chapter ii review of literature -...
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CHAPTER II
REVIEW OF LITERATURE
This chapter reviews different studies with regard to service quality
connected directly and indirectly with the present study. In any field of
study, existing literature constitutes a base for further research. Therefore,
probing into the past research studies was felt necessary for a better
understanding of the direction of the progress in the present investigation.
Therefore, the review of literature is highly useful to design the present
study as it indicates the research gap in the study of service quality in the
new generation private banks. Increasingly organizations are adopting
customer-centric strategies, programs, tools, and technology for efficient
and excellent service quality. They are realizing the need for in-depth and
customer knowledge in order to build close and partnering relationships
with their customers. The study of service quality has attracted the attention
of practitioners and scholars irrespective of countries, be it developed,
developing or least developed. Therefore, studies on these experiments are
also reviewed in this chapter.
Bhaskara, Narasimha Rao and Viswanath (2000)1 conducted a study
with 300 bank customers and 150 bank employees in Bangalore urban
1 Bhaskara, B.G, Narasimha Rao, T.V and Viswanath, N.S (2000). “Service
Quality Management in Indian Banks: Opportunities and Challenges”, Southern
Economist, July, pp.11-15.
24
district with the objective of assessing and evaluating the needs of
customers and the response of the process or the system, to the customer
needs/services. Chi-square and mean difference were used to test the 10
variables such as attitude on responsiveness, professional commitment, job
knowledge, procedures, infrastructure, technology, etc. The study found
that there is significant difference between what is there in practice and
what is theoretically expressed at high significance levels. At zero
probability level, there is no professional commitment, presence and
punctuality in service. The employees perceived to have little knowledge
and skill leading to inaccuracy and there is no competitive efficiency in
service.
Metta Ongkasuwn and Worasri Tantichattanon (2000)2 analyzed five
dimensions of service quality, namely, performance, reliability
serviceability, features and perceived quality. A survey using formal
questionnaire followed by on-site and telephone interview and website
visits is used as research methodology. All thirteen banks in Thailand are
studied and compared using formal questionnaire. It was observed that
31.79 per cent of the respondents are aware of internet banking services in
Thailand. The study suggested that the Bank of Asia has the highest rate
and ranks number one in terms of satisfaction on the five basic inquiries
2 Metta Ongkasuwan and Worasri Tantichattanon (2000). “A Comparative Study
of Internet Banking in Thailand”, www.hot.or.th.com, pp.1-18.
25
service on the internet banking services. It was also suggested that all banks
should provide 24 hours error free internet bank services with quality and
security to ensure high level of performance to their customers.
Howcroft Barry and Durkin Mark (2000)3 in their paper titled
“Reflections on Bank-Customer Interactions in the New Millennium” stated
that the banks approach the new millennium operating in an increasingly
competitive and fragmented marketplace with financially literate
consumers. This competition combined with the prevailing low interest rate
environment means that traditional banks with extensive branch networks
are having their profitability margins squeezed. New technology presents
opportunities for banks to become both more efficient in terms of cost
reduction and more effective in terms of customer profiling and informed
targeted selling. As many groups of customers become more content with
interacting with their bank through remote technological channels, the
implications for bank-customer relationships are important. The paper
further states that the key power of the internet arguably rests in its
interactive capabilities and those relationships are predicated upon
interactively, it seems appropriate to conclude with some key issues for
future electronic banking strategy with particular emphasis on staff-
customer relationships.
3 Howcroft Barry and Durkin Mark (2000). “Reflections on Bank-Customer
Interactions in the New Millennium”, Journal of Financial Service Marketing,
Vol.5, No.1, pp.9-20.
26
Sathya Swaroop Debasish (2001)4 in his paper titled “Service
Quality in Commercial Banks: A Comparative Analysis of Selected Banks
in Delhi” evaluated perception of service quality to customer on basis of
three dimensions; the customer-employee interaction i.e. functional quality,
the service environment i.e. environment quality, and the outcome-service
product i.e. technical quality. The study revealed that foreign banks such as
Citi Bank, HSBC, and Bank of America operating in Delhi provided better
service quality, as compared to private sector banks such as ICICI, HDFC,
Karur Vysya Bank; and public sector banks such as SBI, Corporation Bank,
PNB. Citibank, ICICI Bank and SBI were perceived to deliver better
services in their respective banking sectors. The point of worry was that the
public sector banks, which accounted for over three-fourth of banking
business in the country had failed to adequately satisfy their customers.
Mosad Zineldin (2002)5 in his paper titled “Managing in the Age:
Banking Service Quality and Strategic Positioning” states that banking has
traditionally operated in a relatively stable environment for decades.
However, in a deregulated environment, the banking industry is facing
dramatically aggressive competition. Positioning is an attempt to
distinguish the bank from its competitors along real dimensions in order to
4 Sathya Swaroop Debasish (2001). “Service Quality in Commercial Banks: A
Comparative Analysis of Selected Banks in Delhi”, Indian Journal of Marketing,
September, pp.3-7.
5 Mosad Zineldin (2002). “Managing in the Age: Banking Service Quality and
Strategic Positioning”, Measuring Business Excellence, Vol.6, No.4, pp.38-43.
27
be the most preferred bank for a certain market segment. A key to build a
strong competitive position is through management, IT and product/service
quality and differentiation. Evaluation of the relationship between quality
and positioning requires an understanding and examination of the elements
of service quality relative to the operations strategy.
Koushiki Choudhary, et al. (2002)6 in their paper titled “Relationship
Marketing Strategies and Customer Perceived Service Quality: A Study of
Indian Banks” stated that one of the determinants of the success of the
relationship marketing strategies is how the customers perceive service
quality. In India, with the onset of financial deregulation, banks are
functioning increasingly under competitive pressure and it is imperative for
banks to focus on developing long-lasting relationship with their customers.
The study explores what kind of relationship and strategies is to be followed
by the Indian banks in today‟s competitive environment and the service
quality perceived by the customers.
Deepak Sirdeshmukh, et al. (2002)7 have developed a framework for
understanding the behaviour and practices of service providers that creates
customer trust and mechanisms that convert such trust into value and
6 Koushiki Choudhary, Avinandhan Mukherjee and Ashish Baner (2002).
Relationship Marketing Strategies & Customer Perceived Service Quality,
Banking Reforms in India, New Delhi, Tata McGraw Hill Limited.
7 Deepak Sirdeshmukh, et al. (2002). “Consumer Trust, Value and Loyalty in
Relational Exchanges”, Journal of Marketing, Vol.66, January, pp.15-37.
28
loyalty in relational exchanges. The findings of the study reveal that
conversion of trust to loyalty involves complex, multiple-loop process that
require an understanding of how specific trust worthiness dimensions can
build greater customer trust, how increased customer trust can enhance
value for the customers and how value translates into loyalty. Although
there are significant pay offs from building customer trust in relational
exchanges, realizing them is neither straightforward nor inevitable.
Feinberg, Hokama and Kadam (2002)8 stated that banks and
financial institutions depend upon telephone call centers to meet the needs
of changing and ever demanding customers for 24×7 access. Call centers
serve as a source of service recovery, added value, market intelligence, and
strategic advantage. This study uses data available from the Purdue
University Call Center Benchmark database to determine the critical
relationships between call center metrics and caller satisfaction. None of the
key factors was found to be determinant of customer satisfaction in call
centers and in other industry groups was found to be significant in bank call
centers. It raises questions about how call centers are managed and serve to
highlight the very low customer satisfaction that customers have with their
banking call center experience.
8 Feinberg, R.A, Hokama and Kadam, R (2002). “Operational Determinants of
Caller Satisfaction in the Banking/Financial Services Call Center”, The
International Journal of Bank Marketing, Vol.20, pp.174-180.
29
Ivana Adamson, Kok-Mun Chan and Donna Handford (2003),9 in
their study titled “Relationship Marketing: Customer Commitment and
Trust as a Strategy for Smaller Hong Kong Corporate Banking Sector,”
found that the Hong Kong banks‟ marketing strategy and a long-term
orientation were positively correlated with customer commitment and trust;
communications and relational norms were positively correlated with trust;
relationship benefits were positively correlated with customer commitment;
and the banks‟ reputation was negatively correlated with trust and
commitment. They suggested that to continue to be successful in the
corporate sector, smaller banks must invest in the long-term relationship
marketing infrastructures to support a customer-oriented approach. To
enhance the corporate customers‟ confidence, the banks must develop
parallel communication channels with their customers, show flexibility in
their dealings and maximize mutual relationship benefits by minimizing
drastic recovery actions.
Anthony, et al. (2003)10
conducted a study to know defection and
focused on repurchase decision that involves an information-based
evaluation of alternatives to the incumbent. Besides, an attempt was also
9 Ivana Adamson, Kok-Mun Chan and Donna Handford (2003). “Relationship
Marketing: Customer Commitment and Trust as a Strategy for Smaller Hong
Kong Corporate Banking Sector”, International Journal of Bank Marketing,
Vol.21, Nos.6 & 7, pp.347-358.
10 Anthony J. Capraro, et al. (2003). “Factors Influencing the Likelihood of
Customer Defection: The Role of Consumer Knowledge”, Journal of the
Academy of Marketing Science, Vol.31, pp.164-175.
30
made to test the inter-relationship between customer knowledge and
customer satisfaction. The study suggested that level of objective and
subjective knowledge about alternatives has a direct effect on likelihood of
defection above and beyond satisfaction level. Therefore, the managers can
gain control over customer defection through actions aimed at influencing
how much the customers know about alternative products.
Suresh Chander, et al. (2003)11
studied the critical factors of
customer perceived service quality in banks of a developing economy, India
and also compared and contrasted the three groups of banks in India with
respect to the service quality factors from the perspective of the customers.
The findings of the study reveal that there seems to be a great amount of
variation with respect to the level of service quality offered by the three
groups of banks. Customers in developing economies seem to keep the
“technological factors” of services such as core service and systematization
of the service delivery as the yardstick in differentiating good/bad service
while the “human factors” seem to play a lesser role in discriminating the
three groups of banks. The service quality indices with respect to the three
groups and the Indian banking industry as whole, offer interesting
information on the level of service quality delivered by banks in India.
