International Journal of Management (IJM)

Volume 7, Issue 6, September–October 2016, pp.77–88, Article ID: IJM_07_06_009

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CUSTOMER’S PERCEPTION AND SATISFACTION

TOWARDS SERVICES OF PUBLIC & PRIVATE
SECTOR BANKS
Kesari Singh and Nitin Gupta
School of Business Management & Liberal Arts,
Shoolini University of Biotechnology & Management Sciences, Solan, H.P. INDIA.

ABSTRACT
Indian Banking has gone tremendous changes over time and the entry of private sector banks has
transformed the Indian banking both structurally and functionally. In this competitive banking
environment, customer satisfaction is considered as most imperative factor for the success of banks.
To attain the high level of customer satisfaction and to retain the customer base, it is important for
the banks to deliver quality services to its customers. Hence, the study analyzed relative customer
satisfaction levels of private and public sector banks. The issue is of importance to address the often
raised concerns of differences in working and quality of services provided by public and private
sector banks. A sample of 900 customers from the three northern region states viz. Punjab, Haryana
and Himachal Pradesh was selected for the primary survey. Well-structured questionnaire was used
to collect data. Customer perception and satisfaction was studied through various parameters viz.
effectiveness, accessibility, cost, tangibles, reliability and empathy. Association between these
indicators with the socio-economic variables viz. age, gender, occupation, annual income and area
was studied through chi-square test. Public sector banks were more cost effective whereas, private
sector did better in terms of tangibles. Private sector banks were comparatively more reliable due to
proficiency in service delivery.
Key words: customer satisfaction, private sector banks, public sector banks, service quality.
Cite this Article: Kesari Singh and Nitin Gupta, Customer’s Perception and Satisfaction towards
Services of Public & Private Sector Banks. International Journal of Management, 7(6), 2016, pp.
77–88.
http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=6

1. INTRODUCTION
Indian Banking has gone through enormous changes since independence. Introduction of new technologies,
economic uncertainties, fierce competition and changing demand of customers created a competitive
scenario for banks. In today’s fast moving life and highly competitive environment, the banking sector has
to understand and analyze the customer’s perception and requirements for service quality. To attain the high
level of customer satisfaction and to retain the customer base, it is important for the banks to deliver quality
services to its customers. The term service quality can be termed as a significant determinant of
competitiveness for establishing the sustainable and satisfying relationships with customers. Persuraman

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 Kesari Singh and Nitin Gupta

et.al (1992) defined service quality as the customer’s comparison between service expectation and service
performance. Customer satisfaction is a measure of how products and services provided by any organization
meet the expectation of a customer. The efficiency of the banking sector depends on how it delivers the
services to its existing customers. To survive in this competitive environment, it is important for banks to
provide fast and efficient services to its customers.
However, even after offering wide range of services, there exists a gap between the services offered by
banks and the expectations of the customers. In this fast changing scenario, it is important that banks should
go for customer segmentation and provide reliable, independent, impartial opinion and tailored treatment
that customers now expect. Customer satisfaction is a vague and theoretical concept and actual expression
of the state of satisfaction will vary from person to person and service to service (Kanojia and Yadav, 2012).
Hence, the present study was undertaken with an objective to compare the perception and customer
satisfaction towards quality of services provided by the public and private sector banks.

