and thus expects the best from his/her bank. The Rangarajan Committee Report (1989) was the first path breaking step in this direction. lending and remittance of funds. The origin of banking in India can be traced back to the last decades of the 18th century. banking is a business which not only deals with borrowing. The committee observed that modern banking involves a great deal of processing of mass information and commitment to technology is the only solution that ensures timeliness. the Bank of England was given the monopoly for the issue of currency notes by an Act. Most of the banks in India were founded by Indian entrepreneurs and visionaries in the pre-independence era to provide financial assistance to traders. which started in 1786 were the first banks in India. Banking system occupies an important place in a nation’s economy. SBI is presently the largest commercial bank in the country. which highlighted that “computerization must be looked upon as a means to improve customer service and efficiency” and that “the banks workforce should realize that mechanization would lead to growth and employment expansion” (Bide 1997). The oldest bank in existence in India at the moment is the State Bank of India (SBI). Branch expansion programs formulated by the Reserve Bank of India aimed at making available necessary banking facilities in all parts of the country specially the unbanked rural and semi urban areas. A banking institution is indispensable in a modern society. The improved customer services will definitely increase profitability. The customers at the present juncture are well exposed to unstoppable innovations in communication technology. In 1708. agriculturists and budding Indian industrialists. The General Bank of India and the Bank of Hindustan. Thus. The State Bank of India came into existence in 1806. Banking has come to occupy a crucial position in a nation’s economy. Altius Shodh Journal of Management & Commerce . but also an important instrument for fostering economic growth. while highlighting the problems faced by Indian public sector banks and as antidote to the identified lacunae. transferring money from one place to another and bill discounting. Customer service is not only a critical function but plays a vital role for the business. An efficient service is one which is extended appropriately by identifying and understanding the needs of the individual customer from time to time. Britishers brought into India the modern concept of banking by the start of Bank of England in 1694. According to the modern concept. In nineteenth century various banks started operations. also stressed the need for greater measure of computerization in banks.ISSN 2348 . It plays a pivotal role in the economic development of a country. Subsequently Narasimhan Committee (1992). Both the banks are now defunct.

quality of service has been improved a lot as compared to traditional banking services. as the service quality improves. overall banking in India is considered as fairly mature in terms of supply. credit cards. forcing them to re-engineer many of their basic processes and systems. product range and availability. Mobile banking. The new age IT (Information technology) is bringing about sweeping changes in the banking industry. which can satisfy the increasing needs of customer. cutting operational costs. To sustain and grow in the global market industries require a strong banking system. Few of the technology-driven electronic banking services being offered are viz. customer retention and a bond of trust between customers and banks. Altius Shodh Journal of Management & Commerce . Tele-banking. Electronic Fund transfer has totally changed the way of providing services by the banks. Automated Teller Machine (ATM). Mobile banking. They aim at a profitable and wealthy part of the market. Internet banking. Well computerized foreign banks are beginning to compete seriously with the nationalized banks. and managing competition.8891 Current Scenario: Currently. Indian banking system is now ready for the global market because of the Automation. The banking system is facing the challenges with stiff competition and advancement of technology. anywhere anytime banking have provided number of convenient services to the customer. The customers have more choices in choosing their banks. Due to the advent of e-banking. Time is given more importance than money. Even though reach in rural India still remains a challenge for the private sector and public sector banks. ATM. Several innovative IT based services such as ATM. Internet banking etc. phone banking. New technological capabilities could be effectively used to create value and to better manage customer relationship. With years. The core issues faced by banks today are on the fronts of customer’s service expectations. The entire system has become more convenient and swift. the probability of customer satisfaction increases. Internet banking. Increased satisfaction in turn increases the mutual understanding. the services provided by banks have become easy and convenient. Phone banking and net banking are introduced. The banks which are providing these services on a wider scale to customers are more reputed in the eyes of customers. They are still dominating the commercial banking system. So. The Indian banking industry is passing through a phase of customers market. Efforts are being put to give a satisfactory service to customers. banks are adding services to their customers. smart cards. Technology can help banks in meeting these objectives. Almost 80% of the businesses are still controlled by Public Sector Banks. the competitive character has been promoted by facilitating the entry of foreign banks and their ATM stations. Information technology in the form of e-banking plays a significant role in providing better services at lower cost. A competition has been established within the banks operating in India. REVIEW OF LITERATURE Today world has become a global hub for business. Electronic Clearing Service (ECS). Electronic funds transfer (EFT).ISSN 2348 .