11
Suresh Chander, G.S, Chandrasekharan, Rajendran, R.N and Anantharaman
(2003). “Customer Perceptions of Service Quality in the Banking Sector of a
Developing Economy: A Critical Analysis”, International Journal of Bank
Marketing, Vol.21, No.5, pp.233-242.
31
Llore´ns Montes (2003)12
conducted a study titled “Quality
Management in Banking Services: An Approach to Employee and Customer
Perceptions”. The data were collected at three different stages namely,
approaching the employees to be interviewed, holding the interviews
with a group of employees, which allowed to determine their service quality
perceptions, and developing a framework that covers all those determinants,
as well as the relationships existing between them. The research was
performed over 80 bank branches that were sent a questionnaire to be
returned in a sealed envelope. Forty-six interviews were performed. Twenty
of the interviews were individuals, while the rest took place in groups of two to
four people. The findings of the study showed that employees consider factors
determining the climate as being relatively important. A service-intensive
environment may present more obstacles than other environments. These
factors determining the climate do not only influence employees‟ productivity,
but also play a major role in determining employees‟ and customers‟ attitudes,
and their perceptions with regard to the service quality provided.
Naceur Jabnoun and Hussein A. Hassan Al-Tamimi (2003)13
made
an attempt to measure the service quality of the commercial banks in United
12
Llore´ns Montes, F.J (2003). “Quality Management in Banking Services: An
Approach to Employee and Customer Perceptions”, Total Quality Management,
Vol.14, No.3, pp.305-323.
13 Naceur Jabnoun and Hussein A. Hassan Al-Tamimi (2003). “Measuring
Perceived Service Quality at UAE Commercial Banks”, International Journal
of Quality & Reliability Management, Vol.20, No.4, pp.458-472.
32
Arab Emirates. The study was conducted in the three largest cities of UAE,
namely, Abu Dhabi, Dubai and Sharjah. They have developed an
instrument which includes thirty items that belong to the five dimensions of
SERVQUAL. In order to collect primary data, questionnaires were
distributed among 800 bank customers and 480 responses only were
received. The findings of the study revealed that respondents valued all the
dimensions, but seemed to value the dimension that grouped reliability and
assurance more than tangibles and empathy. While tangibles and empathy
are important, they do not make the essence of overall service quality at
UAE commercial banks.
Purwar (2004)14
in their paper titled “Technology in Banks” stated
that bank has two types of customers, one who expects products and
services with world class and on the other hand there are customers who are
not comfortable with new technology. He also stated that modern
technology has to be introduced in rural areas because rural population is no
less techno-savvy than urban people. But he worried about losing of human
touch in technology implementation. Further he stated that information
technology reduces the cost of the transaction and it gives comfort to the
customers. He suggested that both delivery channels were to be given to the
customers. He says that “speed with social interaction” is need of the hour.
14
Purwar, A.K (2004). “Technology in Banks”, Professional Banker, August,
pp.14-21.
33
Charalambos Spathis, Eugenia Petridou and Niki Glaveli (2004)15
conducted a study to discuss the service quality of Greek banks on the basis
of their customers' perceptions, and to analyze how gender differences
affect customers' perceptions of service quality dimensions. The results of
an empirical study of 1260 customers of Greek banks supported the
hypothesis that gender affects service quality perceptions and the relative
importance attached to various banking service quality dimensions. This
study provides important information for bank managers to use in
developing operational, human resource, and marketing strategies, and in
targeting those strategies in terms of gender differences in quality
perceptions among their customers.
Upinder Dhar, Santhosh Dhar and Abhinav Jain (2004)16
studied
different service quality factors of the private and public sector commercial
banks. They have selected 150 respondents and used correlation, factor
analysis and Z-test. The findings of the study revealed that competence,
tangibility and record maintenance seem to be the typical factors of private
sector commercial banks, because these three factors have been found to be
common in terms of the perception of employees and customers of private
15
Charalambos Spathis, Eugenia Petridou and Niki Glaveli (2004). “Managing
Service Quality in Banks: Customers‟ Generic Effects,” Managing Service
Quality, Vol.14, No.1, pp.90-102.
16 Upinder Dhar, Santhosh Dhar and Abhinav Jain (2004). “Service with a
Difference: A Comparative Analysis of Private and Public Sector Banks”, PJMR,
April-October, pp.17-43.
34
sector commercial banks. Similarly, tangibility, reliability and access seem
to be the typical factors of public sector commercial banks, because these
factors are found to be common in terms of the perception of employees
and customers of public sector commercial banks.
Arasli Huseyin, Katircioglu Sailh Turan and Mehtap-Smadi Salim
(2005)17
conducted a study to analyze and compare service quality in the
commercial banking sector of a small island, Cyprus and to investigate the
relationship between overall bank customer satisfaction in the Turkish and
Greek-speaking areas of Cyprus. A total of 268 commercial bank customers
responded to a Greek and Turkish translated version of the SERVQUAL
instrument. After descriptive and factor analysis, multivariate regression
was used to estimate the impact of service quality dimensions on overall
customer satisfaction and word of mouth. The responsiveness dimension
failed to load and thus the SERVQUAL scale proved to be of a four-
dimensional structure in this study. The findings of the study revealed that
the expectations of bank customers in both areas were not met and that the
largest gap was found in the empathy dimension. The assurance dimension
had the largest influence on customer satisfaction, and the overall
satisfaction of bank customers in both areas of Cyprus had a positive effect
on their word-of-mouth.
17
Arasli Huseyin, Katircioglu Sailh Turan and Mehtap-Smadi Salim (2005).
”A Comparison of Service Quality in the Banking Industry”, International
Journal of Bank Marketing, Vol.23, No.7, pp.508-526.
35
Bhat Mushtaq (2005),18
in his paper titled “Service Quality
Perceptions in Banks: A Comparative Analysis” stated that in delivering
higher levels of service, quality is the strategy that is increasingly offered as
a key to service providers‟ efforts to position themselves more effectively in
the marketplace. Almost all banks perform the same functions. Therefore,
customer takes into account the relative efficiency while choosing a
particular bank. Moreover, banks carry on business with public money and,
therefore, customers expect better services from them. Under such
circumstances, customers' decisions to patronize one and not the other are
based on quality service offered to them. Firms, therefore, prosper or
decline, depending upon the quality of service they provide to their
customers. Because of this widespread belief, service organizations have
placed service quality at the top of the list of strategic constructs. In view of
its strategic importance, an attempt was made to make a comparative study
of service quality perceptions in respect of banks. The results of the study
showed that customers perceive that service quality of all banks is below
their expectations, and suggested heavy investment on tangibility and
improvement in other dimensions of service quality.
18
Bhat Mushtaq (2005). “Service Quality Perceptions in Banks: A Comparative
Analysis”, Vision, Vol.9, No.1, January-March, pp.11-20.
36
Mukherjee Avinandan and Nath Prithwiraj (2005)19
made an attempt
to propose and empirically assess three comparative approaches to
measuring service quality namely modified gap model, TOPSIS and loss
function. The empirical evidence is provided by large sample customer data
on the service quality for leading Indian commercial banks. The service
quality evaluations obtained from these three distinct methods are compared
and tested for their mutual agreement. The findings of the study showed
that the rankings obtained from different methods are statistically in
agreement, suggesting that the alternative approaches can provide equally
good measurement of service quality. The findings of the study revealed
that a single measure of overall service quality based on gap model is over-
simplistic. It would be more useful to explore a richer profile of customer
service quality provided by different measurement approaches. The study
offers managers with a framework of service quality improvement that
measures service quality gaps, selects an optimal combination of attribute
levels to deliver customer satisfaction, and focuses on reducing the future
loss caused by poor quality.
19
Mukherjee Avinandan and Nath Prithwiraj (2005). “An Empirical Assessment
of Comparative Approaches to Service Quality Measurement”, Journal of
Services Marketing, Vol.19, No.3, pp.174-184.
37
Hüseyin Salih and Salime Mehtap (2005)20
analyzed service quality
and customer satisfaction in the banking industry of North Cyprus. 260
customers of various retail banks in the TRNC responded to a Turkish
translated version of the SERVQUAL instrument. The findings of the study
revealed that the expectations of bank customers in the TRNC were not
met. The largest gap between expectations and perceptions was found in the
assurance dimension. Factor analysis revealed that the SERVQUAL scale
proved to be of a five dimensional structure in this study. The overall
satisfaction of Turkish Cypriot Bank customers was mainly influenced by
the assurance and responsiveness dimensions of the scale. Thus, Turkish
Cypriots expect their banks to portray a sense of safety in transactions and
confidence in the customer regarding the way they carry out their activities.
Bank customers also expect employees to be competent, courteous, to
provide prompt service and to be always willing to help the customer.
Additionally, overall satisfaction of bank customers seemed to have a
statistically significant and positive effect on their word of mouth.
20
Hüseyin Salih and Salime Mehtap (2005). Customer Perceptions of Bank
Service Quality in a Developing Country: Some Evidence from the Turkish
Republic of Northern Cyprus, Thesis Submitted to SMADI Eastern Mediterranean
University, TRNC.
38
Al-Hawari Mohammed, Hartley Nicole and Ward Tony (2005)21
conducted a study titled “Measuring Banks' Automated Service Quality: A
Confirmatory Factor Analysis Approach.” They stated that automated
service quality has been recognized as the factor which determines the
success of electronic commerce. The models currently available to measure
automated service quality are limited in their focus, encompassing only one
electronic channel, thereby ignoring attributes of the other automated
service channels. As such, this study strove to develop a comprehensive
model of banking automated service quality taking into consideration the
unique attributes of each delivery channel and other dimensions that have a
potential influence on quality issues. The proposed model was empirically
tested for uni-dimensionality, reliability, and validity using confirmatory
factor analysis.
Joshina and Moli P. Koshi (2005)22
in their paper titled
“Expectations and Perceptions of Service Quality in Old and New
Generation Banks: A Study of Select Banks in the South Canara Region”
showed that service marketing was different from goods marketing because
of inherent differences in service as compared to goods. The service was
21
Al-Hawari Mohammed, Hartley Nicole and Ward Tony (2005). “Measuring
Banks' Automated Service Quality: A Confirmatory Factor Analysis Approach”,
Marketing Bulletin, Vol.16, May, pp.1-19.