2. REVIEW OF LITERATURE
Customer satisfaction is one of the major determinants of performance and efficiency of a bank. Profitability
of the bank depends upon the quality of services it can deliver to its customers. Continuous improvement in
the quality of services is also required to survive in the competitive environment. Some of the studies
conducted on customer satisfaction with respect to services provided by the public and private sector banks
in India have been summarized below:
Aurora and Malhotra (1997) in their study titled, “Customer Satisfaction: A Comparative Analysis of
Public and Private Sector Banks” analyzed the level of customer satisfaction and some marketing strategies
in both private and public sector banks in India. On studying the parameters of satisfaction it was found that
routine operations, price, situational, environment, technology and interactive were the six factors of
customer satisfaction among public sector banks. But in private sector banks researcher found seven factors
of satisfaction out of which staff factor was ranked first and situational factor was the lowest ranked among
all seven. It was concluded that public sector banks should develop strategies for proper training and
development of bank staff, regular market surveys, designing customized services, avoiding long queues in
bank and maintaining attractive décor. Only then public sector banks will be able to compete with private
sector banks.
Debashis and Mishra (2005) measured customer satisfaction in branch services provided by public
sector banks in northern India. About 1200 customers were surveyed and it was found out that
computerization, accuracy in transactions, attitude of staff and availability of staff mostly influence
customer satisfaction. Least important factor was promotion of the products and various schemes.
Mishra and Jain (2007) conducted a study of nationalized and private sector banks to know the
constituent dimensions of customer satisfaction. Two stage factor analyses technique was used to arrive at
the dimensions of customer satisfaction. On analyzing it was found that vigilance, competence, advancement
in services, reliability, vision, responsiveness, reach, cost effectiveness and efficient process were the
constituent factors of customer satisfaction for nationalized banks, whereas service quality, reliability,
competence, efficient process, customization, ATM facility, vision, vigilance, simplicity of system and
brand image were the essential factors for private sector banks.
Mengi (2009) conducted an empirical study to evaluate and compare the service quality offered to the
customers by public and private sector banks of Jammu. SERVQUAL (service quality) scale was used to
determine different dimensions of service quality and chi-square test was performed to understand the impact
of SERVPERF (service performance) dimensions (tangibility, reliability, responsiveness, assurance and
empathy) on customer satisfaction. Study revealed that the customers of public sector banks were more
satisfied with the service quality offered as compared to those of private sector banks.
Rao and Lakew (2011) in their study on “Service Quality Perceptions of Customers: A Study of the
Customers’ of Public Sector and Private Sector Commercial Banks in India”, examined the service quality
perceptions of customers of public and private sector banks in the city of Visakhapatnam. Total 300

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 Customer’s Perception and Satisfaction towards Services of Public & Private Sector Banks

respondents were surveyed using the universally accepted SERVQUAL model in which 42 quality
measuring parameters were used under the five dimensions of service quality i.e. tangibles, reliability,
assurance, responsiveness and empathy. It was concluded that out of all variables reliability and assurance
were rated highest while the tangibles dimension got the lowest score. Moreover, the study revealed that
there was the strong dissimilarity in service quality perceptions between customers of private sector and
public sector banks.
Dharmalingam and Kannan (2011) carried out an empirical study to evaluate the service quality of
new private sector banks in Tamilnadu. Data was collected from 240 respondents from three private sector
banks i.e. ICICI Bank, AXIS Bank and HDFC Bank. On analyzing it was judged that from all selected
variables of customer perception, tangibles were rated highest and product variety area was rated lowest
among all.
Bilamge (2011) in “A Comparative Study of Customer Perception Towards Services Rendered by
Public Sector and Private Sector Banks”, evaluated and compared the customer satisfaction level in ICICI
bank and State Bank of India. The results of the study revealed that behavior of the ICICI Bank staff was
friendlier than that of State Bank of India. As compared to SBI, token system and upholding of ATMs in
ICICI Bank was highly treasured by all the customers. It was concluded that vital services were lacking in
both the banks.
Virk and Mahal (2012) analyzed the customer satisfaction level of Public and Private Sector Banks by
conducting a comparative study in Chandigarh City. The study revealed that branch facilities were positively
correlated with teller services, relationship with managers, mutual fund services and telephone enquiry which
contribute in large extent towards customer satisfaction. Further it was concluded that private sector banks
emphasize more upon building their clients and are better equipped with modern infrastructure as compared
to public sector banks.
Gupta et.al (2013) compared the customers’ perception of service quality of public and private
banks of Delhi and NCR using SERVQUAL method. The questionnaire consisting five key dimensions
namely tangibles, reliability, responsiveness, assurance and empathy was circulated among 200 respondents
using simple random sampling technique. Study revealed that private banks satisfied their customers with
good services and they had successfully implemented tangible factors like modern equipments,
infrastructural facilities, quality of materials used etc. Further, it was explored that most of the respondents
felt that the employees of private banks were very keen to satisfy their customers whereas on other hand
customers of nationalized banks felt that the employees were least bothered about their customers.
Gill and Arora (2013) conducted a comparative analysis of level of customer satisfaction towards
services provided by public and private sector banks. Two public sector banks selected for the study include
Punjab and Sind Bank and Union Bank of India and the private banks include HDFC bank and IDBI bank.
Primary survey of 200 customers was conducted using convenient sampling method in three major cities of
Punjab namely Amritsar, Jalandhar and Ludhiana. It was analyzed that private banks need to work on gaining
faith of customers as customers still don’t feel secured while dealing with terms and conditions given by
private banks whereas public banks enjoy the hierarchical trust as they are older in Indian financial system.
Further study revealed that public banks need to work more on technology and overall décor to survive in
the market.
The literature highlighted various factors which determine the customer perception and satisfaction
towards the service quality. However, the evidences of association between socio-economic variables and
customer satisfaction with respect to public and private sector banks are limited. Hence, the study was
undertaken to get a broader view on the variation in the perception and level of satisfaction of customers
across socio-economic variables.
Anita (2014) in her research article presented the customer satisfaction level between public and private
sector banks to get a bird’s eye view of customer satisfaction practices being adopted by selected banks. It
was also analyzed that customers were more satisfied with the private sector banks than public sector banks

