Customer Perception towards bank service quality in central bank of India.

Summer Project Report

SubmittedIn the partial fulfillment of the Degree of

Master of Business Administration(Finance)

Semester-II

By

Karishma makarani (12)

Under the Guidance of:

(Prof. kedar bhatt)

Centre for Management Studies

(MBA-FINANCE)

Submitted To:

Centre for Management Studies

Ganpat University,

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CERTIFICATE BY THE GUIDE

This is to certify the Mr./Miss karishma makarani m. student of MBA (Specialization) has

satisfactorily completed the Summer Internship Project at central bank of India and submitted the

report titled Customer perception towards bank service quality in central bank of India under my

guidance.

(Prof. kedar bhatt)

Date: Centre for Management Studies

Place: Ganpat University.

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CANDIDATE’S STATEMENT

I hereby declare that the work incorporated in this report titled customer perception towards bank

service quality in central bank of India at completion of Summer Internship Project is the outcome of

my study undertaken by me at central bank of India and it has not been submitted earlier to any other

University or Institution.

Date: (karishma makrani)

Place:

PREFACE

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In the area of rapid industrialization and technological innovation which has made gujrat emerge as

industrial state with newer avenues and opportunities.

As per university norms, it is must for the students of M.B.A.F.S, to prepare a research report on choose

topic study by visiting a particular to a market to acquire practical as well as theoretical knowledge

pertaining to that insurance in different aspects about its internal and external environment.

Our main focus and study was on An in depth study on consumer perceptions towords service quality in

central bank of india which cover the analysis about different, research methodology , which type of

factors should be affect in the consumer perception of service quality research mentioned.

Lastly, we have tried our level best informative report.

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ACKNOWLEDGMENT

It is really a matter of pleasure for me to get an opportunity to thank all the persons who contributed directly or indirectly for the successful completion of the project report, “CUSTOMER PERCEPTION TOWARDS BANK SERVICE QUALITY IN CENTRAL BANK”.

I wish to express my gratitude to the branch manager Mr. MIRDOS MAKARANI of CENTRAL BANK, ANAND for giving me an opportunity to be a part of their esteem organization and enhance my knowledge by granting permission to do a summer training Project. They provided me with their assistance and support whenever needed, which has been instrumental in completion of this project. I am thankful to them, for their support and encouragement throughout the tenure of the project. Also I am thankful to my faculty guide Prof. Kedar bhatt from CENTER FOR MANAGEMENT STUDIES GANPAT UNIVERSITY, for being a source of support during this training period. Last but not the least I am grateful to all the staff members of CENTRAL BANK for their kind cooperation and help during the course of my project.

KARISHMA MAKRANI

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Table of Content

CHAPTER -1

6

CH. No. INDEX PAGE NO.

Title page of project 1

CERTIFICATE FROM COMPANY 2

CERTIFICATE BY FACULTY GUIDE 3

CANDIDATE’S STATEMENT 4

PREFACE 5

ACKNOWLEDGEMENTS 6

1 COMPANY PROFILE 7 to 13

1.1 Introduction

1.2 History

2 SERVICE QUALITY IN BANK 14 to 19

3 LITERATURE REVIEW 20 to 24

4 RESEARCH METHODOLOGY 25 to 27

5 ANALYSIS AND INTERPRETATION 28 to 42

6 FINDINGS 43 to 44

7 CONCLUSION 45 to 46

8 REFERENCE 47 to 49

9 ANNEXURE 50 to 52

COMPANY PROFILE

1.1) Introduction of bank:

Central Bank of India, a government-owned bank, is one of the oldest and largest commercial banks in India. It is based in Mumbai which is the financial capital of India and capital city of state of Maharashtra. The bank has 4600 branches and 4 extension counters across 27 Indian states and three Union Territories. At present, Central Bank of India has overseas office at Nairobi, Hong Kong and a joint venture with Bank of India, Bank of Baroda, and the Zambian government. The Zambian government holds 40 per cent stake and each of the banks has 20 per cent. Recently it has also opened a representative office at Nairobi in Kenya.

Central bank of India is one of 18 Public Sector banks in India to get recapitalisation  finance from the government over the next 24 months.

Central Bank of India has approached the Reserve Bank of India (RBI) for permission to open representative offices in five more locations - Singapore, Dubai, Doha and London.

As on 31 March 2011, the bank's reserves and surplus stood at ₹ 68688 million. Its total business at the end of the last fiscal amounted to ₹ 2, 22,124(approx) million.

1.2) History:-

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It was established on 21 December 1911 by Sir Sorabji Pochkhanawala with Sir Pheroze shah Mehta as Chairman, and claims to have been the first commercial Indian bank completely owned and managed by Indians.

By 1918 it had established a branch in Hyderabad. A branch in nearby Secunderabad followed in 1925.

In 1923, it acquired the Tata Industrial Bank in the wake of the failure of the Alliance Bank of Simla. The Tata bank, established in 1917, had opened a branch in Madras in 1920 that became the Central Bank of India, Madras.

Central Bank of India was instrumental in the creation of the first Indian exchange bank, the Central Exchange Bank of India, which opened in London in 1936. However, Barclays Bank acquired Central Exchange Bank of India in 1938.

Also before World War II, Central Bank of India established a branch in Rangoon. The branch's operations concentrated on business between Burma and India, and especially money transmission via telegraphic transfer. Profits derived primarily from foreign exchange and margins. The bank also lent against land, produce, and other assets, mostly to Indian businesses.

Post-World War II

In 1963, the revolutionary government in Burma nationalized Central Bank of India's operations there, which became People's Bank No. 1.

In 1969, the Indian Government nationalized the bank on 19 July, together with 13 others.

In the 1980s the managers of the London branches of Central Bank of India, Punjab National Bank, and Union Bank of India were caught up in a fraud in which they made dubious loans to the Bangladeshi jute trader Rajender Singh Sethia. The regulatory authorities in England and India forced all three Indian banks to close their London branches.

Central Bank of India was one of the first banks in India to issue credit cards in the year 1980 in collaboration with MasterCard. Central Bank of India announces that the financial results for the year ended 2013-Total Business Rs. 402000 Cr. Net Profit-Rs. 1015 Cr. On 1 August 2013, Central Bank of India appoints new CMD Rajiv Rishi, who was previously ED of Indian Bank and General Manager of OBC and Raj Kumar Goyal as the new ED of the bank. On 1 November of the same year, the bank open its second representative office in Hong Kong.