22 Joshina, A.J and Moli P. Koshi (2005). “Expectations and Perceptions of
Service Quality in Old and New Generation Banks: A Study of Select Banks in
the South Canara Region”, Indian Journal of Marketing, Vol.35, No.9,
September, pp. 6-11.
39
intangible, heterogeneous, production and consumption took place
simultaneously and it was perishable. The results showed the challenges
faced by the service business had given rise to the need for new concepts
and approaches for marketing and managing service businesses. New
generation banks like ICICI Bank and UTI Bank exceeded expectations of
service quality in dimensions of reliability, empathy and price. In case of
other dimensions like tangibility, responsiveness and assurance, there was
negative gap in perception and expectations but it was much smaller in new
generation banks than old generation banks.
Hassan Al-Tamimi, Hussein, A and Jabnoun Naceur (2006)23
in their
paper “Service Quality & Bank Performance: A Comparison of the UAE
National Foreign Banks” compared service quality and bank performance
between national and foreign commercial banks in the UAE. This paper
compared the important dimensions of the instrument between two sets of
banks. Bank performance is measured using ROA and ROE. ANOVA is
used to compare service quality and its dimensions between national and
foreign banks. The financial performance is compared using the Mann
Whitney non-parametric test. The results of the two comparisons are
discussed and conclusions are drawn that the foreign banks scored higher
23
Hassan Al-Tamimi, Hussein, A and Jabnoun Naceur (2006). “Service Quality &
Bank Performance: A Comparison of the UAE National Foreign Banks”, Finance
India, Vol.20, No.1, March, pp.181-197.
40
than national banks in terms of human skills and similarly foreign banks
have performed better than national banks in terms of ROE.
Robert Hinson, Amidu Mohammed and Roberta Mensah (2006)24
investigated service quality perception of three top banks in Ghana namely
Barclays Bank, Standard Chartered Bank and Ghana Commercial Bank.
The purpose of the study is to compare service quality across these three
banks and to determine the most important factors contributing to service
quality. The findings of the study revealed that all the banks selected differ
on the service quality dimensions. Barclays Bank provides better services in
terms of the level of service quality provided to client than the Standard
Chartered Bank and Ghana Commercial Bank. The study also reveals that
the locally owned bank Ghana Commercial Bank provides social services
rather than the multinational banks. Interestingly, the study reveals that
clients‟ expectations on the entire service dimension have not been met by
the Ghanaian banks. The study revealed that all the service quality
dimensions contributed significantly to the prediction of service quality in
Ghana with human element of service quality being highly predictive of
perceived service quality. Tangibility is the least predictive of perceived
service quality. The findings show that there is room for service quality
24
Robert Hinson, Amidu Mohammed and Roberta Mensah (2006). “Determinants
of Ghanaian Bank Service Quality in a Universal Banking Dispensation”, Banks
and Bank Systems, Vol.1, No.2, pp.69-91.
41
improvement in Ghana‟s banking industry. Recommendations were
provided in the main text. The authors conclude this study by saying that in
as much as measuring service quality is important, service managers should
endeavour not only to measure service quality but to take steps to manage
and improve service quality. Additionally, managers must also find and
manage factors which may be related to service quality and which
ultimately affect customer satisfaction. This may lead to service managers
spending relatively more on increasing customer satisfaction, so in turn
increasing customer‟s intention to purchase the service.
Mujahid Hilal (2006)25
carried out a study using the SERVQUAL
instrument and measured the service quality of Sri Lankan commercial
banks which consisted mainly of government owned banks: People‟s
Bank and Bank of Ceylon, private owned banks: Commercial Bank and
Hatton National Bank and the Foreign owned bank: HSBC. The
objectives of the study are to point out factors which require managerial
attention and to compare the service quality of commercial banks. In a
random sample of 650 respondents, questionnaires were issued and the
researcher collected only 260 which is 40% response rate. Out of 260
questionnaires, eight were rejected for the measurement of service quality
and nine questionnaires were rejected for the model proving due to wrong
25
Mujahid Hilal, M.I (2006). “Service Quality in Sri Lankan Commercial
Banks”, Osmania Journal of Management, pp.1-6.
42
in filling. The findings of the study revealed that People‟s Bank has lesser
service quality gap when compared with the other commercial banks.
Customers of HSBC expect more from the bank and their perception is also
high when compared with other rest of four banks.
Srinivasa Katuri and Monica Lam (2007)26
reported that a credit
union serves a unique group of customers who may be in the same
profession, have the same employer, or simply in the same regional
location. The marketing problem is how to switch bank customers from
branches to internet for the main reason of reducing transaction costs. They
carried out an on-site survey in different branches to gather the opinion of
customers who rely solely on branches for banking transactions. This study
provides a pioneer internet banking survey in the context of credit unions.
The results of the study showed different internet banking facilitators for
customers with and without internet bank accounts. For customers with
internet bank accounts, application security is the most important facilitator
variable for them to continue its use in the future; while promises for
continuous improvement can be a prohibitive variable. In order to
encourage customers without internet bank accounts to adopt internet
banking, the management should focus on strengthening the variables of
bank diversified service, bank responsiveness, bank image, and extra online
26
Srinivasa Katuri and Monica Lam (2007). “Switching Customers from
Branches to Internet: A Credit Union‟s Journey”, Journal of Financial Services
Marketing, Vol.12, p.169.
43
instruction and feedback for complicate internet transactions; and reducing
the negative effect of web entertainment. They found that the variables of
proficiency in using computers, application security, and bank image have
opposite effects on customers with and without internet bank accounts.
Dick Astrid (2007)27
in his paper titled “Market Size, Service Quality,
and Competition in Banking” finds that the nature of competition among
banks across markets is strikingly similar. First, markets remain similarly
concentrated regardless of size. Second, the number of dominant banks is
roughly constant across markets of different size; it is the number of fringe
banks that increases with market size. Third, service quality increases in
larger markets and is higher for dominant banks. He suggested that banks
should use fixed-cost quality investments to capture the additional demand
when market size grows, thereby raising barriers to entry.
Choudhury Koushiki (2007)28
made an attempt to explore the
dimensions of customer perceived service quality in the context of the
Indian retail banking industry. Drawn from customers‟ perceptions about
service quality as well as the bank marketing and service quality literature, a
set of service quality parameters was devised. Using factor analysis, these
parameters have been employed in the context of four of the largest banks
27
Dick Astrid, A (2007). “Market Size, Service Quality, and Competition in
Banking", Journal of Money, Credit & Banking, Vol.39, No.1, February, pp.49-81.
28 Choudhury Koushiki (2007). “Service Quality Dimensionality: A Study of
Indian Banking Sector”, Journal of Asia-Pacific Business, Vol.8, No.4, pp.21-38.
44
in India to distinguish the underlying dimensions of service quality. The
results of the study revealed that customers distinguish four dimensions of
service quality in the case of the retail banking industry in India namely,
attitude, competence, tangibles and convenience.
Ashutosh K. Singh and Shiv K. Tripathi (2007)29
carried out a
research to describe the responses of the customers and banking executives
of the private sector banks on the basis of a scheduled questionnaire.
A sample of 3 private sector banks was selected in two major cities
Lucknow and Delhi. The banks covered were ICICI, IDBI and Centurion
Bank of Punjab. Out of the banks selected, overall 10 responses each of the
customers and executives for each bank have been collected. Thus, the
sample comprises responses of 30 customers and 30 executives of private
sector banks. The questionnaire was administered to the customers who
were present at the banks counters and similarly the responses of the
executives were collected from the same banks. The analysis reveals that
the difference between the customers‟ expectations and management
perception of customers‟ expectations exists on quality parameters like
responsiveness, competence, product range and security. The study
provides an insight into the perceptional pattern of customers and
29
Ashutosh K. Singh and Shiv K. Tripathi (2007). “Perceptual Difference of
Quality in Banking Services: A Study on Indian Private Sector Banks”, Indian
Management Studies Journal, No.4, pp.1-14.
45
executives of private sector banks and may be further extended to determine
the causes of these existing gaps with larger sample size.
Okan Veli Şafakli (2007)30
conducted a study to measure the service
quality of commercial banks towards SMEs in Northern Cyprus using
SERVQUAL model developed by Parasuraman, Zeithaml and Berry. The
research was conducted during the period of April-May 2006. By applying
convenience sampling, 227 owners and/or managers of SMEs were
selected. The findings of the study revealed that majority of respondents as
owners and/or managers of SMEs have intellectual capacity being
either lyceum or university graduates and have their sectoral preferences
focused on “trade-tourism” and “business and personal services”. When
quality dimensions are considered, the largest discrepancy between
expectations and perceptions of SMEs was in terms of the “empathy”
dimension. In other words, perceived quality is less than satisfactory and a
service quality gap materializes. Furthermore, highest and lowest relative
importance assigned to quality dimensions belongs to “reliability” and
“empathy” respectively. It was pointed out that even though SERVQUAL
score can theoretically reach up to -6, the scores found as less than -1
showed that commercial banks can easily fill the gap and meet service
expectations of SMEs by only increasing their customer orientation.
30
Okan Veli Şafakli (2007). “Measuring Service Quality of Commercial Banks
towards SMEs in Northern Cyprus”, Journal of Yasar University, Vol.2, No.8,
pp.827-839.
46
Wong David, Rexha Nexhmi and Phau Ian (2008)31
in their paper re-
examined the role of traditional service quality in an e-banking environment
by providing a review of how traditional service quality perceptions have
evolved through the current and continuing stream of change in banking
technology. Data were collected from a mail survey sent out to a
commercially purchased mailing list of 2500 business names and addresses.
The overall usable response rate was 30.60 per cent. Quadrant analysis was
employed on the service quality dimensions from the SERVQUAL scale.
Large discrepancies were found between customer expectations and their
perceived performance of traditional banking services. Quadrant analysis
produced specific recommendations on how banks should prioritize the
allocation of their resources to maintain high perceived service quality in
their human interactions.