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 Kesari Singh and Nitin Gupta

and customer satisfaction is largely dependent upon products availability in the banks rather than locations
of the bank.

3. MATERIAL AND METHODS

The study was carried out in three states viz. Punjab, Haryana and Himachal Pradesh in northern region of
India. One city was purposively chosen from each selected state. Major consideration in selecting these cities
for detailed survey was taken as the availability of all the chosen banks in the selected city. Thus, three cities
viz., Shimla in Himachal Pradesh, Panchkula in Haryana and Mohali in Punjab were taken for the purpose
of survey for customer satisfaction. Finally, a sample of 300 customers of the selected banks (150 private +
150 public) from each state was interviewed using convenience sampling method. In this process, total
sample of 900 customers was studied to fulfill the objective of customer satisfaction.
For the selection of banks, two separate lists of public and private sector banks operating in the selected
states were prepared, using the relevant data published by Indian Banks Association. Public and private
sector banks were arranged on the basis of their total assets. A random sample of three banks each were
selected from the lists of public and private sector banks for conducting the survey for analyzing the customer
satisfaction of the services provided by the two groups of banks. The banks so selected for the detailed study
included Bank of India, Union Bank of India, Punjab & Sind Bank in the category of public sector banks
and ICICI Bank, Axis Bank, Indus Ind Bank in private sector bank category.
A well-structured questionnaire was used during the surveys to collect data from the selected customers.
Responses were collected by using likert scale. Parameters taken to study the customer satisfaction included
effectiveness, accessibility, cost, tangibles, reliability and empathy. These parameters were further evaluated
on the basis of different indicators and the association between customer satisfaction indicators and socio-
economic variables was studied to get a clear picture of the customer satisfaction towards selected services
provided by the banks. The questionnaire consisted of the questions related to each selected parameters of
different indicators of satisfaction towards banking services used by the customers and about the suggestions
of the customers for possible improvement in these services. Data collected was analyzed using chi square
test.

4. RESULTS AND DISCUSSIONS

The present study attempted to measure the customer’s satisfaction with respect to the services provided by
public and private sector banks. Various parameters viz. service effectiveness, accessibility, cost, tangibility
and bank reliability were used to measure the customer satisfaction. These parameters were further evaluated
by recording the customer responses towards various service quality indicators. Responses were collected
by using likert scale. The association between selected indicators and the socio-economic variables viz. age,
gender, educational qualification, occupation annual income and area, was studied by using chi-square test
to get a clear picture of the customer satisfaction with regard to banking services. The results of chi square
test have been presented below.

4.1. Effectiveness Indicators and Customer Satisfaction

The customer responses towards effectiveness indicators were studied to know the level of customer
satisfaction with respect to the service quality of both public and private sector banks. Results of the study
have been given in the table 4.1 below.
H0; 1: There is no significant relationship between socio-economic variables and effectiveness indicators.

