MAJOR PROJECT

On

A STUDY ON COUNSUMER PERCEPTION TOWARDS AXIS BANK.

By

Shiwani chaudhary

A3146916003

B.Com. (Hons.) 2016-19

Under the Supervision of

Mr. ATUL KUMAR

In Partial Fulfillment of the Requirements for the Degree of

Bachelors of Commerce (Hons.)
At
AMITY COLLEGE OF COMMERCE AND FINANCE
AMITY UNIVERSITY UTTAR PRADESH
SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA

INTRODUCTION
 Axis Bank is the third largest of the private-sector banks in India offering a comprehensive
suite of financial products. The bank has its head office in Mumbai and registered office in
Ahmedabad. It has 3,703 branches, 13,814 ATMs, and nine international offices. The bank
employs over 55,000 people and had a market capitalization of ₹1.31 trillion (US$18 billion)
(as on March 31, 2018). It sells financial services to large and mid-size corporates, SME, and
retail businesses
As of 30 Jun. 2016, 30.81% shares are owned by promoters & promoter group (United India
Insurance Company Limited, Oriental Insurance Company Limited, National Insurance
Company Limited, New India Assurance Company Ltd, GIC, LIC & UTI).[5] The remaining
69.19% shares are owned by mutual funds, FIIs, banks, insurance companies, corporate
bodies, and individual investors among others.

UTI Bank opened its registered office in Ahmedabad and corporate office in Mumbai in
December 1993.] The first branch was inaugurated on 2 April 1994 in Ahmedabad by Dr.
Manmohan Singh, the Finance Minister of India. UTI Bank began its operations in 1993,
after the Government of India allowed new private banks to be established. The Bank was
promoted in 1993 jointly by the Administrator of the Unit Trust of India (UTI-I) Life
Insurance Corporation of India (LIC), General Insurance Corporation, National Insurance
Company

The world of banking has assumed a new dimension at dawn of the 21st century with
the advent of tech banking, thereby lending the industry a stamp of universality. In general,
banking may be classified as retail and corporate banking. Retail banking, which is designed
to meet the requirement of individual customers and encourage their savings, includes payment
of utility bills, consumer loans, credit cards, checking account and the like. Corporate banking,
on the other hand, caters to the need of corporate customers like bills discounting, opening
letters of credit, managing cash, etc. Metamorphic changes took place in the Indian financial
system during the eighties and nineties consequent upon deregulation and liberalization of
economic policies of the government. India began shaping up its economy and earmarked
ambitious plan for economic growth. Consequently, a sea change in money and capital markets
took place. Application of marketing concept in the banking sector was introduced to enhance
the customer satisfaction the policy of privatization of banking services aims at encouraging
the competition in banking sector and introduction of financial services. Consequently, services
such as Demat, Internet banking, Portfolio Management, Venture capital, etc., came into
existence to cater to the needs of public. An important agenda for every banker today is greater
operational efficiency and customer satisfaction. The mew watchword for the bank is pretty
ambitious: customer delight. The introduction to the marketing concept to banking sectors can
be traced back to American Banking Association Conference of 1958. Banks marketing can be
defined as the part of management activity, which seems to direct the flow of banking services
profitability to the customers. The marketing concept basically requires that there should be
thorough understanding of customer need and to learn about market it operates in. Further the
market is segmented so as to understand the requirement of the customer at a profit to the
banks.

“An establishment for the custody of money, which it pays out, on a customer’s order.”

“A Bank is defined as an institution which collects surplus funds from the public, safeguards
them, and makes them available to the true owner when required and also lends sums be their
true owners to those who are in need of funds and can provide security.”