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MISSION ♦ To transform the customer banking experience into a fruitful and enjoyable one.  ♦ To leverage technology for efficient and effective delivery of all banking services. ♦ To have bouquet of product and services tailor-made to meet customers’ aspirations. ♦ The pan-India spread of branches across all the state of the country will be utilized to further the socio economic objective of the Government of India with emphasis on Financial Inclusion.

VISION

To emerge as a strong, vibrant and pro-active Bank/Financial Super Market and to positively contribute to the emerging needs of the economy through consistent harmonization of human, financial and technological resources and effective risk control systems.

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SWOT Analysis

Strength

1.Large network across India2. Expertise in small and medium enterprise banking3. Active in Government schemes for  agro based and small scale industries4. The bank has 3,500 branches and 270 extension counters across 27 Indian states

Weakness

1. Personal banking in growing stage

2. Less international presence

3. Low advertising and brand presence

Opportunity1.Initiative for self-employment amongst youth2. Favourable Government schemes

Threats

1. Fluctuating economic scenarios2.Highly competitive environment3. Policies of the government

Management - Central Bank

Name Designation

Rajeev Rishi Chairman & Managing Director

B K Divakara Executive Director

Saurabh Garg Nominee Director

Krishan Sethi Part Time Non Official Director

N S Rathnaprabha Part Time Non Official Director

Gurbax Kumar Joshi Workmen Employee Director

Name Designation

R K Goyal Executive Director

R C Lodha Executive Director

Shekhar Bhatnagar Nominee Director

M P Shorawala Part Time Non Official Director

S B Rode Employee Director

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Branches

These are the branches of Central Bank of India:

ANDAMAN & NICOBAR

ANDHRA PRADESH

ARUNACHAL PRADESH

ASSAM

BANKA

BIHAR

CHANDIGARH

CHHATTISGARH

DADRA&NAGAR HAVELI

DAMAN & DIU

DELHI

GOA

GREATER BOMBAY

GUJARAT

HANUMANGARH

HARYANA

HIMACHAL PRADESH

JAMMU & KASHMIR

JHARKHAND

KARNATAKA

KERALA

MADHYA PRADESH

MAHARASHTRA

MANIPUR

MEGHALAYA

MIZORAM

MP

NAGALAND

NALANDA

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ORISSA

PONDICHERRY

PUNJAB

RAJASTHAN

SIKKIM

TAMIL NADU

TRIPURA

UTTAR PRADESH

UTTARAKHAND

UTTARANCHAL

WEST BENGAL

Chapter-2

SERVICE QUALITY IN BANK

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Service with a smile:

Today’s finicky banking customers will settle for nothing less. The customer has come to realize

Somewhat belatedly that he is the king. The customer’s choice of one entity over another as his principal

bank is determined by considerations of service quality rather than any other factor. He wants

competitive loan rates but at the same time also wants his loan or credit card application processed in

double quick time. He insists that he be promptly informed of changes in deposit rates and service

charges and he bristles with customary rage if his bank is slow to redress any grievance he may have. He

cherishes the convenience of impersonal net banking but during his occasional visits to the branch he

also wants the comfort of personalized human interactions and facilities that make his banking

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experience pleasurable. In short he wants financial house that will more than just clear his cheque and

updates his passbook: he wants a bank that cares and provides great services.

So does CENTRAL bank meet these heightened expectations? What are the customers‟ perceptions of

service quality of the banks? Which dimension of service quality of CENTRAL bank is performing

well? A lot of surveys have been done in the past to understand the aspect of customer satisfaction and

to find out the customer friendly banks. My research is conducted to find out “SERVICE QUALITY OF

CENTRAL BANK”.

In the days of intense competition, the banks are no different from any other consumer marketing company. It has become essential for the service firms in general and banks in particular to identify what the customer's requirements are and how those customer requirements can be met effectively. In the days where product and price differences are blurred, superior service by the service provider is the only differentiator left before the banks to attract, retain and partner with the customers. Superior service quality enables a firm to differentiate itself from its competition, gain a sustainable competitive advantage, and enhance efficiency .The benefits of service quality include increased customer satisfaction, improved customer retention, positive word of mouth, reduced staff turnover, decreased operating costs, enlarged market share, increased profitability, and improved financial performance. The construct of service quality has therefore been a subject of great interest to service marketing researchers.

Service quality has been defined by various experts in various ways as: 'Service Quality is the difference between customers' expectations for service performance prior to the service encounter and their perceptions of the service received.' According to Gefan „Service quality is the subjective comparison that customers make between the qualities of service that they want to receive and what they actually get.' Parasuraman says, 'Service quality is determined by the differences between customer's expectations of services provider's performance and their evaluation of the services they received.

Service quality is 'the delivery of excellent or superior service relative to customer expectations‟. Service quality is recognized as a multidimensional construct. While the number of dimensions often varies from researcher to researcher, there is some consensus that service quality consists of three primary aspects: outcome quality, interaction quality, and physical service environment quality. Outcome quality refers to the customer's assessment of the core service which is the prime motivating factor for obtaining the services (e.g. money received from ATM). Interaction quality refers to the customer's assessment of the service delivery process, which is typically rendered via a physical interface between the service provider, in person, or via technical equipment, and the customer. It includes, for instance, the consumer's evaluation of the attitude of the service providing staff. The physical service environment quality dimension refers to the consumer's evaluation of any tangible aspect associated with the facilities or equipment that the service is provided in/ with. It includes, for example, the physical conditions of an ATM machine.

The most popular dimensions of service quality--features five dimensions: tangibles, reliability, responsiveness, empathy, and assurance. The tangibles dimension corresponds to the aforementioned physical environment aspect, the reliability dimension corresponds to the service outcome aspect, and

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the remaining three represent aspects of interaction quality. Both the costs and the revenue of firms are affected by repeat purchases, positive word-of-mouth recommendation, and customer feedback. Moreover, there is strong evidence that service quality has either a direct influence on the behavioral intentions of customers and/or an indirect influence on such intentions, mediated through customer satisfaction. RATER is an instrument that might be used to define and measure banking service quality and to create useful quality-assessment tools.

The RATER may finally provide the following benefits to the central bank:

1. It is the first approach to add and mix the customers‟ religious beliefs and cultural values with other quality dimensions.