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 Customer’s Perception and Satisfaction towards Services of Public & Private Sector Banks

Table 4.1 Association between Socio-Economic Variables and Effectiveness Indicators

(Chi Square Analysis)

Socio-economic Variables
Effectiveness Indicators Bank
Age Gen EQ OCC AI Area
Group

Courteous and friendly employee Public .029* Ns ns .027* ns ns

behavior Private ns Ns ns ns .003* ns
Public .029* Ns ns ns ns ns
Recognition as a valued customer
Private ns Ns ns ns .007* ns

Bank maintains customer Public .011* Ns ns .038* ns ns

confidentiality Private ns Ns ns ns ns ns

Bank provides fast and efficient Public ns .035* ns ns ns ns

services Private ns Ns ns ns .002* ns

Trained and knowledgeable bank Public ns ns ns ns ns ns

personnel Private ns ns .005* ns ns ns
Public ns .049* Ns .025* ns ns
Bank have good reputation
Private ns ns ns ns ns ns

Feeling of security in bank Public .011* ns ns .007* ns ns

transactions Private ns ns ns ns .035* ns
Note: Gen-Gender, EQ-Educational Qualification, OCC-Occupation, AI-Annual Income
**; non-significant, p>0.05, *; significant, p<0.0
Chi square test was applied to study the association between socio-economic variables and effectiveness
indicators of customer satisfaction in public and private sector banks and the results have been presented in
table 4.1. It was hypothesized that there is significant association between the socio-economic variables and
the effectiveness indicators. The results depicted that in case of public sector banks, a significant relationship
was found between the socio-economic variables viz. age and occupation with behavior of the bank
employees. It implies that customers of higher age group found the behavior of the bank employees courteous
and friendly because the senior citizens were given special attention by the bank employees. Whereas, in
case of private sector banks, income of the respondents and the behavior of the bank employees were found
to be significantly related which indicates that the higher income group customers were provided better
treatment by the private bank employees. Similarly, higher age group customers of public banks believed
that they were recognized as valuable customers whereas, in case of the private sector banks, higher income
group customers were recognized as valuable customers due to their regular heavy transactions with the
banks.
Table 4.1 further highlights that none of the socio-economic variables was found to have a significant
relationship with the bank confidentiality in case of private sector banks. In case of public sector banks, age
and occupation had significant relationship with bank confidentiality which indicates that higher age group
customers believed that their bank was maintaining the customer confidentiality. Similarly, female
customers of the public sector banks found the services provided by their bank to be fast and efficient as the

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 Kesari Singh and Nitin Gupta

association between gender and quality of bank services was found to be significant. However, in case of
private sector banks, opinion varied with the income meaning thereby, higher income group found the private
bank services to be fast and efficient. As far as the capabilities of the bank staff was concerned, educational
qualification of the respondents was found to be having a significant relationship in case of private banks
which implies that customers with higher qualification were of the opinion that the private banks had well
trained and knowledgeable staff. No significant relationship between capabilities of the bank staff with any
of the socio-economic variables was found in case of public sector banks.
While comparing the public and private sector banks in terms of reputation, opinions varied with gender
and occupation but only in case of public sector banks. It infers that public banks had a good reputation
among its female customers. When it comes to the feeling of security in bank transactions, opinion varied
with age and occupation in case of public sector banks and varied with income in case of private sector banks
because the relationship was found to be significant in these variables. It denotes that the higher income
customers of private banks feel secure while making transactions whereas, in case of public sector banks,
higher age group customers feel more secure making transactions. No significant relationship was found
between effectiveness indicators and the area (rural, semi-urban and urban).
Hence, it can be concluded that socio-economic variables viz. age, gender and occupation had a
significant association with effectiveness indicators in case of public sector banks. Educational qualification
and annual income of the respondents were found to be having significant relationship with the effectiveness
indicators in case of private sector banks.

4.2. Access Indicators and Customers’ Satisfaction

The accessibility of banking services was studied through various indicators like availability of ATMs, user
friendly internet & mobile banking facilities, branch network, adequate customer service etc. The results
have been presented in the table 4.2.
H0; 2: There is no significant relationship between socio-economic variables and access indicators.

