Service Quality in Banking Sector-India

THESIS
SUBMITTED TO THE
UNIVERSITY OF LUCKNOW
FOR THE AWARD OF THE DEGREE OF
Doctor Of Philosophy
IN
BUSINESS ADMINISTRATION
By
Ms Rakhi Sonkar
Under the Supervision of

Dr. Mohammad. Anees
DEPARTMENT OF BUSINESS ADMINISTRATION

UNIVERSITY OF LUCKNOW
LUCKNOW (INDIA)
TO WHOM IT MAY CONCERN
This is to certify that the research work entitled “Service Quality Measurement
in Banking Industry With Reference To Uttar Pradesh” submitted by me for
the award of ‘Doctor of Philosophy in Business Administration’ at University of
Lucknow, Uttar Pradesh, represents my original work and no part of this thesis has
been submitted for any degree or diploma.
The assistance sought from different sources during the course of this investigation
has been duly acknowledged.
Date: Rakhi Sonkar

CERTIFICATE
This is to certify that the research work entitled “Service Quality Measurement
in Banking Industry With Reference To Uttar Pradesh” submitted by Rakhi
Sonkar for the award of ‘Doctor of Philosophy in Business Administration’ at
University of Lucknow, Uttar Pradesh, is a record of bonafide research work
carried out by her.
Rakhi Sonkar has worked under my guidance and supervision for the submission
of this thesis which in my opinion is of requisite standard.
This research work or any part thereof has not been submitted to any other
University or Institute for the award of any other Degree or Diploma
Date: Dr. Mohammad Anees

ACKNOWLEDGEMENT
I am extremely grateful to my supervisor Dr. Mohammad. Anees, Assistant

Professor, Department of Business Administration, University of Lucknow for his
valuable guidance, motivation and continuous support throughout the research
work of my present thesis. His generous efforts are beyond my appreciation.
I am especially thankful to my parents, my husband and in-laws who have helped

and motivated me to do this research work.
I am grateful to Prof. A. K. Chatterjee, Head of the Department of Business

Administration Dean Faculty of commerce for his constant guidance and support.
I would also like to acknowledge Prof. J. K. Sharma, former Head of the

Department of Business Administration, Sanjay Medhavi, Associate Professor,
and all the faculty members of Department of Business Administration, University
of Lucknow for suggesting me different ideas, concepts, methods and techniques
for enriching my research work.
I also wish to convey my thanks to Dr. Ashish Sonker for performing the statistical
tests on primary data obtained by field survey. It helped me analyze, interpret
conclude, suggest and perform all other research work required to complete the
present thesis.
At last but not the least all my friends, the research scholars and the staff of the
Department of Business Administration deserve my acknowledgment for directly
or indirectly helping me throughout my research work.
Rakhi Sonkar
PREFACE
Service Quality Measurement in Banking Industry With Reference To Uttar

Pradesh
The idea generated through the customers concern towards banking services in
India special reference to Uttar Pradesh. Banking sector is growing as the
competition and technology is advancing. Banks today are more focused towards
services which attract and retain customers. Banks need service quality
management as the number of retail bank branches has increased. In the present
competitive business environment commercial Banks in the public as well private
sector are mainly concerned to the expectations/Perception/Satisfaction of their
customers for multiple banking services.
This study focuses on studying the service quality provided by Indian Banks in
state of Uttar Pradesh. The study focuses on various factors that influence service
quality in banks. The study focuses on Service quality assessment in banks
provided by public sector as well as private sector banks in Uttar Pradesh.
The thesis is organized into six chapters and Annexure as follows:
Chapter 1- Introduction: Services are the major contributing factor to Indian