Doddaraju (2013) presented a study on customer satisfaction towards public and private sector banking services with special reference to the Anantpur District of Andhra Pradesh concluded that satisfaction level with regard to public sector units courtesy shown by bank staff at the counter is very low. (2011) determined the customer’s perception of service quality of the selected branches of SBI and study the major factors responsible for their satisfaction. convenience.The study shows that perceived usefulness.8891 Safeena et al (2010) determines the customer’s perception on internet banking adoption . To get suggestions for improvement or changes in the services of banks. Here. STATEMENT OF THE PROBLEM Customers are lifeblood for any business and banking industry is highly service oriented business. To know in which service quality dimension the bank is performing well and in which dimension it needs improvement.ISSN 2348 . facility and general factors like modernization of the bank. Altius Shodh Journal of Management & Commerce . G. A study on customer perception towards services provided by Public sector bank and Private sector bank in Coimbatore region reveals that private bank is providing better services to its customers than the public sector bank. Surbhi Singh and Renu Arora (2011) presented a paper on a comparative study of banking services and customer satisfaction in public. 4. To know about the customer preferences. consumer awareness & perceives risk are the important determinants of online banking adoption and have strong and positive effect on customer to accept online banking system. 6. private and foreign banks of Delhi and this study shows that the customers of nationalized banks were not satisfied with the employee behavior and infrastructure. Santhiyavalli. When there is service concern. OBJECTIVES OF THE STUDY 1. in this paper we tried to figure out the reason for the perception of the people residing in Indore city for choosing the banking service on the basis of cost. To give suggestions for improvement of quality of services in banks. promptness for attending customer. It is evident that public sector banks have a strong presence in the market. Therefore. while respondents of private and foreign banks were not satisfied with high charges. but in recent times they are facing stiff competition from private sector banks in the range and quality of services offered. To study what do people expect in new era of banking? 3.E. 5. it always deals with the perceptual decision taking of the customer. To understand the customer perception on internet service quality. 2. accessibility and communication MS Linda Mary Simon (2012). perceived ease of use. M. the banks should pay special attention to “Human Resource Development” by giving timely training to the employees to conduct themselves better. the various dimension associated with satisfaction.

To meet up with the objectives of study 50 customers were selected as sample unit. what. SPSS software was used as tool for statistical analysis and to bring interpretations. where. We have done personal interviews and we asked the person in front of us to fill the questionnaire and we were there with the respondents at all times in order to guide him/her and solved the queries at the time of filling in the responses. transaction based services are independent variables.The total sample size of the study is 50. services level and dimension in which derives satisfaction to the customers.ISSN 2348 . H1. Research Hypothesis: In this study customer perception is dependent variable and banking services. with varied income groups and varied age groups. IT enabled services. Descriptive Research Design is used in this study because it will ensure the minimization of bias and maximization of reliability of data collected. Data Collection Method: Primary Data: It is first hand data. when and how questions. The information relating to the customer perception towards services provided by all the banks in INDORE region is collected for the study through survey with the help of questionnaire . the questionnaires were filled by 50 respondents which were structured with questions of demographic profile. So. To carry out the study in more accurate convenience random sampling method was selected. The main tool in gathering primary data was questionnaire which was collected from 50 respondents. Altius Shodh Journal of Management & Commerce . places. of both genders. H0-There is no significant effect of customer perception towards banking services in Indore region banks. Primary data is collected by various approaches so as to get a precise. It is based on some previous understanding of the matter. In order to understand the customer perception towards services provided by the banks in Indore region. realistic and relevant data. These customers belong to various professions. accurate. The study covers respondent who are the customers of these banks. Research has got a very specific objective and clear cut data requirements. which is collected by researcher itself.8891 SCOPE OF THE STUDY The study encompasses banking services quality of all types of banks in Indore region each located at various regions. RESEARCH METHODOLOGY The present study is based on primary data. Descriptive Research Design: It seeks to determine the answers to who.There is significant effect of customer perception towards banking services in Indore region banks.