Table 4.2 Association between Socio-economic Variables and Access indicators

(Chi Square Analysis)

Socio-Economic Variables
Accessibility Indicators
Bank
Age Gen EQ OCC AI Area
Group
Availability of sufficient number of Public ns ns ns ns ns ns
ATMs Private .000* ns ns ns .003* ns

User friendly Internet and mobile Public ns ns .045* ns ns ns

banking facility Private .000* .005* ns .015* .008* ns
Public ns .012* ns ns ns ns
Short waiting time at the counter
Private .001* ns .033* ns ns ns
Public ns ns ns ns ns ns
Wide bank branch network
Private .001* ns ns .000* ns ns

Adequate customer services & Public ns ns ns ns ns ns

support of the bank Private ns ns ns ns ns ns
Note: Gen-Gender, EQ-Educational Qualification, OCC-Occupation, AI-Annual Income

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 Customer’s Perception and Satisfaction towards Services of Public & Private Sector Banks

**; non-significant, p>0.05, *; significant, p<0.05

Table 4.2 highlights the association between access indicators and socio-economic variables analyzed
using chi square test. Results of the chi-square analysis with p-values (p<0.05) indicate that in case of private
sector banks, association between some of the socio economic variables viz. age, occupation, annual income
and access indicators of customer satisfaction was found to be significant. Thus, it can be interpreted that
opinion of the customers towards accessibility differ with age, occupation and income level of the customers.
The customers of higher age and income group found the availability of private bank ATMs sufficient
whereas opinion of public sector banks did not vary across the socio-economic variables. Hence, it may be
concluded that customers of public sector banks are satisfied with the accessibility to ATMs, bank branches,
internet & mobile banking services and adequate customer support services provided by these banks.
When it comes to the internet and mobile banking services, educational qualification of the public sector
bank customers was found to be significantly associated with user friendly services. It implies that customers
with higher qualification only found the services user friendly. On the contrary, user friendly mobile and
internet facilities had a significant relationship with age, gender, occupation and income level of the
customers of the private sector banks. It clarifies that female customers, customers of higher age and income
group found the services more user friendly whereas salaried class customers found it lease use friendly and
self-employed and business class found the services user friendly. Hence, private sector banks need to ease
the process of mobile and internet banking to satisfy the low income and salaried class customers.
Table4.2 also shows the significant relationship of short waiting duration at the counter with gender of
the public sector customers meaning thereby, females found the waiting duration short as there were special
queues for female customers and the number of female customers visiting the banks was also lesser.
However, in case of private sector banks, opinion varied with age and educational qualification of the
customers indicating that the higher age and qualification group found the waiting time short. It was the
result of special attention provided to the senior citizens and to the customers of comparatively higher income
group who were frequent visitors to the banks and had comparatively bigger transactions with the banks.
Opinion with regard to the wide bank branch network varied with age and occupation of the private sector
bank customers indicating that customers of higher age and self-employed or businessmen believed that
private banks had wide bank branch network. No significant relationship between the place of residence of
customers and the access indicators of customer satisfaction was depicted.

4.3. Cost Indicators and Customer Satisfaction

While studying the customer satisfaction with regard to services provided by the public and private sector
banks, it was imperative to study the cost effectiveness of the banking services. The customer responses
towards cost indicators have been presented in the table 4.3.
H0; 3: There is no significant relationship between socio-economic variables and cost indicators.

Table 4.3 Association between socio-economic variables and cost indicators

(Chi Square Analysis)

Socio-Economic Variables
Cost Indicators
Bank
Age Gen EQ OCC AI Area
Group

Transparency in fees and other Public Ns .006* ns ns ns Ns

charges Private Ns ns ns ns .000* Ns
Bank’s timely refund facility Public Ns ns .034* ns ns Ns

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 Kesari Singh and Nitin Gupta

Private Ns ns ns ns ns Ns

Adequate Processing Charges for Public Ns ns ns ns ns Ns

using the services Private Ns ns ns ns ns Ns
Note: Gen-Gender, EQ-Educational Qualification, OCC-Occupation, AI-Annual Income
**; non-significant, p>0.05, *; significant, p<0.05
The table 4.3 with p-values (p<0.05) revealed that in case of public sector banks socio-economic
variables viz. gender and educational qualification were noted to be significantly related to customer
satisfaction. Females were comparatively more satisfied with the transparency in fee and other charges of
the public sector banks whereas, customers with higher qualification were more satisfied with timely refund
facility of the banks. On the contrary, income level had a significant relationship with the transparency in
fee indicator which implies the higher satisfaction level of the higher income group with transparency in fee
provided by the private sector banks. It was so because the higher income group people in private sector
banks were recognized as valuable customers due to their higher transactions. Hence, public banks should
pay attention towards the comparatively lesser qualified people whereas, private banks need to value the
lower income group customers as well.