Economy. This chapter focuses on the need of service quality in banking in India
special reference to Uttar Pradesh and the customer service quality expectation and
perception leading to satisfaction. In this chapter services are defined classified by
various service management workers, researchers. Indian Banking Industry has
been discussed. Researchers view about service, quality, service quality, Servqual
has been reviewed.
Chapter 2- Literature Review: This chapter reviews about the services, service
quality in banking, customer expectation/customer perception/satisfaction in
banking assessed, measured, evaluated by Kumbhar, Shahin, Zeithaml, Lovelock,
Parasuraman, Berry, Ham, MohanaRao, Gronroos, Cronin and Taylor.
Chapter 3-: Service quality management in banks: This chapter reviews about
service quality management in Indian banks in Uttar Pradesh. Banks like ICICI
bank, HDFC bank, as private sector banks and SBI and Allahabad bank as public
sector bank providing service quality to customer has been reviewed.
Chapter 4- Research Design and Methods: This section explains the different
methods adopted in collecting the primary as well as secondary data and further
tools and techniques used to analyze it. This section also explains the different
research hypothesis tested during research study.
Chapter 5- Data Analysis: This section is concerned with analysis of the collected
data & their subsequent tests revealing the acceptance or rejection of null
hypothesis.
Chapter 6-Findings and Discussion: This chapter reveals findings and discussions
of each analysis.
Chapter 7- Conclusions: This chapter draws conclusions from the analysis.
Chapter 8: Recommendation and suggestions:This chapter concludes with

suggestions to the researchers for future improvements.
Chapter 9: Limitation of study: This section discloses the areas for future studies
not included in this research work.
References
Annexure A-A sample copy of Questionnaire

CONTENTS
CERTIFICATE
ACKNOWLEDGEMENT
PREFACE
1. INTRODUCTION 1-29
2. LITERATURE REVIEW 30-55
3. SERVICE QUALITY MANAGEMENT IN BANKS 56-78
4. RESEARCH DESIGN & METHODS 79-82
5. DATA ANALYSIS 83-200
6. FINDINGS AND DISCUSSION 201-207
7. CONCLUSION 208-210
8. RECOMMENDATION AND SUGGESTION 211-212
9. LIMITATION OF STUDY 213
REFERENCES 214-247
ANNEXURE A-A SAMPLE COPY OF QUESTIONNAIRE 248-256

Figure List
S.No. Figure Name Page No.
1 Continual quality improvement 10
2 A Strategic view of service Operations Management 11

Competence Model
3 Deming-PDCA-CYCLE 13
4 The Juran’s Trilogy 16
5 Histogram of 3 sigma process 17
6 Histogram of 6 sigma process 17
7 Eight Dimension of Quality-D. Garvin, 1986 20
8 QFD 22
9 House of Quality 23
10 The Cost of Poor Quality 24
11 Breadth of service offering 29

Chart List
S. No. Chart Name Page No.
1. Relative Gap scores 87
2. Age Distribution 166
3. Education Qualification Distribution 167
4. Occupation wise Distribution 168
5. Income wise Distribution 169
6. Gender wise Distribution 170
7. Bank wise Distribution 171
8. Mean of modern looking equipment-Banks 179
9. Mean of Physical facilities-Banks 180
10. Mean of neat appearing-Banks 181
11. Mean of material associated with service visually-Banks 182
12. Mean of promise to do at said time-Banks 183
13. Mean of sincere interest in solving problem-Banks 184
14. Mean of perform the service right –Banks 185
15. Mean of service at right time they promise –Banks 186
16. Mean of insist on error –Banks 187
17. Mean of tell customers exactly –Banks 188
18. Mean of prompt service to customers –Banks 189
19. Mean of willing to help customers –Banks 190
20. Mean of employees never show to busy –Banks 191

S. No. Chart Name Page No.
21. Mean of employees behave instill confidence –Banks 192
22. Mean of customers feel safe in transaction –Banks 193
23. Mean of employees are courteous with customers –Banks 194
24. Mean of employees have knowledge to answer –Banks 195
25. Mean of customers get individual attention –Banks 196
26. Mean of bank operating hours –Banks 197
27. Mean of employees give personal attention –Banks 198
28. Mean of bank will have interest –Banks 199
29. Mean of employees will understand specific needs –Banks 200

S.No. Table Name Page No.
1. Mean Scores and standard deviation (Perception) 83
2. Mean Scores and standard deviation (Expectation) 88
3. Reliability test-Tangibility dimension 91
4. Inter-Item Correlation Matrix- Tangibility dimension 93
5. Summary Item Statistics 95
6. Item Statistics-Reliability dimension 96
7. Inter-Item Correlation Matrix-Reliability 98
9. Reliability Statistics-Responsibility 101
10. Inter-Item Correlation Matrix-Responsibility 103
12. Reliability Statistics-Assurance 106
13. Inter-Item Correlation Matrix-Assurance 108
15. Reliability Statistics-empathy 111
16. Inter-Item Correlation Matrix-Empathy 113
17. KMO and Bartlett's Test-tangibility 116
18. KMO and Bartlett's Test-Reliability 117
19. KMO and Bartlett's Test-Responsibility 117
20. KMO and Bartlett's Test-Assurance 118
21. KMO and Bartlett's Test-Empathy 118