ISSN 2348 . In case of maintaining minimum balance in Account. Most of the customers claim that interest rate on saving is very low. null hypothesis is rejected. sometimes it is seen that ATM machines do not pick the card or remain out of service for few days. we could have reached to more accurate results. There is significant effect of customer perception towards maintaining minimum balance in account. There is significant effect of customer perception towards credit facilities provide by Indore region banks. There is significant effect of customer perception towards bank charges like ATM. In case of ATM services in multiple locations. In case of phone account facilities. Most of the customers disagree with the statement. 2. null hypothesis is rejected. DATAANALYSIS AND INTERPRETATION 1. 6. E-banking has adversely affected the individual‘s ability to interact with customers.05. null hypothesis is rejected. 2. 3. There is significant effect of customer perception. There is significant effect of customer perception towards compensation benefit provided by banks.05. p -value <0. p -value <0. If the sample size could be taken a bit larger.05. 4.05. null hypothesis is rejected. Primary data has its own limitations.05.05. Further these are installed at a location which does not suit customers. As this study was conducted only in Indore region the finding cannot be generalized for overall state. 5. null hypothesis is rejected. The perception of customers is limited to the time period of the study. Altius Shodh Journal of Management & Commerce .05. In case of e-banking services. null hypothesis is rejected. null hypothesis is rejected. p-value <0. Banks should increase the variety of services and also employees of the banks should be fully aware about the use of e-channels because a fully aware employee can effectively guide the customers. null hypothesis is rejected. 7. In case of interest rate on saving and fixed deposits p-value <0. for SMS facility some bank charge on Quarterly basis. p -value <0. In case of credit facilities p -value <0. 5. In case of bank charges. accounting for more than 60000 ATMs in India. p -value <0. 4. The study is limited to the study of expectations of and perceptions of customers having an account in banks. nearly all the banks have installed ATMs to increase their reach to the consumers. There is significant effect of customer perception towards interest rate provide by banks. In case of compensation benefit p-value <0.8891 LIMITATIONS 1.05. ATM card used mainly for cash withdrawals. 3. 8.

13. p -value <0. p -value <0. 17. null hypothesis is accepted. Only some banks mainly nationalized banks provide this facility. p -value <0.05. p -value <0. Therefore the staff of the bank should be friendly. Most of the banks provide locker facilities except a few. Not many banks provide gold investment facility. p -value <0. p -value <0.ISSN 2348 . Bank should provide loan at the lower interest rate and education loans should be given with ease without much documentation.8891 9. 14. Lack of online shopping payment facilities.05. In case of staff efficiency. In case of customer care facility. In case of locker facilities. 10. null hypothesis is rejected. In case of plastic money facilities. null hypothesis is rejected. there is significant effect of customer perception and the use of plastic money like Debit cards. The reason behind not informing customers about new service/scheme would be poor communication and customer service of nationalized banks. null hypothesis is rejected. Proper description of charges debited from the account should be made in the account statement. null hypothesis is accepted. Credit cards are popular among youths. misuse of ATM cards are some problems faced by the customers but they are given comparatively less consideration.05.05. p -value <0. On the analysis of customers view. 12. null hypothesis is rejected.05.05. There is significant effect of location of banks on customers.05. In case of minimum interest rate on loans and advances. There is significant effect of customer perception towards competitive service charges of various banks. There is no significant effect of customer perception towards innovative banking services. In case of online shopping facility. p -value >0. 18.05. polite and trained enough to guide the customer effectively. null hypothesis is rejected. p -value >0. In case of gold investment facility (coins) p–value>0. there opinion is that the private bank charges are high as compared to nationalized banks. It is required that there should be improved technical infrastructure in the form of uninterrupted internet connectivity and orderly working of ATMs (24/7). null hypothesis is rejected. No respondent answered positive to be informed by the bank on introducing any new service or scheme. Most of the bank staff is unable to handle customer’s problems efficiently.05. 16. In case of innovative banking services. Most of customers argued that most of the banks do not provide 24 hours customer care facility. 11. so it is necessary that staff should be given proper training on how to handle a large number of customers. In case of convenient location of banks. Altius Shodh Journal of Management & Commerce . In case of competitive service charges.05. null hypothesis is accepted. 15. null hypothesis is rejected.

