TITLE OF THE STUDY

A STUDY ON CONSUMER WITH SPECIAL REFERENCE TO EXPECTATIONS AND

PERCEPTIONS AT HDFC BANK

INTRODUCTION

Banking operations are becoming increasingly customer dictated. The demand for 'banking
super malls' offering one-stop integrated financial services is well on the rise. The ability of
banks to offer clients access to several markets for different classes of financial instruments
has become a valuable competitive edge. Convergence in the industry to cater to the changing
demographic expectations is now more than evident. Banc assurance and other forms of cross
selling and strategic alliances will soon alter the business dynamics of banks and fuel the
process of consolidation for increased scope of business and revenue. The thrust on farm
sector, health sector and services offers several investment linkages. In short, the domestic
economy is an increasing pie which offers extensive economies of scale that only large banks
will be in a position to tap. With the phenomenal increase in the country's population and the
increased demand for banking services; speed, service quality and customer satisfaction are
going to be key differentiators for each bank's future success. Thus it is imperative for banks
to get useful feedback on their actual response time and customer service quality aspects of
retail banking, which in turn will help them take positive steps to maintain a competitive
edge. The working of the customer's mind is a mystery which is difficult to solve and
understanding the nuances of what perception the customer has to attain satisfaction is, a
challenging task. This exercise in the context of the banking industry will give us an insight
into the parameters of customer satisfaction and their measurement. This vital information
will help us to build satisfaction amongst the customers and customer loyalty in the long run
which is an integral part of any business. The customer's requirements must be translated and
quantified into measurable targets. This provides an easy way to monitor improvements, and
deciding upon the attributes that need to be concentrated on in order to improve customer
satisfaction. We can recognize where we need to make changes to create improvements and
determine if these changes, after implemented, have led to increased customer satisfaction

Customer Perception is an important component of an organization’s relationship with their

customers. Customer satisfaction is a mental state which results from the customer’s
comparison of expectations prior to a purchase with performance perception after a purchase.
Strong customer service helps an organization to reach up to customers expectations.
Customer Perception on Service: Customer Service is the service provided in support of a
company’s core products. Customer Service most often includes answering questions, taking
orders, dealing with billing issues, handling complaints, and perhaps scheduling maintenance
or repairs. Customer Service can occur on site, or it can occur over the phone or via the
internet. Many companies operate customer service call centers, often staffed around the
clock. Typically there is no charge for customer service. Quality customer service is essential
to building customer relationships. It should not, however, be confused with the services
provided for sale by a company. Services tend to be more intangible than manufactured
products. There is a growing market for services and increasing dominance of services in
economies worldwide. There are generally two types of customer expectations. The highest
can be termed as desired service: the level of service the customer hopes to receive. The
threshold level of acceptable service which the customers will accept is adequate service. Yet
there is hard evidence that consumers perceive lower quality of service overall and are less
satisfied.

COMPANY PROFILE

HDFC bank ltd provides various financial products and services. It operates in three
segments: Retail Banking, Wholesale Banking, and Treasury. The Retail banking segment
provides various deposit products, including savings Accounts, current accounts, fixed
deposits, and demat accounts. It also offers Auto, personal, commercial vehicle, home, gold,
and educational loans; loans Against securities and property and health care finance Working
capital finance, construction equipment finance, and warehouse Receipt loans, as well as
credit cards, debit cards, depository, investment Advisory, bill payments, and transactional
services. In addition, this segment Sells third party financial products, such as mutual funds
and insurance, as Well as distributes life and general insurance products through its tie-ups
with insurance companies and mutual fund houses. The wholesale banking Segment provides
loans, non-fund facilities, and transaction services to large Corporate, emerging corporate,
small and medium enterprise, supply chain, Public sector

undertaking, central and state government departments, and Institutional customers. It offers
deposit and transaction banking products, Supply chain financing, working capital and term
finance, agricultural loans, and funded non-funded treasury, and foreign exchange products.
This segment’s services include trade services, cash management, and money Market,
custodial, tax collection, and electronic banking. In addition, it provides correspondent bank
services to co-operative banks, private banks, foreign banks, and regional rural banks. The
Treasury Services segment operates primarily in areas, such as foreign exchange, money
market, interest rate trading, and Equities. As of March 31, 2009 HDFC bank had a network
of 1,142 branches And 3,295 automated teller machines in 528 cities in India. The company
was founded in 1994 and is based in Mumbai, India

As of March 31, 2008, the Bank’s distribution network was at 761 Branches and 1977 ATMs
in 327 cities as against 684 branches and 1,605 ATMs in 316 cities as of March 31, 2007.
Against the regulatory approvals for new branches in hand, the Bank expects to further
expand the branch network by around 150 branches by June 30, 2008. During the year, the
Bank stepped up retail customer acquisition with deposit accounts increasing from 6.2
million to 8.7 million and total cards issued (debit and credit cards) increasing from 7 million
to 9.2 million. Whilst credit growth in the banking system slowed down to about 22% for the
year ended 2008-09, the Bank’s net advances grew by 35.1% with retail advances growing
by 38.6% and wholesale advances growing by 30%, implying a higher market share in both
segments.