22. Tangibility-Communalities 119
23. Total Variance Explained 120
24. Component Matrix(a) 120
25. Rotated Component Matrix(a) 121
26. Reliability-Communalities 122
29. Responsibility-Communalities 125
32. Communalities- Assurance 128
35. Communalities- Empathy 131
38. Descriptive Statistics (Perception) 134
39. Descriptive Statistics-Tangibility 137
40. Descriptive Statistics-Reliability 138
41. Descriptive Statistics-Responsiveness 139
42. Descriptive Statistics-Assurance 140
43. Descriptive Statistics-Empathy 141

45. Cross-tabulation: Bank * modern looking equipment 144
46. Cross-tabulation: Bank * physical facilities 145
47. Cross-tabulation: Bank * neat appearing 146
48. Cross-tabulation: Bank * material associated with the 147

service visually appealing
49. Cross-tabulation: Bank * promise to do at said time 148
50. Cross-tabulation: Bank * sincere interest in solving 149

problem
51. Cross-tabulation: Bank * perform the service right the first 150
time
52. Cross-tabulation: Bank * service at the time they promise 151

to do
53. Cross-tabulation: Bank * insist on error free records 152
54. Cross-tabulation: Bank * tell customers exactly when 153

services will be performed
55. Cross-tabulation: Bank * prompt service to customers 154
56. Cross-tabulation: Bank * willing to help customers 155
57. Cross-tabulation: Bank * employees never be too busy to 156

respond to customers
58. Cross-tabulation: Bank * employee behave instill 157

confidence in customers
59. Cross-tabulation: Bank * customers feel safe in transactions 158
60. Cross-tabulation: Bank * employees are courteous with 159

customers
61 Cross-tabulation: Bank * employees have knowledge to 160
answer customers' questions
62 Bank * customers get individual attention Crosstabulation 161
63. Cross-tabulation: Bank * bank operating hours convenient 162

to all their customers
64. Cross-tabulation: Bank * employees who give customers 163

personal attention
65. Cross-tabulation: Bank * banks will have their customers 164

best interest at heart
66. Cross-tabulation: Bank * employees will understand 165

specific needs of their customers
67. Demographic-Age 166
68. Demographic- Education 167
69. Demographic-Occupation 168
70. Demographic-Income 169
71. Demographic-Gender 170
72. Demographic-Bank 171
73. ANOVA 172
74. Test of Homogeneity of Variances 176

Chapter Plan
1. Introduction
2. Service quality management in Banks
3. Literature review
4. Research design
5. Data analysis
6. Findings and Discussion
7. Conclusion
8. Recommendation and Suggestion
9. Limitation of study
10. References
ANNEXURE A-A Sample Copy of
Questionnaire
Chapter 1
Introduction
Services are ―deeds, process and performance‖ (Zeithaml and Bitner1, 2006).
Their characteristics of intangibility, heterogeneity, inseparability from producer
and perishability dictate that their marketing treatment is different from that
required by physical goods. The impact of services on the world economy is huge
and growing (Javalgi and white2, 2000). Services are making a significant
contribution to the Indian economy by contributing more than 50% of GDP.
Service sector should not be viewed as monolithic.
It contains within it services of different types. The use of classification schemes in