2. It provides for multi-faced analysis of customer satisfaction.

3. It links quality with customer’s satisfaction and service encounter.

4. It provides information at several levels, already organized into meaningful groupings.

5. It is a proven approach, which results in usable answers to meet customers’ needs.

6. It is empirically grounded, systematic and well documented. Banks managers can use the RATER model and its dimensions first to identify the following issues:

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RESPONSIVENES

RELIABILITY

ASSURANCE

EMPATHY

TANGIBILIT

DIMENSIONS OF SERVICE QUALITY

TANGIBILITY: This dimension deal with modern looking equipments and visual appealing part of banks.

RELIABILITY: This dimension has a direct positive effect on perceived service quality and customer satisfaction in banking institutions. Banks must provide error free service and secure online transactions to make customers feel comfortable.

RESPONSIVENESS: Customers expect that the banks must respond their inquiry promptly. Responsiveness describes how often a bank voluntarily provides services that are important to its customers. Researchers examining the responsiveness of banking services have highlighted the importance of perceived service quality and customer satisfaction.

ASSURANCE: Customer expects that the bank must be secured and the behaviour of the employees must be encouraging.

EMPATHY: individual attention, customized service and convenient banking hours are very much important in today’s service.

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In order to achieve better understanding of service quality in banking sector, the proposed five service quality dimensions are conceptualized to illustrate the overall service quality of the banking in relation to customers‟ and providers perspective.

Banking was in the sector featuring medium goods and higher customer producer interactions, since in banking, consumers and service providers interact personally and the use of goods is at a medium level. Hence, in banking, where there are high customer-producer interactions, the quality of service is determined to a large extent by the skills and attitudes of people producing the service.

In the case of services, because customers are often either direct observers of the production process or active participants, how the process is performed also has a strong influence on the overall impression of the quality of service. A well-performed service encounter may even overcome the negative impression caused by poor technical quality as well as generate positive word-of-mouth, particularly if customers can see that employees have worked very hard to satisfy them in the face of problems outside their control. Employees are part of the process, which connects with the customer at the point of sale, and hence employees remain the key to success at these service encounters or “moments of truth”. It is these encounters with customers during a service that are the most important determinants of overall customer satisfaction, and a customer’s experience with the service will be defined by the brief experience with the firm’s personnel and the firm’s systems. The rudeness of the bank’s customer service representative, the abruptness of the employee at the teller counter, or the lack of interest of the person at the check deposit counter can alter one’s overall attitude towards the service, perhaps even reversing the impression caused by high technical quality.

Another important service quality factor, competence, is defined by whether the bank performs the service right the first time, whether the employees of the bank tell customers exactly when services will be performed, whether the bank lives up to its promises, whether customers feel safe in their transactions with the bank and whether the employees show a sincere interest in solving the customers‟ problems. In short, this dimension is related to the banks‟ ability to perform the promised service accurately and dependably. Performing the service dependably and accurately is the heart of service marketing excellence. When a company performs a service carelessly, when it makes avoidable mistakes, and when it fails to deliver on promises made to attract customers, it shakes customers‟ confidence in its capabilities and undermines its chances of earning a reputation for service excellence.

It is very important to do the service right the first time. In case a service problem does crop up, by resolving the problem to the customer’s satisfaction, the company can significantly improve customer retention. However, companies fare best when they prevent service problems altogether and fare worst when service problems occur and the company either ignores them or does not resolve them to the customer’s satisfaction.

Performing the service accurately is perhaps the most important factor in service quality excellence. The cost of performing the service inaccurately includes not only the cost of redoing the service but also the cost associated with negative word-of-mouth generated by displeased customers. In case of services, the factory is the field. Again, services are intangible and hence the criteria for flawless services are more subjective than the criteria for defect-free tangible goods. Hence for most services, customers‟ perceptions of whether the service has been performed correctly, and not provider-established criteria, are the major determinants of reliability.

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The service quality factor tangible is defined by whether the physical facilities and materials associated with the service are visually appealing at the bank. These are all factors that customers notice before or upon entering the bank. Such visual factors help consumers form their initial impressions. A crucial challenge in service marketing is that customers cannot see a service but can see the various tangibles associated with it - all these tangibles, the service facilities, equipment and communication materials are clues about the intangible service. If unmanaged, these clues can send to the customer’s wrong messages about the service and render ineffective the marketing strategy of the company. On the other hand, improving quality through tangibles means attention to the smallest details that competitors might consider trivial. Yet, these visible details can add up for customers and signal a message of caring and competence.

Customers may reveal new aspects of service quality in banking that are important to them, and these would have to be incorporated in the scale so as to further explore the concept of service quality in the banking arena.

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CHAPTER - 3

Literature review

“SERVICE” That is “S” stands for “Satisfaction”, “E” stands for “Expectation”, “R” stands for “readiness”, “V” is “Value”, “I” is “Interest”, “C” is “Courtesy” and “E” is “efficiency” (Proomprow,2003).

Service quality has defined as the difference between customer expectations of a service and his/her perception of the service performance. When expectations are not met, customers are dissatisfied with service quality. When expectations match perception, the customer is satisfied with the quality of the service.

Though Robinson (1999) says, "It is apparent that there is little consensus of opinion and much disagreement about how to measure service quality"

Gronroos (1982) described the total service quality as customer’s perception of difference between the expected service and the perceived service.

Asubanteng, Mccleary and Swan (1996) defined service quality as the difference between customer’s expectations for service performance prior to the service encounter and their perception of the service received.

Gefan (2002) defined that service quality as the subjective comparison that customers make between the quality of the service that they want to receive and what they actually get.

Parasuraman, Zeithaml and Berry (1985) defined service quality as the comparison between customer expectation and perception of service. In addition, they suggested three underlying themes after examination of the previous writing and literature on service.

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1) Service quality is more difficult for customer to evaluate than goods quality,2) Service quality perception result from a comparison of consumer expectations with actual

service performance, and3) Quality evaluations are not made solely on the outcome of service; they also involve

evaluation of the process of service process of service delivery.