“One which transacts the business of banking which means the accepting, for the purpose of
lending or investment of the deposits of money from the public, repayable on demand, or
otherwise and withdraw able be cheque, draft, order or otherwise. “The banking system is an
integral subsystem of the financial system. It represents an important channel of collecting
small savings form the households and lending it to the corporate sector. The Indian banking
system has Reserve Bank of India (RBI) as the apex body for all matters relating to the banking
system. It is the central Bank of India. It is also known as the Banker to All Other Banks. The
banking industry of India is now running in a dynamic challenge concerning both customer
base and performance. Service quality, customer satisfaction, customer retention, customer
loyalty and delight are now the major challenges in gripping the banking sector. Service quality
plays a major role in getting customer satisfaction and creating brand loyalty in banking sector.
Most of the literature reviews referred in the paper reveals that as compared to public sector,
private sector bank customers’ level of satisfaction is comparatively more in India. Human
element acts an important role in perceived service quality as well as satisfaction. Public sector
banks need to redefine the customer service parameter in order to compete with the nationalized
private sector banks both in profitability and corporate image. This study is just a small step in
understanding the multi-dimensional construct of service quality and its implications in
competitive environment. This paper attempts to extract few dimensions of service quality as
perceived by bank customers and compares with five major dimensions already extracted in
past literature. The financial reform process initiated in 1991, poses lot of challenges before
the banking sector in India as never before. After nationalisation of commercial banks in India
in 1969 and 1980, the ownership of major commercial banks was taken over by the
Government. Then, the Government decided the agenda for action, directing the flow of credit
and even determining the pattern of credit flows to specific sector. After nationalisation,
competition was restricted and the banking sector was insulated from world financial markets.
Over a period of time, the prevailing environment created a mind-set, where one began to look
for guidance for everything. There was a comfort among the bankers when approval, guidance
or confirmation of actions taken was received from the higher authority. The banking personnel
have completely lost their vigour and stopped thinking and operating like business
organisation. A country without efficient and profitable financial markets suffers from multiple
disadvantages in a more open world. When India opened up its financial markets in the early
1990s, the weaknesses in its financial sector were exposed. It was not able to attract foreign
investment, suffered worst in real interest rates in an attempt to attract capital, riddled with the
threat of capital flight and erosion of tax base. Another significant aspect is the gradual
weakening of the financial base of the banks and over loaded with non-performing loans. In
matters relating to adoption of technology and handling difficult issues like credit proposals
and personnel matters; the public sector banks face the thorny path. The situation was further
worsening with increasing competition because of the entry of new players and the impact of
changing environment. In issues like changing the attitude of personnel and developing
strategies for survival of both the strong and weak banks are more justified. All banks look
back in order to learn from the corporate failures of the past while designing their future
strategies, more so for the public sector banks. With the entry of new generation tech-savvy
private banks and the expansion of operations of foreign banks, the banking sector has become
too competitive. The ‘one for all’ and ‘all for one’ syndrome is being given a go-by. To deal
with the emerging situations, bankers have to shed a lot of old ideas, change in practices,
develop customer loyalty programmes, and adopt a distinct approach to meet the challenges
ahead. In a fiercely competitive market, non-price factors like customer service become more
important. Hence, it is desirable for banks to develop a customer-centric approach for future
survival and growth. The awareness has already dawn that prompt, efficient and speedy
customer service alone will tempt the existing customers to continue and induce new customers
to try the services offered by a bank. Indian banks have already taken lot of initiatives in this
regard. Further, it has been realised that Indians banks have miles to go to capture the recent
trends and to be at par with the Western counterparts. As a result, many banks have introduced
new customer friendly measures like 24-hour banking, 7-day and anywhere banking, internet
banking, extended business hours, ATM network, etc. It is important to continuously build on
this goodwill in the months to come. In today’s competition in Indian banking industry,
customers have to make a choice among various service providers by making a trade-off
between relationships and economies, trust and products, or service and efficiency. Customers
are increasingly aware of the options on offer in relation to the rising standards of service. In
this context, expectations rise and customers become more critical of the quality of service.
Service quality, customer satisfaction, customer retention and delight are now the major
challenges in gripping the banking sector in India. Again, the deregulation in this sector created
a great change in present scenario. In addition to the service diversification, the idea of
customer satisfaction and formulation of marketing strategies to drag the customer towards the
banks are now the key issues in order to survive. Level of customer satisfaction is becoming
the major target of banks to increase the market share. More specifically, the cost of retaining
existing customers by enhancing the products and services that are perceived as being
important is significantly lower than the cost of winning new customers. Customer satisfaction
is nothing but an outcome of purchase and use resulting from the comparison of the rewards
and costs vis-à-vis customers’ expectations and actual performance of the product purchased
in relation to the expected consequences. Recently, there has been a keen interest, especially in
banking, where banks are looking at the life time value of the customer base rather than
focusing on the cost of transactions. Customers perceive services in terms of the quality of the
service and how satisfied they are overall with their experiences. In the light of the research
findings, interest in service quality is, thus, unarguably high. Poor quality places a firm at a
competitive disadvantage. If customers perceive quality as unsatisfactory, they may be quick
to take their businesses elsewhere. Thus, it is clear that service quality offers a way of achieving
success among competing services, particularly in the case of firms that offer nearly identical
services, such as banks, where establishing service quality may be the only way of
differentiating oneself. Such differentiation can yield a higher proportion of consumers’
choices and, hence, mean the difference between financial success and failure. Initial efforts in
defining and measuring service quality emanated largely from the goods sector, a solid
foundation for research work in the area was laid down in the mid-eighties. They were amongst
the earliest researchers to emphatically point out that the concept of quality prevalent in the
goods sector is not extendable to the services sector. Being inherently and essentially
intangible, heterogeneous, perishable, and entailing simultaneity and inseparability of
production and consumption, services require a distinct framework for quality explication and
measurement.