4.4. Tangibility and Customer Satisfaction

It was essential to study the level of customer satisfaction with respect to the tangibles including décor,
appearance of the bank staff, availability of modern technology etc. These tangibles are must to attract the
customers in modern era and banks have been giving much importance to these indicators these days. The
customer responses towards tangibility indicators have been presented in the tables 4.4.
H0; 4: There is no significant relationship between socio-economic variables and Tangibles indicators.

Table 4.4 Association between socio-economic variables and tangibles indicators

(Chi Square Analysis)

Socio-Economic Variables
Tangibility Indicators
Bank
Age Gen EQ OCC AI Area
Group

Easy access to account statements and Public ns ns ns ns ns ns

various information Private .000* ns ns ns .004* ns
Public ns ns ns .029* ns ns
Clean, pleasant and attractive décor
Private .011* ns .017* ns ns ns

Well dressed and neat appearing Public ns ns ns .011* ns ns

employees Private .000* .011* .000* ns .035* ns
Public ns ns ns .046* .001* ns
Equipped with modern technology
Private .032* ns .000* ns ns ns
Note: Gen-Gender, EQ-Educational Qualification, OCC-Occupation, AI-Annual Income
**; non-significant, p>0.05, *; significant, p<0.05
Table 4.4 shows the relationship between socio economic factors and tangible indicators in public and
private sector banks with p-values (p<0.05) indicating that in case of private sector banks significant

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 Customer’s Perception and Satisfaction towards Services of Public & Private Sector Banks

relationship existed between socio-economic variables like age, gender and educational qualification and
tangible indicators, which implies that opinion of the customers towards information access, decor,
appearance of employees and availability of modern technology varies with these variables. On other hand,
in case of public sector banks, no association between socio-economic variables viz. age, gender and
qualification and tangible indicators was found. It implies that higher age and income group customers of
private banks were comparatively more satisfied with the access to account statement and other information
provided by these banks. In terms of the décor of the banks, satisfaction level varied with age and
qualification of the customers in case of private banks and it varied with occupation in public banks. It is
because the salaried class do not give much importance to the décor of the public sector banks whereas, well
qualified and higher age customers being more judgmental in terms of private sector banks. It has also been
revealed that in case of both the bank groups, no significant relationship was found between the area and
tangible indicators of customer satisfaction.
As far as the appearance and dressing sense of the staff was concerned, there was found a significant
relationship between this indicator and the age, gender, qualification and income of the customers because
the customers of private banks were highly demanded. Only occupation was found to be significantly related
to appearance of the public bank staff. In terms of availability of the modern equipments, significant
relationship was found with occupation and income in public banks meaning thereby, higher income and
self-employed customers were comparatively more satisfied with these modern equipments because the
salaried class and low income group were not very technology savvy. On the contrary, in private sector
banks, age and qualification had significant relationship with this indicator implying that higher age group
and business as well as self-employed customers were comparatively more satisfied with the modern
techniques.

4.5. Reliability Indicators and Customer Satisfaction

Reliability was studied in terms of identification and correction of errors in service delivery also the interest
taken by the banks in resolving the issues. The findings have been presented in table 4.5.
H0; 5: There is no significant relationship between socio-economic variables and reliability indicators.

Table 4.5 Association between socio-economic variables and Reliability indicators

(Chi Square Analysis)

Socio-Economic Variables
Reliability Indicators
Bank
Age Gen EQ OCC AI Area
Group

Identifies and correction of errors in Public .049* ns ns .026* .036* Ns

service delivery Private ns ns ns ns ns Ns

Sincere interest taken by staff in Public Ns ns ns ns ns Ns

solving the problems Private .006* ns ns ns ns Ns
Note: Gen-Gender, EQ-Educational Qualification, OCC-Occupation, AI-Annual Income
**; non-significant, p>0.05, *; significant, p<0.05
Table 4.5 is depicting the relationship between socio-economic variables and reliability indicators.
Results with p-values (p<0.05) signifies the significant association of socio-economic variables such as age,
occupation and annual income with reliability indicators which implies that opinion of the customers towards
reliability indicators differ with the age, occupational and income groups. In case of private sector banks,
relationship between age and sincerity of bank employees was found to be statistically significant. Further,