The transactional banking business also registered healthy growth with cash manage

REVIEW OF LITERATURE

 Riadh Ladhari, Ines Ladhari, Miguel Morales, (2011) The aim of their paper was
to compare perceptions of bank service quality among Tunisian and Canadian
customers, and to determine which dimensions of service quality make the greatest
contribution to overall customer satisfaction and loyalty. Data were collected using
self-administered questionnaires from two convenience samples of bank customers
(250 in Canada and 222 in Tunisia). Service quality was measured using the five
SERVQUAL dimensions of tangibles, reliability, responsiveness, assurance, and
empathy. Data were analyzed using confirmatory factor analysis, ANOVA and linear
regression.

 Bauer , Malike and Falik , (2006) study revealed that the quality of e-

banking portals has a significant impact on the consumers quality perception
in the internet providing banks which serves a promising start for the best
establishment of an effective quality management .The empirical model study
validated a measurement model for web – quality model based on security ,
trust , basic service quality , value , trust ,responsiveness , buying service
quality to achieve the best customer satisfaction.

 Reeti , Sanjay and Malhotra,(2009) investigated about the customers

perceptions about banking services in an emerging economy  for which the
various determinants affecting the customer perception as well as attitude
towards banking services were predicted through study that was conducted on
the respondents taken from Northern part of India .Major findings depicted
that customer perceptions are influenced by the usage of e-banking services
by the kind of account they hold, age , profession , attached high degree of
usefulness to the balance enquiry service among e-banking services .It was also found
that security and truth are the most important factors in affecting their satisfaction
levels and slow transaction problem speed was the most frequent problem faced by
majority of Customers.
 Malhotra, Pooja and Singh, (2010) study examined various factors
affecting the banking services in India .The purpose of the study was to help
in filling the gap in knowledge about Banking Landscape in India. The study
utilized sample of 82 banks of India using the technique of Multiple
Regression to explore the determinants .The study reveled that bankers as well as
society perceive that banking services lag in terms of providing different products and
services.

 Kun-ho Lee, Shakir Ullah, (2011) studied consumer attitude towards Islamic
Banking in Pakistan. The purpose of this paper is to examine the different
motivational factors that lead to customers' Islamic bank selection decision in
Pakistan. The paper presented descriptive statistics and cross-tabulation analysis
based on data collected from 357 customers. – The findings revealed that Islamic
banks' customers highly value Shari'a compliance in their banks and that non-
compliance with Shari'a principles leads to disgruntled customers.

 Sergios Dimitriadis, et al (2011) studied to investigate the possibility of using trust

in two self-service bank channels: internet, and phone banking, to segment potential
users of these channels. Using data from a survey of 762 real bank customers
discriminant analysis is used to test variables differentiating two groups of customers
having, respectively, “high” and “low” trust in internet and phone banking. – Results
showed that the groups of “high” and “low” channel-trustors are different in a number
of attitudinal, behavioral and psychographic criteria. In addition, the two groups react
differently in terms of intention to use internet, and phone banking.

 Sergios Dimitriadis (2011) studied to explore benefits customers expect from a long-
term relationship with their bank and the costs associated with such a relationship; it
further tests these relational benefits and costs as segmentation variables. A
qualitative study based on three focus groups was designed to provide initial input on
different types of expected relational benefits and costs. Then, quantitative data were
collected from a survey of 209 real bank customers. Analysis revealed five types of
expected benefits and two types of costs. Four clusters were formed out of these seven
expected benefits/costs. These clusters are also different on demographic, behavioral
and psychographic variables and present clear and consistent relational profiles.
 Sandy Ng, et al (2011) studied to investigate the effects of relationship benefits on
relationship quality and aspects of service quality, namely technical and functional
quality, and the subsequent influence on word-of-mouth behavior. The paper reports
results from a structural equation model that utilizes data from 591 consumers across
a range of services. The findings highlight the important role of relationship benefits
in driving customer perceptions of technical, functional and relationship quality.
While confidence, social and special treatment benefits drive technical and functional
quality, it is only confidence benefits that drive relationship quality. Furthermore, it is
found that functional and relationship quality drive word-of-mouth behavior.

 Debashis and Mishra (2005) measured customer satisfaction in branch services

provided by public sector banks in northern India. About 1200 customers were
surveyed and it was found out that computerization, accuracy in transactions, attitude
of staff and availability of staff mostly influence customer satisfaction. Least
important factor was promotion of the products and various schemes.