Muslim Amin and Zaidi Isa (2008)32
examined the relationship
between service quality perception and customers‟ satisfaction in Malaysian
Islamic banking using the SEM approach. This model starts with
SERVQUAL measurement scales consisting of six dimensions namely,
tangibles, reliability, responsiveness, assurance, empathy, and compliance.
31
Wong David, H, Rexha Nexhmi and Phau Ian (2008). “Re-examining
Traditional Service Quality in an E-banking Era”, International Journal of Bank
Marketing, Vol.26, No.7, pp.526-545.
32 Muslim Amin and Zaidi Isa (2008). “An Examination of the Relationship
between Service Quality Perception and Customer Satisfaction”, International
Journal of Islamic and Middle Eastern Finance and Management, Vol.1, No.3,
pp.191-209.
47
Data were collected from personal interviews using questionnaires as a
measurement tool, conducted in eight states in Peninsula Malaysia during
April to July 2007. The questionnaires were distributed in two types. First,
for the fully-fledged Islamic banking, the questionnaires were given to bank
managers and requested them to distribute the questionnaires to their
clients. Second, for dual-banking, the field workers visited and distributed
the questionnaires by hand to the customers outside the bank counters. This
was done in eight different states where the banks were selected. A total of
660 questionnaires were distributed and 440 were returned. The sample
characteristic includes 214 customers of fully-fledged Islamic banks and
226 customers of the dual-banking system. The findings of the study
showed that the proportion of Malaysian Muslims‟ awareness of the Islamic
banking products and services were high compared to non-Muslim
customers. The majority of the Islamic banking customers were satisfied
with the overall service quality provided by their banks. They suggested
that the standard model of Islamic banking service quality dimensions
should consist of the six dimensions and good determinants of satisfaction.
Garima Mathur, et al. (2008)33
analyzed the service quality
perceptions of corporates towards banks; to compare the service quality of
public and private banks; and to offer suggestions to improve the quality of
33
Garima Mathur, Anindita Chakraborty, Silky Vigg and Umesh Holani (2008).
“Service Quality Perception of Corporate towards Public and Private Banks”,
Journal of Marketing and Communication, Vol.4, No.1, May-August, pp.37-47.
48
service offered to the corporate. To fulfill the objective, 90 corporates were
taken on non-probability judgment sampling basis. For data collection, a
self-designed questionnaire was administered to the respondents. The result
showed that there was a significant difference between service quality
perception of corporate customer towards private and public banks. The
study revealed that there is overall significant difference as far as service
quality perception of corporate towards private and public banks is
concerned. This study showed that of the overall seven factors, four factors
viz. banking facility, bank policy, satisfaction with services and other
facilities indicated no significant difference between private and public
banks. Three out of seven i.e. customized banking solutions, customer
satisfaction and online banking solutions factors showed significant
difference due to which overall significant difference was there in the study.
Vanniarajan and Nainamohamed (2008)34
conducted a study titled
“Mapping Service Quality in the Indian Banking Industry” among the
selected public and private bank customers in Madurai City. The study
suggests a new approach to the exploratory and evaluative research of
service quality dimensions by employing correspondence analysis. The
study concluded that the correspondence analysis can be used effectively in
evaluating service quality and displaying the banks according to their
34
Vanniarajan, T and Nainamohamed, K (2008). “Mapping Service Quality in the
Indian Banking Industry”, Journal of Marketing & Communication, Vol.4, No.1,
May-June, pp.23-36.
49
service quality dimensions. Accordingly, it fields some strategic options for
banks. These are to separate themselves from competitors by providing
differentiated service quality or to associate themselves with traditional
bank attributes or to move close to the cluster of attributes about the origin.
Mamta Brahmbhatt and Dharmendra Panelia (2008)35
made an
attempt to comparatively examine and measure the service quality and
customer satisfaction among private sector, public sector and foreign banks
and to offer suggestion based on results of the study. A stratified simple
random sampling procedure was used on a sample of 246 respondents. The
sample of 246 was divided equally among three types of banks i.e. 82
respondents for each strata. The population of this study was customers of
retail banks of Ahmedabad and Gandhinagar. The primary data were
collected with the help of questionnaire. Factor analysis and reliability
testing were employed to identify service quality attributes. The findings of
the study showed that service quality is at the root of customer satisfaction.
The results of this study provide evidence that the SERVQUAL dimensions
are a useful tool to predict overall satisfaction. The study suggested that
banks need to improve those employee-related attributes of service quality
since they are the main sources of the competitive advantage.
35
Mamta Brahmbhatt and Dharmendra Panelia (2008). “An Assessment of
Service Quality in Banks”, Global Management Review, Vol.2, No.4, August,
pp.37-41.
50
Vu Thi My Chinh and Nguyen Viet Anh (2008)36
examined the
extent to which a local bank in Vietnam is practicing service quality based
on the assessment of service quality gap perceived by the bank customers.
The primary data were collected through a point-of-sale self-administered
questionnaire survey with the sample size of 1000 with the help of the bank
staff at all branches of the bank in Vietnam. Convenience sampling was
applied. In the scope of the main survey, 1000 questionnaires were
distributed in all bank branches nationwide. But 284 questionnaires were
collected out of the total number of questionnaires distributed. Out of 284
questionnaires returned, 268 were considered to be valid and usable. The
invalid ones were caused by the failure to answer all the questions required.
The findings of the study revealed that the majority of respondents were
quite satisfied with what they perceived from the bank though the gaps
between customers‟ expectations and customers‟ perceptions towards
service quality which the bank was offering. It was found that there was an
association between gender and frequency level of bank visits of
respondents. This study also found that P-E gaps of different widths existed
across all five service quality dimensions.
36
Vu Thi My Chinh and Nguyen Viet Anh (2008). “Measuring Customer Satisfaction Based on Service Quality Gap at a Local Bank in Vietnam”, Journal of International Business Research, Vol.7, No.3, pp.27-52.
51
Robert Ankomah Opoku, et al. (2008)37
explored the relationship
between employee status and perceptions of internal marketing; the
relationship between employees and management, and customers on
perceptions of service quality; and employee perception of internal
marketing and its impact on perceptions of service quality. In order to
ascertain deeper understanding into the present status of entire
organizations; generate novel insights and consequently help develop future
hypotheses, a case study approach was used. A top bank in Ghana namely,
Ghana Commercial Bank Limited, was selected as the setting. Ghana
Commercial Bank is the largest indigenous bank with 135 branches
nationwide. The results of the study showed that internal customer approach
to internal marketing appears plausible and encouraging. While the results
of the data analysis revealed that internal marketing affects service quality,
the internal marketing items were created via a review of literature and
reliability analysis fails to demonstrate strong dimensions.
Sanayei Ali, Moeini and Shafiei (2008)38
examined the nature of
relationships between service quality and customer satisfaction and loyalty
37
Robert Ankomah Opoku, Nana Atuobi-Yiadom, Cathryn Serwaah Chong and
Russell Abratt (2008). “The Impact of Internal Marketing on the Perception of
Service Quality in Retail Banking: A Ghanaian Case”, Journal of Financial
Services Marketing, Vol.13, No.4, November, pp.317-329.
38 Sanayei Ali, Moeini, H and Shafiei, M (2008). “Relationship between Service
Quality, Customer Satisfaction & Customer Loyalty in Shiraz Banking System”,
Journal of International Marketing & Marketing Research, Vol.33, No.1,
February, pp.31-44.
52
in Iranian banking system. SERVQUAL scale was used to collect research
data about service quality. The findings of the study showed that service
quality is at the root of customer satisfaction and is linked to such
behavioural outcomes as customer loyalty. The findings also showed that
tangibles, reliability and empathy are significant predictors of customer
satisfaction and responsiveness and reliability are significant predictors of
customer loyalty. They concluded that the ultimate success of any service
quality program implemented by a bank can only be obtained by creation
and retention of satisfied customers. The role of customer-contact personnel
in the attainment of these goals is of paramount importance. Therefore, in
their efforts to deliver high quality services to their customers, banks should
not ignore the specific needs of their employees, notably their customer-
contact employees.
Usha Lenka, Damodar Suar and Pratap K.J. Mohapatra (2009)39
examined whether the service quality of Indian commercial banks increases
customer satisfaction that fosters customer loyalty. Data were collected
from 315 valued customers of scheduled commercial banks in Orissa. A
questionnaire elicited information on the socio-demographic variables along
with human, technical, and tangible aspects of service quality, customer
satisfaction, and loyalty. The findings of the study revealed that improved
39
Usha Lenka, Damodar Suar and Pratap K.J. Mohapatra (2009). “Service
Quality, Customer Satisfaction and Customer Loyalty in Indian Commercial
Banks”, The Journal of Entrepreneurship, Vol.18, No.1, pp.47-64.
53
human, technical and tangible aspects of service quality increase customer
satisfaction. The findings of the study showed that human aspects of service
quality were more potently found to influence customer satisfaction
compared to technical and tangible aspects. The study suggested that better
human, technical and tangible aspects of service quality of the bank
branches will increase customer satisfaction.
Pal Manabendra and Choudhury Koushiki (2009),40
in their paper
titled “Exploring the Dimensionality of Service Quality: An Application of
TOPSIS in the Indian Banking Industry,” stated that the Indian banking
industry is going through turbulent times. With the lowering of entry
barriers and blurring product lines of banks and non-banks since the
financial sector reforms, banks are functioning increasingly under
competitive pressures. Hence, it is imperative that banks maintain a loyal
customer-base. A methodological innovation in this paper has been in the
use of TOPSIS in the field of customer-perceived service quality. TOPSIS
has been used to evaluate and rank the relative performance of banks across
service quality dimensions. The authors suggest that customers distinguish
four dimensions of service quality in the case of the retail banking industry
in India, namely, customer-orientedness, competence, tangibles and
40
Pal Manabendra, N and Choudhury Koushiki (2009). “Exploring the
Dimensionality of Service Quality: An Application of TOPSIS in the Indian
Banking Industry”, Asia-Pacific Journal of Operational Research, Vol.26, No.1,
February, pp.115-123.
54
convenience. Identifying the underlying dimensions of the service quality
construct and evaluating the performance of the banks across these factors
is the first step in the definition and hence provision of quality service in the
Indian retail banking industry.