the research on services to determine types of services for which consumers are
more likely to experience services quality. Consumers evaluate service quality
through indifference of experience based on variability context and culture
different from the developed countries. This study is to explore the indifference of
service quality variation in different banking sector in U.P in India which is a
developing country. It has become very important that banks in India determine the
service function as a contributing factor in Indian economy. The service quality
dimensions influence service offerings perceived by Indian banking consumers.
Consumers select banking service based on competitive service offering, with the
advent of international banking, the trend towards larger bank and innovations in
the marketplace. Consumers are now having greater difficulty in selecting one
institution from the other. In order to provide excellent service quality, identifying
dimensions of the service quality construct is the first step in banking sector.
1
Zeithaml And Bitner, 2006, Services Marketing: Integrating Customer Focus, Tata
Mcgrawhill/Irwin.
2
Javalgi And White2, 2000, Strategic Challenges For Marketing Of Services, International
Journal Of Marketing.
1
The research endeavors to fill the gap in the service quality by exploring the
dimensions of customer perceived service quality in context of the Indian banking
industry with a special emphasis to U.P. A set of service quality parameters, drawn
from customers‘ expectations about service quality relating public sector vs private
sector banks in U.P
INDIAN BANKING INDUSTRY3

The word Bank is derived from the Indian word Banka, which is a German word
meaning bench. Banking Regulation Act 1949 of India defines banking as
―accepting, for the purpose of lending or investment of deposit of money from the
public, repayable on demand or otherwise and withdraw able by cheque, draft and
order of otherwise.
The essential function of a bank is to provide services based on value service and
extending credit. Bank is a financial institution that provides banking and other
financial services. Currently the term bank functions as institution that holds a
banking license. Banking licenses are generated by financial supervision
authorities and provide fundamental banking services following rights to conduct.
Banking services provide banking operations accepting public deposit and making
loans. The Indian financial system major participants are the financial institutions,
commercial banks, lending institutions, investment institutions, specialized
financial institutions and state level development banks, Non-bank financial
companies and other market intermediaries. The commercial banks and certain
variants of non-bank financial companies are among the oldest of the market
institutions.
3
www.rbi.com
2
India can‘t attain a healthy economy without a sound and effective banking system.
The Indian banking system can attain excellent service standards through coupling
banking system with service quality.
For the past three decades India‘s banking system has several outstanding
achievements:
1. Extensive reach to consumers.

2. Rural market penetration
3. No long queue waiting for hours at banking counters.
4. Wider choice of banks
5. Efficient Banking transfer of money from one branch to other
6. Online banking transaction facilities
History of Indian Banking System
Phase1:
The general bank of India was set up in year 1786. The East India Company
established Bank of Bengal 1809, bank of Bombay 1840, Bank of Madras 1843.
These three Banks were amalgamated in 1920 and Imperial Bank of India was
established started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established. In 1894 Punjab National bank ltd was
established with headquarters at Lahore. Between 1906 and 1913, Bank of India,
Central Bank of India, Bank of Baroda, Canara Bank, Indian Banks, and Bank of
Mysore were set up. Reserve Bank of India came in 1935.
3
During the first phase the growth was very slow and banks also experienced
periodic failures between 1913 and 1948. The Banking companies Act 1949 which
was because Banking Regulation Act 1949 as per amending Act 1965.
RBI was vested with extensive powers for the supervision of banking sector in
India. During this phase, public had lesser trust and confidence in the banks. The
deposit mobilization was slow.
Phase II
Indian Government took major steps in Indian banking sector reform after
Independence in 1953, Indian Government nationalized Imperial bank of India
providing extensive banking services facilities especially in rural and semi-urban
areas. It formed state bank of India to act as principal agent of RBI and to handle
banking transformation of the Union and state government.
The Nationalization Indian Banking sector reform was carried out in 1980 with
seven more banks. The step brought 80% the banking segment in India under
Government ownership. As a result of Nationalization, the branches of the public
sector bank India rose to approx 800% in deposits and advances took a huge jump
by 11000%.The Nationalization of Indian banking system gave the public
realization of trust and confidence.
Phase III
In 1991, under the chairmanship of M Narsimham, The Narshimham Committee

was set up by his name which worked for the Liberalization of banking practices.
The Indian banking system improved after 1991 providing better satisfactory
services to customers. Phone Banking, ATM services, Internet banking was
introduced. The entire banking system improved with efficiency and convenient
banking services.
4
FUNCTIONS OF A BANK
Banking involves dealing directly with the money; government in most countries
regulates this sector. In India, regulation traditionally have been very strict and in
the operation. Banks essentially perform the following functions.
1. Accepting deposits from public/others
2. Lending money to public
3. Transferring money from one place to another
4. Acting as trustees
5. Keeping variables in safe custody
6. Government business
7. Acting as intermediaries
8. Collation business
Banking Industry Trends 2007-2008-2009-2010-2011-2012-2013
Aggregate deposits of scheduled commercial banks (SCB‘s) increased by 22.2%

