Banking Services Quality difference between Public and Private Sector Banks - A

customer Perspective
 Customer satisfaction in India

Table of contents

Chapter 1 Introduction 3
1.1 Background of the Study 3
1.2 Rationale Of The Study 5
1.3Research Statement 6
1.4 Aim and objectives 6
1.5 Research Hypotheses 7
1.6 Scope and Limitations 7
1.7 Delimitation of the Study 7
1.8 Context for the research 8

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Chapter 1

Introduction

1.1. Background of the Study:

Today the service sector in the India is regarded as the tertiary sector within the economy

of India. The service sector comprises of a wide range of industries for example, the

banking sector, education sector, tourism sector, telecom sector, wholesale and retail

trade sector, hotels and restaurants sector, public administration sector, railways and

other services.

The service sector is the key contributor to the GDP of the nation. During the past

decade, global attention has been grabbed by the service sector requiring the reformation

in privatization form, regulation restrictions removal and many more. A model for

measurement of service quality that various organizations especially the banking sector

provided have been discovered by Parasuraman et al. (1985). In accordance with this

suggested model the gap among the actual as well as the expected service performance is

found by the gap analysis. Hence, when the expected service quality level is greater than

the actual one, than the organizations are considered to provide low service quality.

Whereas, in contrast to this when the expected service quality level is lower than the

actual one than the organizations are considered to provide high service quality. Initially

this model was developed for measuring the service quality perceptions of the customers

for financial and the banking sector but afterwards advanced to other sectors as well for

example, healthcare, hospitality and telecommunications. In spite of some arguments on

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this model of service quality, the determinants that measures service quality are

considered reliable. These determinants can not only been used in various situations but

various researchers also practiced them. The customer satisfaction is considered a

significant factor for the service organizations that enhances as well as improves the

profitability as well as the performance of the concerned financial organizations. The

Banking sector purely provides the financial services and the satisfaction of the

customers is very important for successfully running the banking business. The level of

the customers satisfaction is varies because of diverse banking services provided to the

customers as well as respective benefits derived by the customers. Various factors are

responsible in the service discrimination for every type of the customers of the banks and

results in the uneven level of satisfaction among the customers. In India, the financial

services are provided by the Private and Public sector banks to different categories

customers. There is a greater level of increase in the offices of the public as well as the

private sector banks. This absolute growth of both the Public as well as the Private sector

banks increases the levels of customer satisfaction for not only retaining the existing

customers but also for attracting the new customers. Various researches have revealed

that because of the services offered by the private banks the customers are more satisfied

and they offer comparative market competitive services for retaining its customers. Some

researchers have considers customer satisfaction, their retention and the service quality

provided to them as the major challenge faced by the banking sector.

Considering the services provided by the public sector banks, much improvement is

needed in the areas of the customer dealing, while the private sector banks need to

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improve their services of insurance as well as loans disbursement. Some other factors for

example, developed infrastructure, convenient office hours, latest technology, well

trained employees as well as convenient branch locations affects the satisfaction level of

the customers. For providing better financial services to the customers, customer

satisfaction is considered crucial in this regard. Private sector banks’ offices growth is

evident that the service quality and customers’ satisfaction are the prime consideration

for the development of the banking business in India. In India, the Public sector banks

are considered capable of not only attracting the new customers but also retaining the

existing customers because of their reputation as well as convenient branch location.

There is need to get opinion of customers about service quality and customers’

satisfaction in banks and identify the areas where improvements are necessary to make

customers more satisfied

1.2. Rationale Of The Study:

The requirements of the customers as well as their life style are changing rapidly.

Moreover, digital transformations for example various industries were making enormous

pressure on any business and its performance in order to provide digital solutions especially

in banking industry to put their best efforts so that to stand out among the competitors

through best marketing strategies.

The banking industry is considered as the most suitable example in terms of service quality

and customer satisfaction with a large number of big, medium and small players in Indian

market and they increasingly every year because of the highest population in this market.

Rajeev Kumar, (2019) stated in financial express news that the Indian customers facing a

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lot of issues regarding customer services, staff behaviour and much more. There is a value

gap between Banks and consumers because they do not able to meet the customer current

needs as well as public and private sector banks has a huge gap. Nowadays, consumers

need most of the services done via online which is a huge gap because there are a lot of

Indian public sector banks who still not adopting new technologies to meet the customers

current requirements. The banks should need to treat their customers the way they treat

their own mother, creating a close, respectful, and genuine relationship.

This research tries to measure the customer satisfaction as well as the service quality of

public and private sector banks according to the customer satisfaction level in different

dimensions. Banks should need to put more focus on the quality of services to build a loyal

relationship with consumers. Banks should need to focus on the digital banking strategies to

provide best services in terms of every financial product and services.

1.3. Research Statement:

Research has been explained as the process that tests the stated assertion and check whether

it has been supported by the evidence or not (Brett, 2007). This research is a comparative

study based on the customer satisfaction and the service quality of public and private banks.

1.4. Aim and objectives

This study aims at investigating the customer satisfaction and the service quality of public

and private banks. The objectives of the study are stated below in detail:

 To identify the customer satisfaction level of public and private sector banks.

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 To identify the service quality level of public and private sector banks.

 Comparing the customer satisfaction and service quality of public and

private sector banks.

1.5. Research Hypotheses:

The hypotheses statements for the study are stated under:

Hypothesis 1

H0 -There is no significant difference in customers’ satisfaction between Public and Private

Banks.

H1 - There is significant difference in customers’ satisfaction between Public and Private

Banks.

Hypothesis II

H0 -There is no significant difference in service quality between public and private banks.

H1 -There is significant difference in service quality between public and private banks.

1.6. Scope and Limitations

This research study will be based on banking sector of Indian nation. This research

mainly focuses on the influence of customer satisfaction and service quality of Indian

Banking sector..

1.7. Delimitation of the Study

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Dimensions of customer satisfaction and service quality were not included in this research.

Focus shall be made to find out the service quality as well as customer satisfaction in public

and private banks. This is considered as a gap for the future studies to be conducted.

1.8. Context for the research

This research will follow the below mentioned structure for conducting this research:

The chapter one of this research will provide thorough introduction of the study. This

section will initially explain the background of the research, these will be followed by the

research aims and objectives that are required to be achieved. Afterwards, the research

questions alongwith the scope and limitations of the study are provided briefly.

Chapter two of this research will provide the previously conducted researches related to the

subject matter along with the theoretical framework and hypotheses of this research project,

related to Bangladesh. In order to facilitate the comprehension of the readers this chapter is

divided into various sub-sections..

Chapter three of this research will mainly focus on ways by which this research is carried

on. It provides the detailed methodology including the population, sample, the data

collection methods, data analysis techniques etc. Lastly it will mention the ethical issues to

be considered while conducting this research.

The fourth chapter of this research provides the findings of this research. It provides the

idea regarding the social media marketing and consumer buying behavior. The responses of

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the individuals will be analyzed in this chapter on the basis of the questionnaire attached in

Annexure A provided at the end of the study.

Lastly, the final chapter of this research will provide the conclusions and recommendations,

on the basis of the findings of this study.

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