Hazra Sandip Ghosh and Srivastava Kailash (2009)41
carried out a
study to examine the relationship of service quality with customer loyalty,
commitment and trust from the customer's perspective in the Indian banking
sector. Data were collected from 300 customers of public and private sector
banks using structured interview schedules. The findings of the study
showed that dimensions of service quality such as assurance, empathy,
reliability and tangibles significantly predict customer trust and
commitment. The results also indicate that service quality is positively
associated with customer loyalty. Private bank customers are more
committed and loyal as they receive better quality of service. The study
suggested that public sector banks should come forward and try their best to
provide better quality service to win back their customers' loyalty and
commitment.
41
Hazra Sandip Ghosh and Srivastava Kailash, B.L (2009). “Impact of Service
Quality on Customer Loyalty, Commitment and Trust in the Indian Banking
Sector”, IUP Journal of Marketing Management, Vol.8, Nos.3 & 4, August,
pp.74-95.
55
Akroush Mamoun and Khatib Fahed (2009)42
examined the
relationship between service quality dimensions and banks performance
assessed based on financial performance and customer indicators.
A quantitative methodology was employed to test a model of service quality
which was developed for the purpose of this study. The data were collected
from managers' perspectives working for banks in Jordan. The sample size
was 390 managers working at Jordan's commercial banks headquarters.
Multiple regression analysis and analysis of variance were employed to test
the research model and hypotheses. The findings of the study showed that
the service quality dimensions have positively and significantly affected
banks performance assessed based on financial performance and customer
indicators. The functional quality dimension has a stronger effect on all
banks performance indicators than the technical quality dimension. The
effect of service quality dimensions on the banks financial performance is
still stronger than their effects on banks customer indicators.
Trivedi Megha and Agrawal Nirmit (2009)43
conducted a study
titled “A Study to Find the Gaps in Services Offered by ICICI Bank with
42
Akroush Mamoun, N, Khatib Fahed, S (2009). “The Impact of Service Quality
Dimensions on Performance: An Empirical Investigation of Jordan's Commercial
Banks”, Journal of Accounting, Business & Management, Vol.16, No.1, April,
pp.22-44.
43 Trivedi Megha and Agrawal Nirmit (2009). “A Study to Find the Gaps in
Services Offered by ICICI Bank with Regard to Customer Expectations and
Deliverables”, ICFAI Journal of Services Marketing, Vol.7, No.1, March,
pp.19-28.
56
Regard to Customer Expectations and Deliverables.” The study is based on
five dimensions of customer satisfaction with services provided by ICICI
Bank. The five dimensions used to measure service quality are tangibility,
reliability, responsiveness, assurance and empathy. This study gives useful
insights to boost customer satisfaction towards ICICI Bank. The findings of
the study revealed that quality of service is an indicator of customer
satisfaction. Measuring service quality involves objective feedback about
existing customers of ICICI Bank with respect to their expectations and
services offered. Performance of a bank may be evaluated with regard to a
set of satisfaction parameters that indicate the strengths and weaknesses of
an organization.
Dutta Kirti and Dutta Anil (2009)44
studied the expectations and
perceptions of the customers across the three banking sectors in India and
delineated the factors affecting the quality perception of the customers in
the banking sector and tried to confirm this perception with the financial
performance of the banks. The primary data were collected from 263
respondents across the three banking sectors. To explore the customers'
perception of service quality, factor analysis was employed and factors
affecting the Indian customers were highlighted. It was found that in the
banking sector, it is the foreign banks which are perceived to be offering
44
Dutta Kirti and Dutta Anil (2009). “Customer Expectations and Perceptions
across the Indian Banking Industry and the Resultant Financial Implications”,
Journal of Services Research, Vol.9, No.1, April, pp.31-49.
57
better quality of services followed by the private and then public banks. It
was also found that these perceptions are reflected in the financial
performance of the banks also. With the increasing competition amongst
banks, the findings can act as a strategic tool to achieve competitive
advantage and customer satisfaction.
Ravichandran (2010)45
conducted a study to examine the influence of
perceived service quality on customer satisfaction. Two private banks in
Tiruchirappalli District were selected. A total of 350 questionnaires were
distributed and 300 were returned. The primary data were collected with the
help of structured questionnaire. The findings of the study showed that only
responsiveness was found to be significant in predicting overall satisfaction
with the banking service. The study affirmed that service quality in the
private banks was at adequate level and the regression on overall service
quality lists out the various SERVQUAL items which has a spread in all the
dimensions of the SERVQUAL model.
Uma Sankar Mishra, et al. (2010)46
made an attempt to make a
comparative study of service quality perceptions of banks with service
45
Ravichandran, K (2010). “Influence of Service Quality on Customer Satisfaction
Application of SERVQUAL Model”, International Journal of Business and
Management, Vol.5, No.4, April, pp.117-124.
46 Uma Sankar Mishra, Kalyan Kumar Sahoo, Satyakama Mishra and Sujit Kumar
Patra (2010). “Service Quality Assessment in Banking Industry of India: A
Comparative Study between Public and Private Sectors”, European Journal of
Social Sciences, Vol.16, No.4, pp.653-669.
58
quality expectations of their respective customers; to know whether the
banks are at, above or below the perceptions of their respective customers;
and to suggest, on the basis of study results, ways and means for improving
service quality in banks with a view to make overall banking service more
effective and efficient. The primary data were collected through a structured
questionnaire from 387 customers selected, out of which 242 from public
sector banks and 145 from private banks. Initially 600 samples were
planned covering 300 customers of both private and public sector banks.
Because of the small number of branches of private banks and their urban
concentration, unwillingness of the customers to provide data, time and
budgetary constraints restricted the sample size to 387 customers. The
results of principal component analysis indicate that though the dimensions
suggested in the model are comparable with the sample results, the contents
of the factors are different. The respondents of both the banks mostly focus
on people factor for improving customer satisfaction; while the banks are
focusing on tangible factors such as computerization, ATMs, etc. to attract
customers.
Anabela Oliveira da Silva Fragata and Pablo A. Muñoz-Gallego
(2010)47
investigated the dimensions of perceived service quality, for large
corporate banking customers, and analyzed the relation with banking
47
Anabela Oliveira da Silva Fragata and Pablo A. Muñoz-Gallego (2010). “The
Importance of Perceived Service Quality in Banking Loyalty for Large Business
Customers”, Pecvnia Monográfico, pp.151-164.
59
loyalty. They conducted this study using an e-mail survey. The
questionnaires were sent and 220 customers responded. From the 220 sent
questionnaires, 70 valid questionnaires were finally returned, thus yielding
a 32% response rate. They found that the larger the size of the corporate
segment, the greater the number of banks used, with the larger companies
using the services of four or more banks on average, although strong loyalty
exists between companies and their lead commercial bank. They also found
that for companies which are loyal to only one bank, the key determinant
for remaining with that bank is the ability to accommodate their needs.
Jayaraman Munusamy, Shankar Chelliah and Hor Wai Mun (2010)48
focused on the measurement of customer satisfaction through delivery of
service quality in the banking sector in Malaysia. The survey questionnaire is
designed and distributed randomly to target respondents who are at the legal
age to hold a savings and/or current account in any of the retail banks in
Malaysia. Out of 140 questionnaires were distributed, only 117 responded.
The findings of the study revealed that the assurance, reliability, empathy and
responsiveness have no significant effect on customers‟ satisfaction. Only
tangibles have significant effect on customers‟ satisfaction. The study
suggested that in order to maintain the customers, the organization needs to
48
Jayaraman Munusamy, Shankar Chelliah and Hor Wai Mun (2010). “Service
Quality Delivery and its Impact on Customer Satisfaction in the Banking Sector in
Malaysia”, International Journal of Innovation, Management and Technology,
Vol.1, No.4, October, pp.398-404.
60
ensure right products and services, supported by the right promotion and
making it available at the right time for the customers.
Arun Kumar, et al. (2010),49
endeavored to fill the gap in the service
quality which determines customer satisfaction and attitudinal loyalty
literature by exploring the dimensions of customer perceived service quality
in the context of Indian retail banking industry. A set of variables are drawn
from customers‟ perceptions about service quality. These parameters have
been used in the context of two of the largest private banks dealing with
retailing banking namely, ICICI Bank and HDFC Bank to identify the
underlying dimensions of service quality which determine customer
satisfaction and attitudinal loyalty. The study suggested that in order to gain
and sustain the competitive advantages in the fast changing retail banking
industry in India, it is crucial for private banks to understand what
customers perceive to be the key dimensions of service quality and what
impacts the identified dimensions have on customers‟ attitudinal loyalty.
They also suggested that these issues should be a central concern for retail
bankers as well as service management academicians and practitioners to
explore the specific component and to train their employees in those areas
and to delight the customers in the needed domain to enhance service
49
Arun Kumar, S, Tamilmani, B, Mahalingam, S and Vanjikovan, M (2010).
“Influence of Service Quality on Attitudinal Loyalty in Private Retail Banking:
An Empirical Study”, The IUP Journal of Management Research, Vol.IX, No.4,
pp.21-38.
61
quality and build attitudinal loyalty to retain the valued customers who are
the most profitable customers for the banks.
Ravichandran, Tamilmani and Arun Kumar (2010)50
made an
attempt to identify the key dimensions of perceived service quality as well
as to investigate prevailing service quality level in the private retail banking
consumers and to find out a regressive equation on the five dimensions of
service quality with that of the overall service quality. Primary data were
collected for the research with the help of an undisguised structured
questionnaire. The sample size used was 300 respondents. Two top private
banks in Tiruchirappalli district were selected. The findings showed that
only responsiveness was found to be significant in predicting overall
satisfaction with the banking service. The study suggests that recognizing
responsiveness as another form of responsibility is essential to every
member of the health care system in order to increase customers‟ overall
satisfaction with banking service. The study affirms that the service quality
level in the private banks was at adequate level and the regression on
overall service quality lists out the various SERVQUAL items which have a
spread in all the dimensions of the SERVQUAL model.
