08-16-2017, 09:32 PM
PRESENTED BY
Avneesh kumar saxena
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Impact of service quality and customer Satisfaction loyalty and Commitment in the Indian Banking System
1. INTRODUCTION
The Purpose of this study to investigates relationship dimensions and studies the differences in perception of customers with respect to services provided by five Indian banks. The relationship dimensions which lead to customer satisfaction have been identified. This study reports on the different satisfaction levels of customers of private and public sector banks with respect to the services provided by their banks
1.1 HISTORY OF THE BANKING SECTOR
Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India.
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India. It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla.
Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondichery, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center.
The Bank of Bengal, which later became the State Bank of India.
The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India.
The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.
The favour of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. Four nationalized banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking".
The State Bank of India (SBI) is the oldest and largest bank in the country. Its origins go back to the first decade of the 19th century, when the Bank of Calcutta was established on 2 June 1806. The bank got its present name after an Act of Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955. Today, SBI has a phenomenal 9,559 branches and its ATM network is spread across 6,473 of its own locations& total 8,000ATMs including of those of its associate banks.
State Bank of India is a successor to Imperial Bank of India, which was established in 1921.The bank, came into being on 1.7.1955 through the State Bank of India Act, 1955.
States of India joined the State Bank Group, as subsidiaries under the State Bank of India (Subsidiaries Banks) Act, 1959
1.2 EMERGING TRENDS IN BANKING SECTOR
The liberalization process initiated by the government about a decade ago has changed the landscape of several sectors of the Indian economy. The financial sector like other sectors is also going through major changes as a consequence of economic reforms. The consumption-led boom in India has fuelled robust demand for financial products especially in the banking domain. Emerging competition has generated new expectations from existing and new customers. There is an urgent need to introduce new and more attractive customer-friendly products and services. The banking sector presently is at an inflexion point. Existing products need to be delivered in an innovative and cost-effective manner by taking full advantage of emerging technologies. Technology has swiftly become a business driver rather than a business enabler. This sector has seen phenomenal growth in terms of technology infusion and adoption in the recent past such as: Internet and Mobile Banking, CRM, etc. With increasing competition and tightening of prudential norms by the Reserve Bank, the players in the banking industry, both Indian and global are taking turns towards mergers and acquisitions. Only banks having adequate infrastructure, technology, economies of scale and well connected network of branches will be able to survive and meet the challenges of ever increasing competition and customer expectations. The book is divided into two sections. Section-I extensively covers the trends, issues and challenges related to the technology i.e. ATMs, e-banking, data warehousing and data mining, CRM solutions, etc. Section-II covers other contemporary issues in the banking sector such as Basel II, financial inclusion, service quality, risk management, banc assurance, retail banking, universal banking etc. The book shall serve as a rich reference resource for decision makers in the banking industry, researchers, academicians and students.
The traditional distinctions between banking and other financial services like insurance on one side; and between commercial banking, developmental banking and investment banking are getting blurred. The emergence of universal banking and banc assurance are clearly pointers. This global convergence of financial services may gather further momentum in the years to come. The banking and insurance sector reforms have encouraged private sector players to make forays into the business in collaboration with major international companies.
This new scenario will witness financially sound and experienced players transforming the industry with best practices in product development, operational efficiency, marketing capability, service focus, and tech savy orientation. Thus there is a need for intensive, futuristic and career oriented programs in these two areas: Banking and Insurance. These developments in Banking and Insurance industry call for competent and professionally trained managers",
Increasing competition, thinner spreads and introduction of new technology driven products are some of the trends that the Indian banking system is experiencing. "Recent trends in Indian banking have reflected the efforts of the major players to adapt to a rapidly liberalizing and globalizing environment.
While the impact of these changes is possibly a subject of debate, there is one group which is not complaining the customers, the beneficiaries of the process of liberalization," observed Amitabh Guha, State Bank of Travancore.
Further, the technology oriented banking has become one of the latest mantras of success in the market, especially to win over the customers.
To this, says SBI Chairman AK Purwar, "Indian banks need to fuel the market by bringing new products at par with the international standards, extending ATM facility to rural areas and vibrant networking countrywide to compete with the new generation and the MNC banks in India"
As T.S. Anantharaman, Financial Analyst, mentioned, "The savings and investments scenario in our country has undergone total change in the past decade, since the country embarked on a course of liberalization and globalization of its economy
With the increasing sophistication of our economy, the variety and type of investments options available to us today have multiplied. Also, with the economy getting more and more integrated with the world economy, rapid changes in the options, instruments, rate of return etc. have become the order of the day." Such a change is visible in respect of shares, mutual funds, fixed income, bank deposits, life insurance, pension plans etc. since change and innovation is involved in this process, and one can legitimately expect an exciting and lucrative career scenario in the banking, finance and insurance sector