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 Kesari Singh and Nitin Gupta

socio-economic variables (gender, educational qualification and area) had no significant association with
reliability indicators, which implies that all the customers irrespective of gender, qualification and area had
the same opinion regarding reliability of the bank services. Hence, public sector banks need to work sincerely
towards troubleshooting the errors and emissions.

4.6. Empathy Indicators and Customer Satisfaction

Empathy dimension deals with the approach of the banks towards its customers in understanding their
specific needs, having convenient operating hours and complaint handling. The level of satisfaction of the
customers towards empathy indicators has been analyzed in table 4.6.
H0; 6: There is no significant relationship between socio-economic variables and Empathy indicators.

Table 4.6 Association between socio-economic variables and Empathy Indicators

(Chi Square Analysis)

Socio-Economic Variables
Empathy Indicators
Bank
Age Gen EQ OCC AI Area
Group
Public Ns Ns ns ns ns ns
Convenient operating hours
Private Ns Ns ns ns .040* ns
Public Ns Ns ns .019* ns ns
Personal attention to customers
Private Ns .037* .000* ns ns ns
Public Ns Ns ns .003* ns ns
Consideration of specific needs
Private ns Ns ns ns ns ns
Public ns Ns ns ns ns ns
Effective complaints handling
Private ns Ns ns ns ns ns
Note: Gen-Gender, EQ-Educational Qualification, OCC-Occupation, AI-Annual Income
**; non-significant, p>0.05, *; significant, p<0.05
Table 4.6 showing the results of chi-square with p-values (p<0.05) indicate that in case of private sector
banks significant relationship have been found between socio-economic variable viz. age, educational
qualification and annual income and empathy indicators. This implies that according to gender, education
and income group wise, opinion of the customers varied towards the empathy indicators. On a contrary, in
case of public sector banks, no association had been found between socio-economic variables like gender,
qualification and income and empathy indicators, which implies that the customers of public sector banks
seem to be fully satisfied with empathetic attitude of bank towards its customers. It infers that higher income
customers of private banks found the working hours convenient because they were more inclined towards
the use of mobile and internet banking. Similarly, females and higher qualification customers were more
satisfied with the personal attention provided to them by the private sector bank staff. On the contrary, self-
employed and business class customers of the public banks were comparatively more satisfied with the
special attention given to them and they also felt that their banks understand their specific needs better. This
again clarifies that the public banks should work on catering the needs of the salaried class customers. It has
also been revealed that in case of both the bank groups, no significant relationship had been found between
socio economic factors (age and area) and empathy indicators which implies that area to which the customer
belongs, does not affect the level of satisfaction with regard to banking services.

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 Customer’s Perception and Satisfaction towards Services of Public & Private Sector Banks

5. CONCLUSION
Public sector banks should work to win the confidence of salaried class and lower age group customers
specially students as these banks had a better image in the eyes of customers of higher age group,
businessmen and self-employed people. On the contrary, private sector banks should give much attention to
the lower income group customers also because the higher income group found the services provided by the
se banks to be more effective. However, mobile and internet banking was a matter of concern for the public
and private sector banks but the issues varied. Private sector banks need to make these services more user
friendly to the level of lower income group customers, salaried class and students as well. Conversely, public
sector banks have to create awareness among its customers about these services so that they feel confident
in using these services. As far as reliability and cost effectiveness are concerned, public sector banks should
focus on developing some mechanism for the correction of errors in service delivery and also should pay
attention towards timely refund in case of unsuccessful transactions etc. Private sector banks should be little
more transparent in fee and other charges. As far as the tangibility is concerned, there are high expectations
from the private sector banks in terms of well-dressed staff, attractive décor and access to account statements
and other information. On the contrary, public sector banks should also attempt to be at par with private
sector banks in the times to come. Both the private and public sector banks have been empathetic towards
their customers because it is the need of the hour in today’s competitive world.

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