50
Ravichandran, K, Tamilmani, B and Arun Kumar, S (2010). “Influence of
Service Quality on Customer Satisfaction Application of SERVQUAL Model”,
International Journal of Business and Management, Vol.5, No.4, April, pp.117-
124.
62
Dhandabani (2010)51
examined the nature of linkage between service
quality and customer loyalty in Indian retail banking. In total, 20 public
sector and 20 private sector banks in Madurai, Tamil Nadu, have been
purposively selected for the present study. From each bank, 10 customers
are purposively selected. The total sample size was 400 customers. The
study used confirmatory factor analysis to identify the service quality
dimension. The resulted dimensions are reliability, responsiveness,
knowledge and recovery and tangibles. The result highlights the need not
only to operationalize the service quality construct, but also to identify
which typology a service belongs, because the latter fact may suggest the
service quality factor. The findings of the study indicate that while service
quality is an important driver of customer loyalty, its indirect effect through
perceived value and customer satisfaction is overwhelmingly larger than the
direct effect in generating higher customer loyalty. Only when a service
culture is created, can the commercial bank‟s management ensure the
efficient delivery of services most desired by customers. The study
concluded that the customers‟ loyalty should be generated only through
customers‟ satisfaction. So the bank managers should aim at customer
satisfaction, then they ensure customer loyalty through customer
satisfaction but not directly through the service quality of banks.
51
Dhandabani (2010). “Linkage between Service Quality and Customers Loyalty
in Commercial Banks”, International Journal of Management & Strategy, July-
December, Vol.1, No.1, pp.1-22.
63
Ananth, Ramesh and Prabaharan (2011)52
evaluate customer
perceptions of service quality in selected private sector banks. The
objectives of the study are to evaluate the quality of service in selected bank
in Nagapattinam district; to identify the gap between customer expectation
and perception; and to identify the areas that need to improve by banks to
deliver superior quality of service. The primary data were collected from
200 customers of private sector banks using structured questionnaire. Gap
analysis and multiple regressions were used for the analysis of data. The
findings of the study showed that the dimension of service quality such as
empathy and accessibility has more gap, as the customer expectations are
high to their perceived service. The results of the study indicate that
empathy, reliability and assurance positively influence service quality. The
study suggests that the bank has to reduce this gap giving individual
attention to understand customer specific needs. Next to empathy more gaps
were observed in accessibility dimension. The customers of the banks
expect to extend the working hours on Saturday for their convenience. The
bank management should concentrate on proper maintenance of ATM.
52
Ananth, A, Ramesh, R and Prabaharan, B (2011). “Service Quality Gap
Analysis in Private Sector Banks: A Customers Perspective”, Indian Journal of
Commerce & Management Studies, Vol.II, No.1, January, pp.245-252.
64
Naveen Kumar and Gangal (2011)53
made an attempt to study the
level of customer satisfaction in new generation banks situated in Agra and
Delhi cities. By adopting simple random sampling 100 respondents were
selected. In the survey, 31 important parameters which have been clubbed
in 5 different categories named about branch, managing account, handling
of enquiries, quality of staff and general. The study aims to gather
information related to customers‟ expectations and observations based on
certain parameters related to commercial customers. The findings of the
study reveal that regarding the quality of staff, the bank is in good position
and something to cheer. In each parameter of this category, the customers
feel satisfied and also praise the efforts of bank staff. The bank has failed to
maintain the privacy of transactions which is the utmost requirement of
bank. The study suggested that the bank should focus to improve those
parameters immediately to fulfill customer expectation where mean score of
expectations is more than observations.
Siddharatha S. Bhardwaj and Mamta Bhardwaj (2011)54
conducted a
study to explore the expectations of customers of various categories of
commercial banks on service quality front; to measure the actual perception
53
Naveen Kumar and Gangal, V.K (2011). “Customer Satisfaction in New
Generation Banks (A Case Study of HDFC Bank)”, Journal of Arts, Science &
Commerce, Vol. II, No.l4, October, pp.177-186.
54 Siddharatha S Bhardwaj and Mamta Bhardwaj (2011). “Service Quality in
Indian Commercial Banks: A Category Specific Comparison”, Rai Management
Journal, Vol.8, No.1, July, pp.59-71.
65
of customers in this regard; to see if the selected categories of banks come
upto the expectations of customers on service quality front; to see which
category of banks enjoys an edge over others on service quality front; to give
some practicable suggestions to the banks to improve themselves on the
service quality front. The primary data have been collected with the help of a
structured questionnaire addressed to randomly 450 customers of selected
banks from National Capital Region, Chandigarh and districts of Kurushetra
and Ambala of Haryana state. The questionnaire has been designed by the
researchers keeping in mind prominent areas that govern service quality. The
findings of the study revealed that barring a few exceptions, customers‟
expectations on various imperatives of service quality are not matched. This
is true in case of all the selected categories of banks.
Mohammad Mizenur Rahaman, Md. Abdullah and Ataur Rahman
(2011)55
made an attempt to measure service quality of banking sector of
Bangladesh especially private commercial banks with SERVQUAL model.
The objectives of the study are to study the importance and impact of
service quality and customer satisfaction of private commercial banks; to
find the most important dimensions of service quality that affect customer
satisfaction in private commercial banks; to measure the satisfaction level
55
Mohammad Mizenur Rahaman, Md. Abdullah and Ataur Rahman (2011).
“Measuring Service Quality using SERVQUAL Model: A Study on Private
Commercial Banks in Bangladesh”, Business Management Dynamics, Vol.1,
No.1, July 1, pp.1-11.
66
of current customer in private commercial banks in Bangladesh; and to
recommend some guidelines to ensure quality services of private
commercial banks in Bangladesh. As the study is about measuring service
quality of private commercial banks, the population included mainly clients
of different private commercial banks in Bangladesh. The primary data
were collected from the 310 customers of 80 branches of 30 different
private commercial banks within Dhaka city. The study found the gap
between perceived services and clients‟ expectation of services on private
sector commercial banks.
Saraswathi (2011)56
conducted a survey among the customers of
private banks. A questionnaire was administered to 150 respondents but
only 111 were received, hence the response rate is 74 per cent. For analysis
mean, standard deviation, item to total correlation, correlation matrix and
reliability were calculated. The findings of the study revealed that
„tangibles‟ and „assurance‟ were the dimensions perceived high by the
customers while the dimension „reliability‟ is perceived low compared to
other dimensions. Correlation matrix revealed that the high correlation
exists between „understanding the specific needs of customers‟ and „staff
giving customers‟ best interest at heart‟ which means these two factors are
important for the customers in perceiving the service quality provided by
56
Saraswathi, S (2011). “Perception of Customers on the Performance of the
Private Banks: A Study with SERVQUAL”, International Journal of Management
& Business Studies, Vol.1, No.3, September, pp.95-99.
67
the private banks. The study concluded that reliability, empathy and
responsiveness are the dimensions which need to be taken utmost care by
the banks to enhance customers‟ satisfaction.
Vijay M. Kumbhar (2011)57
carried out a research to observe major
users group of internet banking services; to examine the relationship
between service quality and their satisfaction in internet banking; to
examine the relationship between customers‟ demographics and their
satisfaction in internet banking; and to examine the customers‟ satisfaction
in internet banking service provided by public and private sector banks.
The primary data were collected from 190 customers by customer survey of
public sector banks namely, SBI, Bank of Baroda, Corporation Bank, and
IDBI Bank, and private sector banks Axis Bank and HDFC Bank in Satara
city, Maharashtra. Stratified judgmental sampling was adopted and data
were collected during the period July 2010 to October 2010. Overall results
show that highly educated are using this service, however, remaining
customers are not using this service. Thus, the study suggests that there is a
need to simplify the internet banking services and encourage lower literate
people as well other people to use internet banking services. The results of
the study show that private sector banks are providing better service quality
57
Vijay M. Kumbhar (2011). “Service Quality Perception and Customers‟
Satisfaction in Internet Banking Service: A Case Study of Public and Private
Sector Banks”, Cyber Literature: The International Online Journal, Vol. 4, No.2,
December, pp.21-30.
68
of internet banking than service provided by the public sector banks. The
study suggests that public sector banks should improve their internet
banking services according to the expectations of their customers.
Dharmalingam and Kannan (2011)58
made an attempt to evaluate
the quality of service in selected new private sector banks in Erode district;
to identify the gap between customer expectation and perception; and to
identify the areas that need to be improved by banks to deliver superior
quality of service. The data were collected from 240 customers of selected
private sector banks in Erode district with the help of questionnaire. This is
an analytical study based mainly on the primary data collected through a
scientifically developed questionnaire. The data were collected from three
private banks, i.e. ICICI Bank, Axis Bank and HDFC Bank. The gap
analysis shows that product variety is having a gap between customer
expectation and perceptions of service quality. The study suggests that
banks have to understand the changing needs of customers, their aspirations
and expectations to create value. Banks should have a strong customer
relationship management system that would indicate the worth of the
customer and able to understand his needs.
58
Dharmalingam, S and Kannan, K.V (2011). “Customer Perception on Service
Quality of New Private Sector Banks in Tamil Nadu: An Empirical Study”,
Journal of Bank in Financial Services & Insurance Research, Vol.1, No.5,
August, pp.39-49.
69
Rajaram and Sankar Ganesh (2011)59
studied the difference between
the expected service quality and perceived service quality among the private
bank customers in Madurai and Virudhunagar districts. The objectives of
the study are: to identify the service gap between customer expectation and
perception among the private bank customers in Virudhunagar and Madurai
districts; to identify the most prioritized and least prioritized dimension of
service quality to the customers‟ point of view; and to suggest ways to
improve service quality of private banks. Simple random sampling is used
to select the respondents. Data were collected from 395 respondents with
the help of questionnaire. The questionnaires were distributed to the
customers who are the account holders of private banks in Virudhunagar
and Madurai districts. The study finds that the respondents expect good
behaviour from the employees that builds the confidence level and good
grievance handling from the private bankers. The parking space,
employees‟ willingness to answer the customers, employees‟ helping
tendency and seating arrangement in the bank are the other factors where
the service gap is more. The study suggested banker's individual attention to
their customers, convenient working hours for customers, staff's personal
attention towards customers, having customers interest at heart, understand
59
Rajaram, R.P.C.S and Sankar Ganesh, K (2011). “Service Gap Analysis in
Private Banks with Special Reference to Madurai & Virudhunagar Districts”,
Zenith Journal of Business Economics & Management Research, Vol.1, No.3,
December, pp.112-126.