Service quality has defined as the difference between customer expectations of a service and his/he perception of the service performance. When expectations are not met, customers are dissatisfied with service quality. When expectations match perception, the customer is satisfied with the quality of the service. Finally, when expectations are exceeded, the quality of the service is perceived to be exceptional and moreover, a pleasant surprise. Gronross (1982); Lewis and Booms (1983); Parasuraman et. al., (1985) have stated that SERVQUAL is considered as a common approach for measuring service quality which compares customers' expectations before a service encounter and their perceptions of the actual service delivered. Zeithaml, Berry and Parasuraman (1993) clearly categorize the region the "Zone of tolerance" which is restricted by the adequate expectations at the lower end, that is, what the customer will expect and accept and by the desired expectations at the upper end, that is, what the customers believes should be provided by an excellent organization. The study also measured adequate and desired service quality expectations using the SERVQUAL scale (Parasuraman. Zeithaml and Berry, 1988, 1991). In practice, many studies have found these dimensions difficult to replicate (Carman, 1990; Bouman and Vander Wielde, 1992; Brown, Churchill and Peter, 1993).

Obviously, from a standpoint of best assessment of the measurement of service quality in the service sector should consider customer expectations of service as well as perceptions of service. Though Robinson (1999) says, "It is apparent that there is little consensus of opinion and much disagreement about how to measure service quality", a unique service quality measurement model that has been extensively applied is the SERVQUAL model developed by Parasuraman et al., (1985, 1986, 1988, 1991, 1993, 1994; Zeithaml et al., 1990).

The SERVQUAL instrument has been the predominant method used to measure customers' perceptions of service quality. In principle, SERVQUAL comprises five dimensions: tangibles, responsiveness, reliability, assurance and empathy.(Van Iwaarden et al., 2003), as follows: Tangibles includes physical facilities, equipment and appearance of personnel. Reliability indicates the ability of the service provider to perform the promised service dependably and accurately. Responsiveness means the willingness to help the customers and provide prompt service to them. Assurance includes competence, courtesy, credibility and security of the employees and their ability to inspire trust and confidence. Empathy includes access, communication, understanding the customer by the employees. This will lead to caring and individualized attention that the firm provides to its customers.

Parasuraman, Zeithaml and Berry (1985) have recommended that the customer satisfaction is highly determined by the perception of service quality. This statement establishes that the customer is satisfied with the service if he perceives the service to be of high quality. On the other hand, some others believe that if the customer is satisfied with the service, they

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perceive it to be of high quality. Bitner (1990) and Bolton and Drew (1991) agreed with this view and said satisfaction is antecedent of service quality. This was explained by a theoretical approach "Zone of tolerance", proposed by Zeithaml, Berry and Parasuraman (1993). This model reveals two levels of expectations, one being the desired service level which represents a mixture of what customers believe “can be" and "should be" provided to them (Brown and Swartz, 1989). The other is adequate service, which is the minimum level of service a customer will accept (Woodruf, Cadotte and Jenkins, 1987). The customer satisfaction lies between the two levels of customer service expectations and is known as the "Zone of Tolerance'. Horstmann (1998) says that there is a strong association between customer satisfaction and loyalty. The degree of customer satisfaction determines the loyalty. The higher the degree of satisfaction, the higher is the level of loyalty. A "very satisfied' customer repurchases a product six times more than a "satisfied" customer (Matzler & Hinterhuber, 1998, Hart & Johnson in Gronroos, 2000). However, it is to be noted that the level of satisfaction should not be exceeded much because the customers' expectations will also increase further. This will be an on-going process and this will result in the increase in an increasing trend in the expectations of the customers which automatically results in the increase of service failure risks. Therefore, it is essential that the satisfaction level is increased by minute stepladder to avoid the risk of customers' dissatisfaction in the future. Satisfaction may be influenced by a number of factors, but this study concentrates on the relationship between customer satisfaction and service quality. Quality is whatever the customer perceives it to be (Gronroos, 2000). Therefore, service quality is the result from comparisons made by consumers between their expectations and their perception of the actual service performance [Lewis,(1989) in Bahia and Nantel (2000)].

SERVICE QUALITY IN BANKING

The service quality has been wildly used to assess the service performance of various service organization including banks (Newman, cowling and Leigh, 1998). Joseph, McClure and Joseph (1999) investigated the influence of technology, such as the ATM, telephone, and internet, on the delivery of banking service. Their study identified six underlying dimensions of electronic banking service quality. These dimensions are convenience / accuracy, feedback / complaint management, efficiency, queue management, accessibility and customization.

Bahia and nantel (2000) also proposed an alternative measure of perceived service quality in retail banking that comprises thirty one items with six underlying key dimensions. These dimensions are: effectiveness and assurance, access, price, tangibles, service portfolio and reliability.

The remaining eight dimensions were previously identified by Parauraman et al. (1985). Reliability refers correct service, keep service promise, accurate records and keep promise as advertised. Responsiveness refers prompt service. Competence means ability to solve problems and knowledge to answer questions. Courtesy include address complaints friendly and consistency courtesy. Credibility means confidences in the bank service good reputation. Access includes availability for help, ATM access, phone access. E-mail access, account access when going abroad. Communication means clear answer, informing customer of important information and availability of status of truncations. Understanding of customer means

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personal attention. Collaboration includes external collaboration and internal collaboration. Continuous improvement includes continuous improvement on online systems, continuous improvement on banking products and continuous improvement on services. Jun and Cai (2001) identified three broad conceptual categories related to internet banking service quality:

1. Customer service quality; there are ten dimensions as following: reliability, responsiveness, competence, courtesy, credibility, access, communication, understanding the customer, collaboration and continuous improvement. The two dimensions, collaboration improvement are found as new dimensions for internet banking.

2. Online systems quality: six dimensions are contents, accuracy, ease of use, timelines, aesthetics and security.

3. Banking service product quality has only one dimension, product variety / diverse feature.

SERVICE QUALITY DIMENSIONS

Bayel & Janalgie (1994) had set their goals of services quality dimensions in Retail Banking. First the study investigates & identifies the services quality dimensions pertaining to financial services. Secondly, it examines the relationship between perception accorded to these dimensions & the overall attitude towards the banking. Thirdly, it examines the important discrimination in service quality factors among the different group of banks by paired comparison.

Accounting to Parasuraman et al.’s (1985), ten detailed dimensions of service quality through focus group studies are listed as: reliability, responsiveness, competence, access, courtesy, communication, credibility, security, competence, understanding the customer and tangibles. Among these ten service quality determinates, reliability is the most important dimension. Detailed explanation will be described below.