 Mishra and Jain (2007) conducted a study of nationalized and private sector banks to
know the constituent dimensions of customer satisfaction. Two stage factor analyses
technique was used to arrive at the dimensions of customer satisfaction. On analyzing
it was found that vigilance, competence, advancement in services, reliability, vision,
responsiveness, reach, cost effectiveness and efficient process were the constituent
factors of customer satisfaction for nationalized banks, whereas service quality,
reliability, competence, efficient process, customization, ATM facility, vision,
vigilance, simplicity of system and brand image were the essential factors for private
sector banks.

 Mengi (2009) conducted an empirical study to evaluate and compare the service
quality offered to the customers by public and private sector banks of Jammu.
SERVQUAL (service quality) scale was used to determine different dimensions of
service quality and chi-square test was performed to understand the impact of
SERVPERF (service performance) dimensions (tangibility, reliability,
responsiveness, assurance and empathy) on customer satisfaction. Study revealed that
the customers of public sector banks were more satisfied with the service quality
offered as compared to those of private sector banks.
STATEMENT OF THE PROBLEM

The HDFC Bank is one of the private banks which started its operations in the J&K State in
the year 2006 with only one branch in the main city (Srinagar) and today the bank has slowly
and steadily widened its network in the both divisions of J&K state with 19 branches, 15
ATMs and many to be inaugurated soon. The main competitor of HDFC bank in Kashmir
division is J&K bank; therefore the need arises to know what consumers perceive about
HDFC bank.

OBJECTIVES

1) To understand the customers perception on the service delivery of the bank.

2) To know why consumers don’t have account with HDFC bank.
3) To measure and analyze the quality of services provided by the HDFC Banks.
4) To measure the customer satisfaction and perception in analyzing the gap between
expected quality and their perceived quality of banking services

RESEARCH METHODOLOGY

A research methodology involves specific techniques that are adopted in research process to
collect, assemble and evaluate data. It defines those tools that are used to gather relevant
information in a specific research study.

TYPE OF STUDY
Descriptive study and exploratory study

METHOD OF DATA COLLECTION

Primary Data: The primary data was collected by means of a survey. Questionnaire was
prepared and the sample unit was approached to fill up the questionnaire. The filled up
information was later analyzed to obtain the required information.
Secondary Data: In order to have a proper understanding of the sector of Banking, an in
depth study was done from the various books, magazines, journals and articles written on the
subject. Information was also taken from the internet related to industry, company,
competitors,etc.
METHOD OF SAMPLING

Sampling Design:-
The study has used Non- Probability sampling design.
Non- Probability sampling involves deliberate selection of a particular unit of the population
for constituting a sample

Sampling Method:-
The sampling method used in this study is Convenience sampling. Convenience sampling is
a non-probability sampling technique where subjects are selected because of their convenient
accessibility and proximity to the researcher. The subjects are selected just because they are
easiest to recruit for the study and the researcher did not consider selecting subjects that are
representative of the entire population.

Research Design:-

Research design is the plan of action, and the structure of the overall procedure by which we
intend to gain more knowledge of a specific problem or a specific aspect of the subject.

The researcher has made use of DESCRIPTIVE RESEARCH for this study. Descriptive
research studies are those studies which are concerned with describing the characteristics of a
particular individual or group

DATA ANALYSIS PROPOSED

Step1: Formulation of questions and questionnaire.

Step2: Setting clear measurement and priorities.

Step3: Collection of data

Step4: Analyzing the data with suitable statistical model.

Step5: Interpreting the data with suitable interpretation model.

Step6: Concluding the findings and knowledge known with reference to the study

Limitation of the Study

The data from the sample may not reflect the universe; since it is restricted only to the area
Srinagar city and only 100 Respondents. There was also a time limitation. As the topic is
wide, all matters regarding the study could not be analyzed.

At the end I would like to conclude that The Indian banking market is growing at an
astonishing rate, with Assets expected to reach US$1 trillion by 2010. HDFC bank had a
network of 1,142 branches And 3,295 automated teller machines in 528 cities in India.. The
majority of customers are satisfied. But the bank should target on the rest of the customers
who are not satisfied. The customers are aware about the bank’s services but the Bank should
try to create more awareness among people. HDFC Bank should lay more stress on
advertisements, both in print as well as in other media for this purpose. Number of formalities
should reduce, as customer feels irritated with lots of formalities and it will save the time of
customer and Bank also.

CONCLUSION

At the end I would like to conclude that The Indian banking market is growing at an
astonishing rate, with Assets expected to reach US$1 trillion by 2010. HDFC bank had a
network of 1,142 branches And 3,295 automated teller machines in 528 cities in India.. The
majority of customers are satisfied. But the bank should target on the rest of the customers
who are not satisfied. The customers are aware about the bank’s services but the Bank should
try to create more awareness among people. HDFC Bank should lay more stress on
advertisements, both in print as well as in other media for this purpose. Number of formalities
should reduce, as customer feels irritated with lots of formalities and it will save the time of
customer and Bank also.