70
the specific needs of their customers to concentrate more to keep the
customers satisfied.
Ramanigopal, Palaniappan and Mani (2011)60
studied the need and
importance of service quality in general; to review the established practices
of service quality of commercial banks in Coimbatore City; to study the
perception of customers towards service quality of the commercial banks in
Coimbatore City; and to offer suitable suggestions to improve service
quality of the commercial banks in Coimbatore City. This is an empirical
study based on survey method. The primary data were colleted from the
customers of the commercial banks in Coimbatore City with the help of
questionnaire. By adopting convenience sampling, 100 customers i.e. 50
customers from State Bank of India and 50 customers from ICICI Bank
were selected. The findings of the study revealed that there is no significant
relationship in the attitude of respondents belonging to different age groups,
income and occupation towards service quality of the commercial banks in
Coimbatore City. The study suggested that regular „customer satisfaction
audit‟ shall be carried out by the select commercial banks to find areas of
discrepancies. Round the clock banking facilities on phone i.e. tele-banking
and free home service to open a bank account and to withdraw deposit or
60
Ramanigopal, C.S, Palaniappan, G and Mani, A (2011). “Customers‟ Perception
towards Service Quality of the Commercial Banks in Coimbatore City”,
International Journal of Multidisciplinary Research, Vol.II, No.I, April-June,
pp.1-12.
71
cash, „home bank‟ is yet a dream to come true. They also suggested that the
select commercial banks might appoint young, well-educated, dedicated,
highly trained and motivated „relationship managers‟ to improve customer
relationship management.
Vibha Arora, Ravichandran and Jain (2011)61
investigated the
various dimensions of service quality and how these dimensions determine
customer satisfaction in Indian banking sector. The survey was undertaken
in Delhi and National Capital Region to test dimensionality of SERVPERF
by using construct validity and reliability test. The final questionnaire was
administered on 318 customers out of which 294 questionnaire were used.
Further multivariate regression analysis was used to see the impact of
service quality dimensions on customer satisfaction. Reliability and service
interaction were found to be significant variables to customer satisfaction.
This finding further reinforces the difference between developed and
developing nation. In a developing nation like India, tangibility does not
play a significant role. Customers are not concerned about the physical
environment but they are concerned about reliability of the service received.
61
Vibha Arora, Ravichandran, N and Jain, N.K (2011). “Dimensionality of
Service Quality and its Critical Predictors to Customer Satisfaction in Indian
Retail Banking”, Zenith International Journal of Multidisciplinary Research,
Vol.1, No.5, pp.1-11.
72
Fatima Holy Ghost and Edwin Gnanadhas (2011)62
conducted a
study to identify customers‟ perception on service quality factors; and to
analyze the impact of perception on service quality factors in commercial
banks among the different groups of customers based on their
demographics. The primary data were collected through the structured
questionnaires. By adopting purposive sampling, 715 customers were
selected for this study. Out of 715 customers, only 43.64 per cent of the
customers responded to the questionnaire. The study concluded that there is
a close link between the customers‟ perception on the service quality factors
and the customer satisfaction.
Anber Abraheem Shlash Mohammad and Shireen Yaseen
Mohammad Alhamadani (2011)63
examined the level of service quality as
perceived by customers of commercial banks working in Jordan and its
effect on customers‟ satisfaction. Service quality measure is based on
modified version of SERVQUAL as proposed by Parasuraman, et al. which
involve five dimensions of service quality, namely reliability,
responsiveness, empathy, assurance and tangibles. 260 questionnaires were
62
Fatima Holy Ghost, S and Edwin Gnanadhas, M (2011). “Impact of Service
Quality in Commercial Banks on the Customers Satisfaction: An Empirical
Study”, International Journal of Multidisciplinary Research, Vol.1, No.6,
October, pp.19-37.
63Anber Abraheem Shlash Mohammad and Shireen Yaseen Mohammad
Alhamadani (2011). “Service Quality Perspectives and Customer Satisfaction in
Commercial Banks Working in Jordan”, Middle Eastern Finance and Economics,
No.14, pp.60-72.
73
distributed randomly to customers of commercial banks. A total of 260 of
these questionnaires were completed and used in the data analysis. Multiple
regression analysis was employed to test the impact of service quality on
customers‟ satisfaction. The findings of the study revealed that the five
dimensions of service quality have significant influence on customer
satisfaction.
Deepak Gupta and Vikrant Singh Tomar (2011)64
evaluated and
compared customer perception about retail banking service offered by State
Bank of India that represents public sector banks, being the biggest public
sector bank in India and ICICI Bank that represents private sector banks,
being the biggest private sector bank in India. The prime objective of the
study is to examine which bank is more preferred by the customer. This is
an analytical study based mainly on the primary data collected through
scientifically developed questionnaire. The questionnaire has been
personally administered on a sample size of 300, chosen on a convenient
basis from a public sector and a private sector bank in the city of Ujjain.
The sample size of 300 is divided equally as 150 from SBI and 150 from
ICICI. The study concluded that both SBI and ICICI Bank truly deserve to
be the leading banks in their respective sectors. The services offered by
64
Deepak Gupta and Vikrant Singh Tomar (2011). “Comparative Study of
Customer Friendly Services of Selected Private & Public Sector Bank in India: A
Case Study of ICICI Bank Vs SBI”, Journal on Banking, Financial Services &
Insurance Research, Vol.1, No.9, pp.28-39.
74
them are very competitive, technically advanced and customer centric. It
can also be concluded looking at the responses that in “customer focus and
orientation,” ICICI Bank is regarded slightly better than SBI, whereas in
“proficiency” of operations, SBI was found better than ICICI Bank.
Singh and Sunayna Khurana (2011)65
investigated the level of
service quality of private banks from the customers‟ perspective and
assessing their satisfaction towards the services of the private banks. A
sample of 300 bank customers of private banks in Hissar district was
selected by random sampling technique. A survey questionnaire, based on
widely accepted SERVQUAL model, consisting of 22 items was
administered. The findings of the study showed that customers‟ perception
for private banks in Hissar district was lower than their expectations. The
study suggested that the private banks should adopt measures to reduce
service quality gaps specially related to attributes likes “bank staff giving
customers best interest at heart”, “personal attention given”, “friendliness
and courtesy of bank staff”, “when my bank promises to do something by a
certain time, it will do so” and “individual attention given by bank staff”.
65
Singh, S.P and Sunayna Khurana (2011). “Analysis of Service Quality Gap and
Customers‟ Satisfaction in Private Banks”, Gurukul Business Review, Vol.7,
Spring, pp.13-18.
75
Vibhor Jain, Sonia Gupta and Smrita Jain (2012)66
made an attempt
to understand customer perception regarding service quality; and to
understand different dimensions of service quality in banks. They selected
four banks namely ICICI Bank, HDFC Bank, Kotak Bank and IndusInd
Bank. For the purpose of data collection, questionnaires were administered
to the customers. A pilot study was conducted to ascertain the suitability of
the construct. After ascertaining the suitability, the questionnaire was
administered to the customers‟ sample size of 100 respondents. The results
of the study showed that the private sector banks like HDFC Bank and
ICICI Bank have emerged as the leading bankers. The analysis of these
dimensions identified that, among the four banks, the HDFC Bank has the
highest reliability in terms of employees, physical evidence and ambience.
With respect to other dimensions, responsiveness represents the HDFC
Bank again as the front-runner among the four banks followed by ICICI
Bank, Kotak Bank and IndusInd Bank respectively. The empathy dimension
identifies better understanding of customers‟ needs, as being very high in
the HDFC Bank, followed by ICICI Bank, Kotak Bank and IndusInd Bank.
The study suggested that private sector banks should take steps to enhance
the human resource element by training them to serve the customers
effectively and thereby enhance customers‟ quality perceptions.
66
Vibhor Jain, Sonia Gupta and Smrita Jain (2012). “Customer Perception on
Service Quality in Banking Sector: With Special Reference to Indian Private
Banks in Moradabad Region”, International Journal of Research in Finance &
Marketing, Vol.2, No.2, February, pp.597-610.
76
Jothi (2012)67
conducted a study to know the factors which lead to
higher level satisfaction with regard to banking service facility. The sample
for this research consists of heterogeneous category of commercial bank
users living in Kanchipuram. Initially, the survey instrument was distributed
among 160 people at different locations. Overall 112 respondents responded
to the request and 12 instruments were discarded due to missing
information. Finally the research was settled with 100 completed responses.
The findings of the study showed that a majority of the customers feel that
the service quality of bank is only average. The customers are not fully
aware of the service facilities offered by banks. The author suggested the
common banking strategy to different categories of customers. He also
suggested that the banks should take necessary steps to create awareness of
the usage by means of proper education. This will definitely help in the
transformation of banking sector in a positive manner.
Vijay Anand and Selvaraj (2012)68
analyzed the perception of
customers towards service quality in State Bank of India, Mohan Nagar
Township Branch, Salem district. The study is based on primary data
through a well designed questionnaire. Service quality is analyzed based on
67
Jothi, V.N (2012). “An Evaluation of Service Quality in Commercial Banks”,
International Journal of Research in Computer Application & Management,
Vol.2, No.2, February, pp.109-112.
68 Vijay Anand, S and Selvaraj, M (2012). “Customer Perception towards Service
Quality in State Bank of India: An Empirical Study”, Research Journal of Social
Science and Management, Vol.2, No.1, May, pp.67-74.
77
SERVQUAL scale. The questionnaire consists of 24 service quality
statements which include tangibility, reliability, responsiveness, assurance,
empathy and value added services. Convenience sampling was adopted and
50 customers were contacted in the bank premises and requested to make
their response. The findings of the study revealed that the bank provides
better service quality expected by customers. Moreover, the gap between
expectation and perception of service quality by the customers is not
significant.