Reliability: It means that the firm performs the service right the first time and the firm honours its promises.

Responsiveness: It concerns the willingness or readiness of employees of employees to provide service.

Tangibles: It includes the physical evidence of the services. (Parasuranman et.al., 1985)

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CHAPTER: 4

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RESERCH METHODOLOGY

Reserch objective:-

To Study of perception about service quality offered by bank.

To know in which service quality dimension the bank is performing well and in which dimension it needs improvement.

Research Design:-

1. Type Of Research :-

A. Exploratory Research

B. Conclusive Research

A. Method for conducting Exploratory Research :-

Primary Data:

The primary data was collected by means of a survey. Questionnaires were prepared and customers of the banks at two branches were approached to fill up the questionnaires. The questionnaire contains 20 questions which reflect on the type and quality of services provided by the banks to the customers. The response of the customer and the is recorded on a grade scale of strongly disagree, disagree, uncertain, agree and strongly agree for each question. The filled up information was later analyzed to obtain the required interpretation and the findings.

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Secondary Data:

In order to have a proper understanding of the service quality of bank a depth study was done from the

various sources such as books, a lot of data is also collected from the official websites of the banks and

the articles from various search engines like Google, yahoo search and answers.com.

(II) Qualitative Research:-

Direct Method

- In-Depth Interview

B. Method for conduction conclusive research:-

(I) Descriptive Research

Cross Sectional

Single Cross Sectional

(II) Method for conducting:-

Survey

Target population:

I. Target population:

All customers of CENTRAL BANK

II Sampling Element:

Customers of CENTRAL BANK

III Sample size:

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Since the population is large the survey has been carried among a sample of 100 customers of central bank.

IV. Sampling method:

Convenience method

C. Data Analysis Technique:

One sample t-test

Descriptive research

Anova

Data Collection Tool:- Questionnaire

Chapter: 5

Data Analysis and Interpretation

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1) What is your gender?

Gender

Frequency Percent Valid Percent Cumulative

Percent

Valid

male 53 53.0 53.0 53.0

female 47 47.0 47.0 100.0

Total 100 100.0 100.0

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Interpretation

Out of 100 samples, which male respondents are 53% and female are 47%.

2) What age group do you belong to

Age

Frequency Percent Valid Percent Cumulative

Percent

Valid 16-25 39 39.0 39.0 39.0

26-35 28 28.0 28.0 67.0

36-45 22 22.0 22.0 89.0

above 45 11 11.0 11.0 100.0

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Total 100 100.0 100.0

Interpretation:-

From the table and graph above it can be seen that 39% respondent’s age are 16 to 25 years.

28% respondent’s age are 26 to 35 years.

22% respondent’s age are 36 to 45 years..

11% respondent’s age are above 45 years.

What is the highest degree or level of education you have completed?

education

Frequency Percent Valid Percent Cumulative

Percent

Valid high school 19 19.0 19.0 19.0

30

graduate 47 47.0 47.0 66.0

post graduate 25 25.0 25.0 91.0

other 9 9.0 9.0 100.0

Total 100 100.0 100.0

Interpretation:-

From the table above it can be seen that. 19% respondents are high school , 47% respondents are Graduate, 25% respondents are Post graduate, 9% respondents are other.

4) What is your occupation?

occupation

Frequency Percent Valid Percent Cumulative

Percent

Valid student 26 26.0 26.0 26.0

business 23 23.0 23.0 49.0

private job 23 23.0 23.0 72.0

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govt. job 16 16.0 16.0 88.0

other 12 12.0 12.0 100.0

Total 100 100.0 100.0

Interpretation:-

Out of 100 samples 26% respondents were from student, 23% respondents were from business, 23%

respondents were from self-private job, 16% respondents were from Govt job, 12% respondents were

from other

4) What is your yearly income?

income

Frequency Percent Valid Percent Cumulative

Percent

Valid <2 lakh 21 21.0 21.0 21.0

2.1 to 5 lakh 18 18.0 18.0 39.0

5.1 to 10 lakh 21 21.0 21.0 60.0

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above 10.1 lakh 12 12.0 12.0 72.0

not applicable 28 28.0 28.0 100.0

Total 100 100.0 100.0

Interpretation:-

Out of 100 samples 21% respondents are having a <2 lakh yearly income, 18% respondents are having

2.1 to 5 lakh, 21% respondents are having 5.1 to 10 lakh, 12% respondents are having above 10.1

lakh, 28% respondents are not applicable

Descriptive statistics for service quality variable.

