Comparative Study of Customer Satisfaction Between Public, Private and Cooperative Sector Banks in India

Topics: Bank, Banking in India, Credit union Pages: 13 (3964 words) Published: May 11, 2012
A Comparative Study of Banking Services and Customer Satisfaction in Public, Private and Cooperative Banks

Associate Professor, Department of Commerce,
A.G.Government Arts College, Tindivanam, Villupuram Distsrict, Tamil Nadu.

Keywords: Transaction based Banking services, IT enabled banking services, Customer satisfaction, Service Quality.


The banking system is facing challenges with stiff competition and advancement of technology. It becomes imperative for all service providers to meet or exceed the target customers’ satisfaction with quality of services expected by them. Hence the present research is attempted to study customers’ perception of quality of services, both transaction based and IT enabled in terms of its constituent factors in public sector, private sector and cooperative banks. Also through the present study, we would gauge the extent of IT adoption in public sector, private sector and cooperative banks in this electronic age. The present investigation in planned with the objective to assess the extent of use of services especially the IT enabled services in these banks and to analyze the constituent factors affecting customer satisfaction with the quality of services. The present study was conducted in public sector, private sector and cooperative banks of Villupuram district of Tamil Nadu. Multistage random sampling was used for selection of samples. The study was proposed to be conducted in eight taluks of Villupuram district. One branch of above banks in each taluk of Villupuram taluk was selected randomly. While selecting the branch, care was taken to see that the branch should provide at least five IT enabled services. This step was followed to have inter bank comparison. The study has revealed that the customers of nationalized banks and cooperative banks were not satisfied with the employees’ behaviour and infrastructure, while respondents of private sector banks were not satisfied with high charges, accessibility and communication.

1. Introduction

Banks play a role of considerable economic significance as intermediaries in mobilizing public savings and canalizing the flow of funds for productive purposes, keeping on the process of the economic growth of the country. Realizing the importance of the role of the banks in economic development, Government of India, Reserve Bank of India took several major initiatives after the country attained independence to gear the banking system to serve the national objective. One of the most momentous of such initiatives was the substitution of private ownership by public ownership, through the medium of an ordinance of the 14 largest commercial banks in the private sector on 19th July 1969. This has popularly come to be known as nationalization of these banks without which it would not have been possible to transform the class banking into mass banking and align bank credit to serve the planned priorities and social needs. Branch expansion programme formulated by the Reserve Bank of India aimed at making available necessary banking facilities in all parts of the country specially the unbanked rural and semi-urban areas. This was perceived as essential for implementation of project for rural development and upliftment of economically weaker sections and also spreading the banking habit even in the remote areas of the country. Banks assisted in the rehabilitation of sickly weak industrial units and in the prevention of unemployment, which would result from the closure of industrial units for want of credit measures thus mentioned substantially contributed to the canalizing of the bank credit to the various sectors of the economy which involved inter alia, flow of credit to sectors, which were hitherto neglected or the so called priority sectors. An efficient financial sector is an engine for economic growth. It converts the fuel...
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