Publicizing the bank in the right area add value to brand.To develop the social banking environment. as the customer would find himself as a part of the organization. 2. Banks should win customers confidence by providing them guidance regarding service charges. Banks should utilize the proper media resource for promoting their services. Addressing to the individual customer needs is one crucial aspect to be considered. bank officials should maintain good relationship with the customers. Modern technology and innovation are required in every aspect of banking system . Therefore. There is significant effect of customer perception towards timely collection of cheques and deposits. so that banks can deliver quick and prompt services. interest rate. Establishing branches in every possible area would be better way to progress. New investment schemes should also be displayed at appropriate places. SUGGESTIONS 1.ISSN 2348 . Training the human resource in this regards would help the banks retain their customers and attract more. Irrespective of banks. CONCLUSION Satisfaction level with regard to courtesy shown by bank staff at the counter is very low. 3. service tax. Altius Shodh Journal of Management & Commerce . All branches of a bank should provide different facilities like parking. Employees should be trained on technical and behavioral aspects. employees who interface the customers directly are ought to be very empathetic and should be able to understand the customer needs and requirements. This would build a good relationship between the bank and the customer. This would really help banks to create more accounts give more reach to the banks. 4. p -value <0. 5. seating arrangement. penalty if any etc at an early stage. 6.05.8891 19. In case of timely collection of cheques and demand drafts. drinking water and sanitary facilities. null hypothesis is rejected. banks should pay special attention to “HUMAN RESOURCE DEVELOPMENT” by giving timely training to the employees to conduct themselves better.

Dhar and Silky Vigg Kushwah (2009): Service quality expectations and perceptions of Public and Private Sector Banks in India: A comparative study. Sourabh Sharma and Vishal Vyas: The Influence Of computerization in public and Private Sector Banks in India: A comparative study 11. 7.3. Private and Foreign banks. vol 2.ISSN 2348 . 4. Santhiyavalli.8891 REFERENCES 1.287. Dr. India. 8. Ravi K. vol 1. 5. Altius Shodh Journal of Management & Commerce . Shah (2012): A study of Perceptions Of customer towards e-banking services in Thane city-Maharashtra. Kajal Choudhary and Monika Sharma (2011): Performance of Indian Public sector banks and Private sector banks: comparative study. vol 3. 3. Surabhi Singh and Renu Arora (2011): A comparative study of banking services and customer satisfaction in Public. A case study Of Banking sector. pp. (2011) the study of the customer perception of service quality of the selected branches of SBI. Manasa Nagabhushnam: A study on customer service quality of banks in India. Linda Mary Simon (2012): A study on customer perception towards services provided by public sector bank and Private sector bank. 10. G. 2. Doddaraju (2013): A study on customer satisfaction towards public and private sector banking services (with special reference to Anantpur district of Andhra Pradesh). Shikha Agarwal: Indian Service Sector. No. 6. issue 12. Pallavi A. M. E. Global journal of Management and Business Studies. 9. Safeena et al (2010): the study on consumer’s perspective on internet banking adoption.

5600 1.0600 1.03095 .87773 .7800 1.15649 Customer care facility 50 3.1400 .0204 .09339 .14231 Plastic money facilities 50 3.3400 1.07684 . Deviation Std.7200 1.82040 .12539 Efficiently solved customer 50 problem 3.9800 .7000 1.37396 .17323 Rate of interest 50 3.15229 Competitive service charges 50 3.14297 50 3.95640 .14580 Convenient location 50 4.6800 1.15013 Timely collection of cheques 50 and DD 3.06157 .01900 . Error Mean Compensation benefit 50 3.00631 . SMS) 50 3.14411 shopping Interest on advances payment loans Gold investment facility and Altius Shodh Journal of Management & Commerce .13731 .11602 Locker facility 49 4.03982 .15054 Credit facilities 50 3.19431 ATM in multiple locations 50 3.6400 1.22491 .16084 50 3.1000 1.10657 .07210 .7200 1.ISSN 2348 .06445 .4000 1.13525 Service charges (ATM.14705 E-banking 50 4.7400 1.80837 .1800 1.9400 .15162 Online facility 50 3.3600 1.15463 Bank charges for minimum 50 balance in a/c 3.9800 1.01096 .14357 Innovative banking services 50 3.01519 .8891 ANNEXURE T-TEST One-Sample Statistics N Mean Std.11432 Phone a/c service 50 3.