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

modern_looking_equipment 100 1.00 5.00 3.2000 .84087

physical_features_appealing 100 1.00 5.00 3.0000 1.00504

employee_neat_appearing 100 1.00 5.00 2.9200 1.03162

33

materials_appealing 100 1.00 5.00 3.2700 .98324

certain_time 100 1.00 5.00 2.6800 1.04330

solving_problem 100 1.00 5.00 3.0200 1.08227

service_right_first_time 100 1.00 5.00 3.0600 1.06192

error_free_records 100 1.00 5.00 3.1000 1.13262

exactly_service_performed 100 1.00 33.00 3.3200 3.19052

prompt_service 100 1.00 5.00 3.2800 1.10170

always_helping 100 1.00 5.00 2.9400 1.19612

prompt_repond 100 1.00 5.00 2.9800 1.13689

trust_worthy 100 1.00 5.00 2.9900 1.16771

behaviour_of_employee 100 1.00 5.00 2.9700 1.28279

safe_transaction 100 1.00 5.00 3.2300 1.08110

knowledge_to_your_questio

n

100 1.00 5.00 3.1200 1.22499

individual_attention 100 1.00 5.00 3.0600 1.26985

operating_hour_to_customer

s

100 1.00 5.00 2.9000 1.09637

best_intrest_at_heart 100 1.00 5.00 2.8600 1.16359

understand_specific_needs 100 1.00 5.00 2.8800 1.19155

Valid N (listwise) 100

34

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

modern_looking_equipment 100 3.2000 .84087 .08409

physical_features_appealing 100 3.0000 1.00504 .10050

employee_neat_appearing 100 2.9200 1.03162 .10316

materials_appealing 100 3.2700 .98324 .09832

certain_time 100 2.6800 1.04330 .10433

solving_problem 100 3.0200 1.08227 .10823

service_right_first_time 100 3.0600 1.06192 .10619

error_free_records 100 3.1000 1.13262 .11326

exactly_service_performed 100 3.3200 3.19052 .31905

prompt_service 100 3.2800 1.10170 .11017

always_helping 100 2.9400 1.19612 .11961

prompt_repond 100 2.9800 1.13689 .11369

trust_worthy 100 2.9900 1.16771 .11677

behaviour_of_employee 100 2.9700 1.28279 .12828

safe_transaction 100 3.2300 1.08110 .10811

knowledge_to_your_questio

n

100 3.1200 1.22499 .12250

individual_attention 100 3.0600 1.26985 .12699

operating_hour_to_customer

s

100 2.9000 1.09637 .10964

best_intrest_at_heart 100 2.8600 1.16359 .11636

understand_specific_needs 100 2.8800 1.19155 .11916

35

One-Sample Test

Test Value = 3

t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the

Difference

Lower Upper

modern_looking_equipment 2.378 99 .019 .20000 .0332 .3668

physical_features_appealing .000 99 1.000 .00000 -.1994 .1994

employee_neat_appearing -.775 99 .440 -.08000 -.2847 .1247

materials_appealing 2.746 99 .007 .27000 .0749 .4651

certain_time -3.067 99 .003 -.32000 -.5270 -.1130

solving_problem .185 99 .854 .02000 -.1947 .2347

service_right_first_time .565 99 .573 .06000 -.1507 .2707

error_free_records .883 99 .379 .10000 -.1247 .3247

exactly_service_performed 1.003 99 .318 .32000 -.3131 .9531

prompt_service 2.542 99 .013 .28000 .0614 .4986

always_helping -.502 99 .617 -.06000 -.2973 .1773

prompt_repond -.176 99 .861 -.02000 -.2456 .2056

trust_worthy -.086 99 .932 -.01000 -.2417 .2217

behaviour_of_employee -.234 99 .816 -.03000 -.2845 .2245

safe_transaction 2.127 99 .036 .23000 .0155 .4445

knowledge_to_your_question .980 99 .330 .12000 -.1231 .3631

individual_attention .472 99 .638 .06000 -.1920 .3120

operating_hour_to_customers -.912 99 .364 -.10000 -.3175 .1175

best_intrest_at_heart -1.203 99 .232 -.14000 -.3709 .0909

understand_specific_needs -1.007 99 .316 -.12000 -.3564 .1164

36

As shown in table, the significance level for modern equipment is less than .05. Thus, the mean

score of perception for modern equipment is significantly greater than 3. And customer

perception for this variable is good.

As shown in table, the significance level for physical_features_appealing is greater than .05.

Thus, the mean score of perception for physical_features_appealing is significantly 3. And

customer perception for this vari.

As shown in table, the significance level for physical_features_appealing is greater than .05.

Thus, the mean score of perception for physical_features_appealing is significantly less than 3.

And customer perception for this variable is not so good.

As shown in table, the significance level for materials_appealing is less than .05. Thus, the mean

score of perception for materials_appealing is significantly greater than 3. And customer

perception for this variable is good.

As shown in table, the significance level for certain_time is less than .05. Thus, the mean score

of perception for certain_time is significantly less than 3. And customer perception for this

variable is not so good.

As shown in table, the significance level for solving_problem is greater than .05. Thus, the mean

score of perception for solving_problem is significantly greater than 3. And customer perception

for this variable is good.

As shown in table, the significance level for service_right_first_time is greater than .05. Thus,

the mean score of perception for service_right_first_time is significantly greater than 3. And

customer perception for this variable is good.

As shown in table, the significance level for error_free_records is greater than .05. Thus, the

mean score of perception for error_free_records is significantly greater than 3. And customer

perception for this variable is good.

As shown in table, the significance level for exactly_service_performed is greater than .05. Thus,

the mean score of perception for exactly_service_performed is significantly greater than 3. And

customer perception for this variable is good.

As shown in table, the significance level for prompt_service is less than .05. Thus, the mean

score of perception for prompt_service is significantly greater than 3. And customer perception

for this variable is good.

As shown in table, the significance level for always_helping is greater than .05. Thus, the mean

score of perception for always_helping is significantly less than 3. And customer perception for

this variable is not so good.

37

As shown in table, the significance level for prompt_repond is greater than .05. Thus, the mean

score of perception for prompt_repond is significantly less than 3. And customer perception for

this variable is not so good.

As shown in table, the significance level for trust_worthy is greater than .05. Thus, the mean

score of perception for trust_worthy is significantly less than 3. And customer perception for this

variable is not so good.

As shown in table, the significance level for behaviour_of_employee is greater than .05. Thus,

the mean score of perception for behaviour_of_employee is significantly less than 3. And

customer perception for this variable is not so good.

As shown in table, the significance level for safe_transaction is less than .05. Thus, the mean

score of perception for safe_transaction is significantly greater than 3. And customer perception

for this variable is good

As shown in table, the significance level for knowledge_to_your_question is greater than .05.

Thus, the mean score of perception for knowledge_to_your_question is significantly greater than

3. And customer perception for this variable is good

As shown in table, the significance level for individual_attention is greater than .05. Thus, the

mean score of perception for individual_attention is significantly greater than 3. And customer

perception for this variable is good

As shown in table, the significance level for operating_hour_to_customers is greater than .05.

Thus, the mean score of perception for operating_hour_to_customers is significantly less than 3.

And customer perception for this variable is not so good

As shown in table, the significance level for best_intrest_at_heart is greater than .05. Thus, the

mean score of perception for best_intrest_at_heart is significantly less than 3. And customer

perception for this variable is not so good

As shown in table, the significance level for understand_specific_needs is greater than .05. Thus,

the mean score of perception for understand_specific_needs is significantly less than 3. And

customer perception for this variable is not so good

ANOVA:

38

TO study impact of demographic variables on service quality dimension.

Age:-

ANOVA

Sum of Squares df Mean Square F Sig.

Tangible

Between Groups 1.117 3 .372 1.375 .255

Within Groups 25.995 96 .271

Total 27.112 99

Reliability

Between Groups 1.310 3 .437 1.535 .211

Within Groups 27.317 96 .285

Total 28.628 99

responsiveness

Between Groups .436 3 .145 .116 .950

Within Groups 120.124 96 1.251

Total 120.560 99

assurance

Between Groups 1.257 3 .419 .897 .446

Within Groups 44.830 96 .467

Total 46.087 99

Empathy

Between Groups .347 3 .116 .292 .831

Within Groups 38.090 96 .397

Total 38.438 99

H0= There is no difference in perception towards service quality dimensions between different age

groups

H1= There is difference in perception towards service quality dimensions between different age

groups

As shown in above table significance value for 5 dimensions, empathy and tangible reliability

assurance and empathy is greater than 0.05 so null hypothesis is accepted, and there is no

significant difference in perception towards these dimensions between different age groups.