Kailash (2012)69
compared the performance of two categories of
banks namely public and private sector banks in Vijayawada city using the
list of service attributes based on different service dimensions such as
tangibles, reliability, responsiveness, assurance and empathy. The
objectives of the study are to study the association between various
demographic variables and the choice of banks; and to compare the public
sector banks and private sector banks in terms of customer satisfaction.
Simple random sampling technique is adopted and 175 respondents i.e. 111
customers of public sector banks and 64 customers of private sector banks
constitute the sample for the survey. The findings show that private sector
banks performed significantly by satisfying its customers with good
69
Kailash, M (2012). “A Study on Customer Satisfaction with Service Quality in
Indian Public and Private Sector Banks”, Golden Research Thoughts, Vol.1,
No.IX, March, pp.1-4.
78
services and they have been successful in retaining its customers by
providing better facilities than public sector banks. The research points out
that new financial products and services have to be continuously introduced
in order to stay competent and that public sector banks have to build long-
term strategic relationships with its customers.
Amudha, Surulivel and Vijaya Banu (2012)70
studied customer
satisfaction towards quality of service. The primary data were collected
from 473 customers of ICICI Bank by applying stratified random sampling
method. The analysis has been made using factor analysis and the result
showed that the customers accept that the bank‟s standard is nearing the
industry standard. They opined that their loyalty towards the bank has
increased and the bank also deserves it because of its level of commitment
towards customers. The findings of the study revealed that the customers
are not willing to continue as a customer and they are not ready to pass
positive word-of-mouth to their friends and relatives. They do not perceive
a good value for the products purchased as the quality and usage of the
products are not upto their satisfaction level. As they are not satisfied with
the purchase experience and trustworthiness of the bank, they are not
willing to extend their support to the products in future.
70 Amudha, R, Surulivel, S.T and Vijaya Banu, C (2012). “A Study on Customer
Satisfaction towards Quality of Service of an Indian Private Sector Bank using
Factor Analysis”, European Journal of Social Sciences, Vol.29, No.1, pp.12-25.
79
Saroj Kumar Dash, Asif Parwez and Firoz Parwez (2013)71
have
made an attempt to have a clear understanding of the level of service quality
in the private sector banks in India and to find out the gap in the dimensions
of service quality based on the SERVQUAL analysis. The study is
exploratory in nature. The research consists of 5 banks from the private
sectors from Delhi and National Capital Region (NCR). The top 5 banks of
private sector namely ICICI Bank, HDFC Bank, HSBC Bank, Axis Bank
and Federal Bank are selected. The questionnaires were distributed
manually to the customers of these banks. The study has found that none of
the banks have been able to meet the customer expectations and are still
dwelling on the „zone of pain‟. HDFC Bank is the best among the private
banks and Axis Bank is the worst of the five banks under study in terms of
service delivery. HDFC Bank has to work in the empathy dimension to
perform better and move to the „zone of satisfaction‟ and then to the „zone
of delight‟. HSBC Bank which is just near HDFC Bank in service delivery
has to work in assurance and empathy dimensions. ICICI Bank has also to
work in the assurance and empathy dimensions. Federal Bank has to work
in the responsiveness, assurance and the empathy dimensions. Axis Bank
has to work in the dimensions of tangibility, assurance and empathy to
move out of the „zone of pain‟ to „zone of satisfaction‟ and „delight‟.
71
Saroj Kumar Dash, Asif Parwez and Firoz Parwez (2013). “Service Quality
Measurement and its Evaluation of Leading Private Banks of India in Delhi and
NCR Region: An Analytical Study”, International Journal of Contemporary
Business Studies, Vol.4, No.1, January, pp.33-46.
80
Vijay Anand and Selvaraj (2013)72
examined the impact of service
quality on customer satisfaction in Indian banking sector encompassing
public sector banks, private sector banks, and India‟s post savings bank
through SERVPERF scale. The sample included 158 respondents who are
customers of various banks have been selected through convenient
sampling method. The findings of the study reveals that except tangibility in
public sector and responsiveness, tangibility, competence in India‟s post
saving banking sector, rest of the factors are significantly associated with
overall service quality. Besides, factors like empathy and responsiveness
are highlighted as significant predictors and key factors in determining the
customer satisfaction in public sector banks rather than other sectors. The
results of the study showed that the performance of quality in the service of
all the banks considered is having a positive impact on customer
satisfaction. This study has alarmed the banking sectors to keep on
improving the service quality and to find causes of dissatisfaction, which
may lead to loss of their valuable customers to their competitors.
Vasanthi and Gowri (2013)73
carried out a study entitled “Customer
Perception towards Services Quality Attributes between Public Sector and
72
Vijay Anand, S and Selvaraj, M (2013). “Evaluation of Service Quality and its
Impact on Customer Satisfaction in Indian Banking Sector: A Comparative study
using SERVPERF”, Life Science Journal, Vol.10, No.1, pp.3267-3274.
73 Vasanthi1, T and Gowri, D (2013). “Study on Customer Perception towards
Service Quality Attributes of Public Sectors Banks and Private Sectors”,
81
Private Sector Banks in Coimbatore.” 50 branches were selected from
public sector banks namely State Bank of India, Canara Bank, Indian
Overseas Bank, Indian Bank and Central Bank which have more number of
branches in Coimbatore district. Also 50 branches were selected from
private sector banks namely ICICI Bank, HDFC Bank, South Indian Bank,
Karur Vysya Bank and City Union Bank. Totally 500 respondents were
selected. The primary data were collected through interview schedule by
using stratified random sampling method. The results of the study show that
the public sector banks have not found any significant relationship among
service quality dimensions. But private sector banks have found technology
has significant relationship with transactional and procedural service
qualities. A significant difference is found on technical, transactional and
procedural service qualities between public sector banks and private sector
banks. In public sector banks, transactional service quality has contributed
highest part whereas in private sector banks, technology service quality has
contributed highest part.
Swati Tripathi (2013)74
made an attempt to study the awareness of
the customer on service quality; to determine and evaluate the quality of
service in selected private sector banks; to determine the gap between
International Journal of Scientific and Research Publications, Vol.3, No.2,
February, pp.1-7. 74
Swati Tripathi (2013). “An Empirical Study: Awareness of Customers on
Service Quality of Public Sector Banks in Varanasi”, Journal of Business
Management & Social Sciences Research, Vol.2, No.1, January, pp.24-29.
82
customer expectation and perception; and to determine the areas that needs
to get better by banks to deliver better quality of service in Varanasi district.
Respondents for this study are the customers of the public sector banks.
Convenience sampling method was used. 300 survey questionnaires were
distributed among the participants, 270 questionnaires were filled and
returned, and 250 fully filled questionnaires were taken for the final
analysis. The results of the study showed that customers‟ expectations of
service quality are high and perceived quality of service is quite lower
across public sector banks. For public sector banks the most prominent gap
is in reliability, empathy, responsiveness dimension of the service quality.
The study suggests that banks have to understand the shifting needs of
customers, their objectives and opportunities to create value. The public
sector banks should have a strong customer relationship management
system that would specify the importance of the customer and able to be
aware of their needs. The study concluded that reliability, assurance,
empathy and responsiveness are the dimensions which need to be taken
utmost care by the banks to improve the customer‟s satisfaction.
Ragavan and Mageh (2013)75
examined the influence of service
quality dimensions on customer overall satisfaction. Among the different
cities in Tamil Nadu, the Chennai city has been purposively selected
75
Ragavan, N and Mageh, R (2013). “A Study on Service Quality Perspectives
and Customer Satisfaction in New Private Sector Banks”, IOSR Journal of
Business and Management, Vol.7, No.2, January-February, pp.26-33.
83
followed by new private sector banks and customers for the present study.
The 400 customers of Axis Bank, HDFC Bank, ICICI Bank and Yes Bank
have been selected for the present study by adopting multi-stage random
sampling technique. The service quality is assessed based on five
dimensions namely, tangibility, reliability, responsiveness, assurance and
empathy. The results shows that the most important service quality practice
on customer satisfaction is responsiveness as it is perceived as a dominant
service quality. The results also reveal that the service quality dimensions of
tangibles, responsiveness, reliability and assurance are positively and
significantly influencing the customers overall satisfaction, while the
empathy is negatively and significantly influencing the customers overall
satisfaction. The study reported the need for banks managers to place an
emphasis on the underlying dimensions of service quality especially on
responsiveness and should start with improving service quality in order to
raise overall customer satisfaction.
Sambhav Garg, Priya Jindal and Bhavet (2013)76
emphasized the
relationship between service quality and customer satisfaction. The
objectives of the study are to identify the banking sector that is largely
availed by the customers; to examine the expectations and the level of
76
Sambhav Garg, Priya Jindal and Bhavet (2013). “A Comparative Study on
Customer Satisfaction with Service Quality in Public and Private Sector Banks”,
International Journal of Research in Commerce, IT & Management,Vol.3, No.1,
January, pp.153-156.
84
satisfaction of the customers towards the services rendered by public and
private sector banks; to study the preferences and priorities towards types of
services provide by the public and private sector banks; and to compare the
public sector banks and private sector banks in terms of customer
satisfaction. This study attempts a comparison of performance among public
and private sector banks in Ambala district. This study is based on
questionnaire method. A sample of 160 customers has been selected using
convenient sampling method. This study concluded that private sector
banks are more preferred by majority of the customer as they emphasize
more upon relationship building with their clients and are better equipped
with modern infrastructure as compared to public sector banks. The
findings show that private sector banks performed significantly by
satisfying its customers with good services and they have been successful in
retaining its customers by providing better facilities than public sector
banks.
As said in the introduction, measuring the quality of services
provided is possible only through the perception of the quality of service
that the customers are experiencing from their organizations. The studies
reviewed above have examined service quality in the banking sector.
However, these studies have not looked into the level of importance of the
factors influencing the customers to prefer banking services, customers‟
satisfaction towards services of the new generation private banks,
85
customers‟ perception towards perceived level of service quality,
comparison between expected and perceived levels of service quality, and
customers‟ attitudinal loyalty towards services of the new generation
private banks. Thus, the present study is quite different from the studies
undertaken so far in filling this gap. With this background, this study is an
attempt to fill in the research gap in these areas. The study covers 550
customers from 11 branches of the 4 new generation private banks in Erode
district.