REVIEW OF LITERATURE
AUTHOR YEAR TITLE ABSTACT METHODOLOGY MAJOR MAJOR
FINDINGS
(PUBLISHED ADOPTED ARGUMENTS
)

Vidhi 2009 customer The purpose of A cross‐sectional This study Dimensions of

kaur (Faculty satisfaction this paper is to research on retail has taken service quality
of with examine the banking customers into account are employee
Management private effect of service through a a specific behaviour,
Studies ) banks quality, and questionnaire is category of tangibility and
service conducted. retail information
convenience on Responses are banking technology.
customer analysed using customers. Dimensions of
satisfaction with regression analyses Thus, it limits service
private banks. generalizatio convenience are
n of results decision
to other convenience,
banking access
populations. convenience,
transaction
convenience,
benefit
convenience and
post‐benefit
convenience. For
private sector
banks except
tangibility and
benefit
convenience all
antecedents
have positive
impact on
customer
satisfaction.
Peter dauglas 2008 Private Reports the survey Discusses the Finds that
s (University bank findings of a implications quality
of Surrey, customer survey among for strategy expectations and
Guildford, expectation customers of since evaluation of
UK) s and private banks in sectorial services received
perceptions Greece on service differentiatio were marginally
quality n in banking higher in the
perceptions and is becoming private than in
expectations. blurred as a the public sector
result of in most of the
increasing dimensions
overlap measured; the
between relative
services and importance
competition attached to each
from related quality attribute
and was, however, of
substitute a similar profile
industries. for the two
Identifies the sectors. The
distinctivene perception of
ss of what is the profile of
perceived as services received
a service on was, however,
offer as different
essential between sectors,
ingredient to thus suggesting
competitive that they did
positioning deliver a
in financial different quality
services. of service.

Pooja Mengi: Customer Service sector like Case study:- survey This study It was found that
An Empirical Satisfaction banking industry, compares customers of
Study of with the whole range customers’ private sector
Private Service of activity and perceptions banks are more
Sector Banks Quality generation of of service satisfied with the
income swivels quality of service quality,
around the public and than those of
customer. It is private public sector
necessary to banks. The banks.
identify the key service
success factors in quality of
the banking both the
industry, in terms banks has
of customer
 satisfaction been
keeping in view measured
the increasing
market size and
intense
competition.

Alka Sharma 2006 the tough A number of Economic Times Customer Moreover, the
Versha competitive private sector and perceptions tough
Mehta arena in foreign banks of service competitive
which have entered the quality in the arena in which
banks Indian market and banking these banks
operate made it more sector of a operate today,
competitive. The developing maintaining the
onset of economy: a quality of service
competition from critical is a pre –
the private analysis requisite for
players and survival.
initiation of Therefore,
banking reforms measurement of
have led to an service quality
increased has increasingly
emphasis on created an
efficient customer interest among
service the service
providers

G.S. 2008 Customer Focusses on comparison There seems Customers in

Sureshchand perceptions investigating the to be a great developing
ar (Industrial of service critical factors of amount of economies seem
Management quality in customer variation to keep the
Division, the banking perceived service with respect “technological
Department sector of a quality in banks of to the level factors” of
of developing a developing of service services such as
Humanities economy: a economy – India. quality core service and
and Social critical Compares and offered by systematization
Sciences, analysis contrasts the the three of the service
Indian three groups of groups of delivery. while
Institute of banks in India banks. the “human
Technology with respect to Identifies the factors” seem to
Madras, the service quality factors that play a lesser role
Tamil Nadu, factors from the discriminate in discriminating
India) perspective of the the three the three groups
customers. groups of of banks
banks.
Bedi, Monica Apr- AN This study Services Research Its Findings
Sep2010 INTEGRATE attempts to implications indicated that
D investigate the in service quality is
FRAMEWO relationship competitive a significant
RK FOR between service environment determinant of
SERVICE quality, overall This paper customer
QUALITY, customer attempts to satisfaction in
CUSTOMER satisfaction and extract few Indian banking
SATISFACTI behavioural dimensions industry
ON AND intentions across of service irrespective of
BEHAVIORA public and private quality as public and
L banks in India. perceived by private sector
RESPONSES bank banks. However,
IN INDIAN customers different
BANKING and dimensions of
INDUSTRY compares service quality
with five were found to
major be statistically
dimensions significant across
already public and
extracted in private banks.
past
literature

Michel Services Consumers Highly Services relating

Laroche (Con Used and perceive the competitive to cheque
cordia Factors following criteria banking accounts are of
University, Considered as important in environment greater
Montreal, Important their selection tailoring importance than
Canada) in Selecting and patronage of their those relating to
a Bank: An commercial marketing savings
Investigatio banking facilities strategies to accounts. Speed
n across stress the of service,
Diverse satisfaction locational
Demograph of the above convenience,
ic Segments features, competence and
bank friendliness of
marketers bank personnel
may be are also
better able important.
to influence Significant
the target differences in
market attitudes and
segments opinions
dealt with. between the
sexes, language,
age, income and
educational level
groups are
revealed.
REFRENCES

Vinita Kaur: - cross‐sectional research on retail banking customers;

(Faculty of Management Studies)

Peter dauglas:- service quality perceptions and expectations among p;rivate and public bank
customers

(Deputy Director of the Surrey European Management School)

Pooja mengi:-Customer Satisfaction with Service Quality;

G.S. Sureshchandar: - investigating the critical factors of customer perceived service quality in banks
of a developing economy – India

(Industrial Management Division, Department of Humanities and Social Sciences, Indian Institute
of Technology Madras, Tamil Nadu, India)

Bedi: - investigate the relationship between service quality, overall customer satisfaction and
behavioral intentions across public and private banks in India

Journal of Services Research

Michel Laroche: - Consumers perception in their selection of bank

(Concordia University, Montreal, Canada)