Education:-

39

ANOVA

Sum of Squares df Mean Square F Sig.

Tangible

Between Groups 3.350 3 1.117 4.511 .005

Within Groups 23.762 96 .248

Total 27.112 99

Reliability

Between Groups 1.012 3 .337 1.173 .324

Within Groups 27.616 96 .288

Total 28.628 99

responsiveness

Between Groups 1.087 3 .362 .291 .832

Within Groups 119.473 96 1.245

Total 120.560 99

assurance

Between Groups 2.000 3 .667 1.452 .233

Within Groups 44.087 96 .459

Total 46.087 99

Empathy

Between Groups 3.086 3 1.029 2.793 .044

Within Groups 35.352 96 .368

Total 38.438 99

H0= There is no difference in perception towards service quality dimensions between different

education groups.

H1= There is difference in perception towards service quality dimensions between different

education groups

As shown in above table significance value for 2 dimensions, empathy and tangible is less than

0.05 so alternative hypothesis is accepted, and there is significant difference in perception

towards these dimensions between different education groups

40

Occupation:-

H0= There is no difference in perception towards service quality dimensions between different

occupation groups.

H1= There is difference in perception towards service quality dimensions between different

occupation groups

As shown in above table significance value for 2 dimensions reliability and tangible is less than

0.05 so alternative hypothesis is accepted, there is significant difference in perception towards

these dimensions between different occupation groups.

41

ANOVA

Sum of Squares df Mean Square F Sig.

Tangible

Between Groups 5.667 4 1.417 6.276 .000

Within Groups 21.445 95 .226

Total 27.112 99

Reliability

Between Groups 2.964 4 .741 2.743 .033

Within Groups 25.664 95 .270

Total 28.628 99

Responsiveness

Between Groups 3.820 4 .955 .777 .543

Within Groups 116.740 95 1.229

Total 120.560 99

Assurance

Between Groups 2.795 4 .699 1.533 .199

Within Groups 43.292 95 .456

Total 46.087 99

Empathy

Between Groups .465 4 .116 .291 .883

Within Groups 37.972 95 .400

Total 38.438 99

INCOME:-

ANOVA

Sum of Squares Df Mean Square F Sig.

Tangible

Between Groups .882 4 .221 .799 .529

Within Groups 26.229 95 .276

Total 27.112 99

Reliability

Between Groups 1.908 4 .477 1.696 .157

Within Groups 26.719 95 .281

Total 28.628 99

Responsiveness

Between Groups 8.207 4 2.052 1.735 .149

Within Groups 112.353 95 1.183

Total 120.560 99

Assurance

Between Groups .515 4 .129 .268 .898

Within Groups 45.572 95 .480

Total 46.087 99

Empathy

Between Groups 1.402 4 .350 .899 .468

Within Groups 37.036 95 .390

Total 38.438 99

H0= There is no difference in perception towards service quality dimensions between different

income groups.

H1= There is difference in perception towards service quality dimensions between different

income groups

As shown in above table significance value for 5 dimensions, empathy and tangible reliability

assurance and empathy is greater than 0.05 so null hypothesis is accepted there is significant

difference in perception towards these dimensions between different income groups .

42

CHAPTER: 6

FINDINGS:

43

The aim of this study was to investigate factors that affect quality of customer’s service in banking

industry. From the findings the following was established. On gender analysis, most of the respondents

were male representing a total of 57% and female 43%. The age level of majority of the respondents

who are having an account in Central Bank of India bank fall under the age level 16 to 25 year. The

income level of majority of the respondents who are having an account in central bank of India bank fall

under the monthly income level < 2 lakh and 5.1 to 10 lakh. Some of the respondents choose the Central

Bank of India because the bank is providing more good facility to the customers. From the anova on age

analysis, of significant level is greater than 0.05 so that there is no significant impact of education on

empathy and tangibles, reliability,assurance and empathy. On education Analysis, 2 dimension empathy

and tangible value is less than 0.05 , there is significant impact of 2 dimension. On occupation analysis

dimension tangible and reliability value is less than 0.05 there is significant impact of 2 dimension.on

income analysis, that the value of significant level is greater than 0.05 there is no significant impact of

education on empathy and tangibles, reliability,assurance and empathy.

44

Chapter: 7

Conclusion

45

Service quality has defined as the difference between customer expectations of a service and his/her

perception of the service performance. When expectations are not met, customers are dissatisfied with

service quality. When expectations match perception, the customer is satisfied with the quality of the

service. From the preceding discussion it is clear that the banks in the post-liberalised phase of the

Indian economy have, to a large extent, matched the graph of customer perceptions and expectations

from each of the two. Further, as the study shows, quality parameters such as responsiveness, reliability,

tangibles, assurance and empathy greatly structure customers' expectations and perceptions of banking

sector service quality. They found that the elements that were considered important were reliability,

assurance, empathy and responsiveness.

. The purpose of my study is customer perception towards bank service quality in

central bank of india”. In my project I used research design was exploratory and Conclusive Research

Design type was Descriptive Research. In descriptive research I used single cross – section design .in

my research I used convenience sampling design. I used structure Questionnaire with 5 point likerd

scale, primary date collected from 100 respondents by personal meeting with the help of questioners,

secondary data: secondary data are collected from the website , news paper and previous research paper.

On gender analysis, most of the respondents were male representing a total of 57% , I used analysis

technique like discriptive,frequency distribution, one way anova in my research.

