Service Quality in Public Private and Foreign Banks

Project Report on Service Quality-Study on Public, Private and Foreign Banks in India

Research Papers on Service Quality in Indian Banking Industry

Case Study on Service Quality-Banking Industry

Abstract

The need of the hour in the Indian banking sector is to build up competitiveness through enhanced service quality delivery; this is why service quality delivery improvement is a vital concern for banking services. Thus, the present study focuses on the relationship between service quality and service delivery among public, private and foreign banks in Odisha. The objective of the study is to find out whether customers' service delivery perceptions and expectations influences the customers' service quality perceptions and expectations with respect to three different banking sectors. For this a sample of 524 useable questionnaires of customers has been analyzed.

Today, the need for quality is felt everywhere by every organization, whether it is public, private or foreign

sector. Total quality management is structured system for satisfying customers and suppliers by integrating the

business environment through quality circles, continuous improvement and breakthroughs with development while changing organizational culture. Recognition of service quality and delivery as a competitive weapon is relatively a recent phenomenon in the Indian banking sector. Prior to liberalization era the banking sector in India was operating in a protected environment and was dominated by nationalized banks. Banks at the time did not feel to pay attention to service quality issues and they assigned very low priority to identification and satisfaction of customer needs. After liberalization as a result of partial implementation of Narsimhan committee report which suggests that banks should recapitalize, reach international standards and expand  their equity base. The nationalized banks and old generation banks started facing competition from the new private and foreign banks that had international banking standards. These new generation banks are characterized by the usage of modern information technology endorsed services like ATM, telebanking,

online systems etc. Clients, for the first time in India are able to choose from a number of banks offering a wide range of services and delivering quality service.

Banking Services in India

The banking industry in India has been a witness for the last decade to several regulatory changes that have resulted in a heightened level of competition among the banks. The entry of private sector and foreign sector banks, subsequent to the recommendations of the Narasimhan committee, have increased many fold the expectations of the customers in all areas relating to customer service (Thampy and Madanmohan, 1999). India’s banking system responded to the post-liberalization reforms in a creditable manner by showing admirable alacrity in absorbing the impact of reforms (Savlani, 2000). Thanks to maturing markets and global competition, bankers have been forced to explore the trade-off between winning new customers and retaining old ones. The focus of marketing has shifted to managing relationships with customers. The advent of private and foreign sector banks have also been instrumental in providing greater benefits and new service options to customers (Panigrahy, 2000). Though Indian banking is subjected to severe criticisms for its high amount of bad debts and lower profits, one crucial aspect of its performance that stands out glitteringly

is its contribution to the development and diversification of the Indian economy which witnessed a great surge in the last three decades (Prasad, 1997).

The greater use of technology in banking has made the sector more able to cope with varying demands on personal service delivery. Understanding the position of a particular service on each continuum, and the position of competitors, is thus an important step towards finding possible sources of competitive advantage.

Source:SCMS Journal of Indian Management; Jul-Sep2012, Vol. 9 Issue 3, p43-51

 

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