043 Rejected Rate of interest 4.000 Rejected E-banking 9.960 49 .8891 Test Value = 3 Particulars/Factors t df p-Value Null Hypothesis Compensation benefit 2.251 49 .664 49 .000 Rejected Locker facility 8.000 Rejected 4.000 Rejected Efficiently problem Online facility solved shopping customer payment Altius Shodh Journal of Management & Commerce .269 Accepted Gold investment facility 2. SMS) 5.028 Accepted Timely collection of cheques 4.200 49 .000 Rejected Service charges (ATM.000 Rejected Convenient location 6.000 Rejected Credit facilities 6.694 49 .036 49 .000 Rejected Innovative banking services 2.972 49 .609 Rejected ATM in multiple locations 6.719 and DD 49 .265 49 .000 Rejected Interest on loans and advances 1.138 48 .001 Rejected 5.ISSN 2348 .000 Rejected Bank charges for minimum .515 balance in a/c 49 .078 49 .000 Rejected Plastic money facilities 8.044 49 .950 49 .119 49 .000 Rejected Phone a/c service 5.447 49 .014 Accepted Customer care facility 3.000 Rejected Competitive service charges 4.876 49 .938 49 .556 49 .

…………………………………………………………… E-MAIL ID.graduate Others Self -Employed Professional Student Retired Up to 100. Indore.000 2.ISSN 2348 .Phil.000 .000 . Please fill this questionnaire to help us in completing our project. Salary PHONE NO. DAVV.00.000 100.8891 QUESTIONNAIRE “The Study of Customer Perception towards Banking Services of Banks in Indore Region” Dear customer.2.4. We are carrying out the project entitled “The study of customer perception towards banking services of banks in Indore region”.…………………………………………………………… Altius Shodh Journal of Management & Commerce .D.50.50.000 to above Public Private Education - Occupation- Income - Bank Type - Type of Account – Demat Saving Current F. IMS. We are the students of M.000 4. PERSONAL DETAILS: Gender – Male Female Age - 18-30 30-45 45-60 60 & above Undergraduate Graduate Post .00.

Does your bank provide ATM services in multiple locations? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 7. Does your bank provide best e-banking services? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 8. Does your bank provide necessary phone banking facilities? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 9. Does your bank provide any compensation benefit to customers? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 2. Does your bank provide plastic money facilities? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 10. Does your bank provide good interest rate on Saving A/C and FDs? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 3. Does your bank charge a variety of service charges (SMS/ATM)? Strongly DisAgree / Disagree / Uncertain / Agree / Strongly Agree 5.ISSN 2348 . Does your bank provide good credit facilities? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 4. Does your bank provide locker facility? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 11. Does your bank charge unnecessarily for not maintaining minimum balance in a/c? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 6.8891 1. Does your bank’s staff efficiently solve customer problems ? Altius Shodh Journal of Management & Commerce .

We assure you that this information will remain confidential. Does your bank provide gold investment facility (coins) ? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 19. Is your bank conveniently located ? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 13.ISSN 2348 . Altius Shodh Journal of Management & Commerce .8891 Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 12. Does your bank properly advertise about innovative banking services ? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 15. Does your bank provide 24/7 customer care facility? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 16. Does your bank provide timely services for collection of cheques and demand draft ? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree Thanks for your valuable time given to us. Does your bank provide online shopping facility ? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 17. Does your bank charge minimum interest rate on loans and advances ? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 18. Are the service charges of your bank competitive ? Strongly Disagree / Disagree / Uncertain / Agree / Strongly Agree 14. Thanks for your co-operation.