46

Reference:-

1) Ganesh P et. al. (2011) Determining the gap between customer Expectation and perception In

retail Banking

2) Er.Vishal Mohan Goyal (2011) Customer perception towards Internet banking w.r.f to private

and foreign banks in India

3) Praful S. Gudadhe (2013) Customer Perception Towards Products and Services Of State Bank of

India- With Special Reference to Yavatmal District, (M.S.) India

4) MALIKA RANI (2012) A STUDY ON THE CUSTOMER PERCEPTION TOWARDS E-

BANKING IN FEROZEPUR DISTRICT

5) YAP SHEAU FEN et al.(2000) SERVICE QUALITY AND CUSTOMER SATISFACTION:

ANTECEDENTS OF CUSTOMER’S RE-PATRONAGE INTENTIONS

6) Khushbu Agarwal et al. (2014) AN EMPIRICAL STUDY ON CUSTOMER SERVICES OF

SELECTED PRIVATE SECTOR BANKS WITH SPECIAL REFERENCE TO UDAIPUR

CITY

7) Dr. H. S. Sandhu et al. (2011) Customers’ Perception towards Service Quality of Life Insurance

Corporation of India: A Factor Analytic Approach

8) Jayaraman Munusamy et al. (2010) Service Quality Delivery and Its Impact on Customer

Satisfaction in the Banking Sector in Malaysia

9) Dima Al Eisawi (2012) Innovation as a Determinant for Service Excellence in Banking

10) Dr. M. Selvaraj (2012) Customer Perception towards service Quality in State Bank of India – An

Empirical Study

11) Shailesh Limbad (2013) Study the Customers’ Perception towards Banking Services: A

Research Report on Indian Public Sector Banks

47

12) Evelyn Omanukwue (2010) CUSTOMER PERCEPTION OF SERVICE QUALITY IN

BOUTIQUE HOTEL LE SIX PARIS

13) Lo Liang Kheng et. Al.(2013) The Impact of Service Quality on Customer Loyalty: A Study of

Banks in Penang, Malaysia

14) Mei Mei Lau et al.(2013) Measuring Service Quality in the Banking Industry: A Hong Kong

Based Study

15) Barbara R. lawis(1991)Service Quality: An International Comparison of Bank Customers'

Expectations and Perceptions

16) Mesay Sata Shanka (2012) Bank Service Quality, Customer Satisfaction and Loyalty in

Ethiopian Banking Sector

17) Rashed Al Karim et.Al.(2014) CUSTOMER SATISFACTION ON SERVICE QUALITY IN

PRIVATE COMMERCIAL BANKING SECTOR IN BANGLADESH

18) Ms. Linda Mary Simon (2012) A Study on Customer Perception Towards Services Provided By

Public Sector Bank and Private Sector Bank

19) Arpita Khare (2011) Customers’ perception and attitude towards service quality in multinational

banks in India

20) Ms. Fozia (2013) A Comparative Study of Customer Perception toward E-banking Services

Provided By Selected Private & Public Sector Bank in India

21) Rajesh Kumar Srivastava (2007) Customer’s perception on usage of internet banking

22) Dr. Catherine Rossiter (2010) Customer’s perception of service quality in the commercial

banking sector of Nigeria:

23) Sarika Bindal et al.(2014) SERVICE QUALITY DIMENSIONS IN INDIAN BANKING

SECTOR (A STUDY OF HDFC BANK)

24) Vijay Kumbhar (2011) Factors a ecting on customers’ satisfaction an empirical investigation offf

ATM service.

25) RAJDEEP SINGH et al.(2010) SERVQUAL and Model of Service Quality Gaps: A Framework for Determining and Prioritizing Critical Factors from Faculty Perspective in Higher Education

26) Ali Dehghan(2013) Service Quality & Loyalty: A Review

27) A. Parasuraman et al.(1985)Conceptual Model of Service Quality and Its Implications for Future

Research

Dr. Arash Shahin (2012) SERVQUAL and Model of Service Quality Gaps: A Framework for

Determining and Prioritizing Critical Factors in Delivering Quality Services

48

28) Lord William Thomson Kelvin (1907) An Assessment of Service Quality in Banks.

29) Dr. Yassin Ibrahim et al.(2015) Analysis of Factors Affecting Service Quality: A Survey Study

in Bank of Abyssinia Alula Abanega Branch, Mekelle Ethiopia

30) RAM R. BISHU (2006) Service Quality: A Case Study of a Bank

49

QUESTIONNAIRE

Respected Sir/Madam

I am student of GANPAT UNIVERSITY, conducting a survey on “CUSTOMER PERCEPTION TOWARDS SERVICE QUALITY IN CENTRAL BANK OF INDIA”. The following statements relate to your feelings about the CENTRAL bank. Please show the extent to which you believe CENTRAL bank has the feature described in the statement. I request you to √ the option which in your opinion are believed to be true.

1) What is your name?…………….

2) What is your gender?

[ ] Male [ ] Female

3) What age group do you belong to?[ ] 16-25 [ ] 26-35[ ] 36-45 [ ] Above 45

4) What is the highest degree or level of education you have completed?[ ] High school [ ] Graduate[ ] Post graduate [ ] other

5) What is your occupation?[ ] Student [ ] business [ ] Private Job. [ ] Govt. Job[ ] other

6) What is your yearly income?

[ ] < 2 Lakh [ ] 2.1 to 5 Lakh[ ] 5.1 to 10 Lakh [ ] Above 10.1 Lakh[ ] not applicable

50

7) Following are the factors that you might have considered while service quality in central bank of India. Please rate the factors that you had considered on the scale below. Below number 1 is strongly disagree, 2 is disagree, 3 is neutral, 4 is agree and 5 is strongly agree

QUESTIONS Strongly Disagree

Disagree Neither agree Nor disagree

Agree Strongly Agree

1.CENTRAL bank has modern looking Equipment.

2. The bank's physical features are visually appealing

3. The bank's reception desk employees are Neat appearing.

4. Materials associated with the service (such as pamphlets or statements) are visually appealing at the bank.

5. When the bank promises to do something by a certain time, it does so.

6. When you have a problem, the bank shows a sincere interest in solving it.

7. The bank performs the service right the first time.

8. The bank insists on error free records.

9. Employees in the bank tell you exactly when the services will be performed.

10. Employees in the bank give you prompt service.

11. Employees in the bank are always willing to help you.

12. Employees in the bank are never too busy to respond to your request.

13. The employees of the bank are Trust worthy.

14. The behavior of employees in the bank

51

Instills confidence in you.

15. You feel safe in your transactions with the bank.

16. Employees in the bank have the knowledge to answer your questions.

17. The bank gives you individual attention.

18. The bank has operating hours convenient to all its customers

19. The bank has your best interests at heart.

20. The employees of the bank understand your specific needs.

52