(Rs 5, 80,208 cr) during 2007-2008 as compared to 23.8% (Rs 5,02,885 cr) in
previous year. Demand deposit growth at 20.2% was higher than 17.9% in last
year.
Non Food credit of SCB‘s increased by 22.3% (Rs 4, 19,425 cr) as compared with
28.5% (Rs 4,18,282 cr) in previous year. SCBs investment in
bonds/debentures/shares of public sector undertakings increased by 14.2% (Rs
11839 cr) 2007-8
5
SLR investment, increased by 21.9% (Rs 4,31,256 cr) in 2007-08 against 27.3%
(Rs 4,22,363 cr) in 2006-07
Banks-investment in instruments through mutual funds increased by Rs 6818 crore

in 2007-08 as compared to Rs 1315 crore in 2006-07.
Investment in Government and other approved securities by commercial banks

increased by 22.9% (Rs 181222 cr) during 2007-08 significantly higher than 10.3%
(Rs 74062 cr) 2006-07
For ICICI4 Bank, NIM increased from 2.64 percent in FY11 to 2.73 percent in
FY12 on account of shift in deposit mix, shedding of bulk deposits and lower
securitization losses. The bank has largely exited unattractive business segments
such as small-ticket personal loans in the domestic segment and most non-India
related exposures in its international business. The bank‘s domestic and overseas
NIMs increased by 6 bps and 35 bps to 3.04 percent and 1.23 percent, respectively.
NIMs of its overseas operations improved primarily due to an increase in yield on
overseas advances (due to new disbursements at higher interest rates) and
repayment and prepayment of low yielding loans.
HDFC5 Bank was the collecting banker for some of the tax free bond issuances
which resulted in higher current account floats and lower cost of funds, leading to
expansion in NIM during the last quarter of FY12. However, the bank witnessed a
marginal decline in its NIM from 4.25 percent in FY11 to 4.22 percent in FY12
due to increase in cost of deposits from 4.30 percent in FY11 to 5.72 percent in
FY12.
4
www.icici.com
5
www.hdfc.com
6
Banking System in India is dominated by nationalized banks. The Nationalization
of banks in India took place in 1969 under the stewardship of Mrs. Indira Gandhi
the then prime minister. The major objective behind Nationalization was to spread
banking infrastructure in rural areas and make available cheap finance to Indian
farmers. Fourteen banks were nationalized in 1969. State Bank of India6 (SBI) was
the only public sector bank in India. SBI was nationalized in 1955 under the SBI
Act of 1955.The second phase of Nationalization of Indian banks took place in the
year 1980. Seven more banks were nationalized with deposits over 200 crore.
SERVICES OFFERED BY BANKS

The services offered by Banks are Lending (Assets) and Borrowing (Liabilities),
o Savings Bank A/C
o Current A/C
o Fixed Deposit
o Term Deposit
o Recurring Deposit
o Monthly Income Deposit
o Liquid Deposit
o Assets
o Two wheeler Loans
o Personal Loans
o Commercial Vehicles Loans
o Construction Equipment Loans
o Others (Mutual Fund and Insurance)
6
www.sbi.com
7
The New Banking Perspective
Customers enabled with electronic banking opening new delivery channel.

Technology enabling Indian banking services through, Interactive voice response
systems (IVRS), Internet Banking, ATM services with high customer care
The Bulk of research on service quality in banks has been seen in the context of
US and European banking institution, At this juncture, it is important to also study
banking institutions based in developing economies like India and particularly to
the state like Uttar Pradesh which has the largest number of people of the country
(Malhotra et al7.,1993).
Quality as a parameter
The global market is becoming more competitive every day. Indian banking sector
continually adopting new ways to gain an edge over their competitors around the
globe marketplace. Global competition and deregulation in a number of industries
to apply quality in order to differentiate service offering.
Quality involves meeting or exceeding customer expectations, Goetsch and

Davis; 20048. Quality applies to products, services, people, processes, and
environments. Quality is a dynamic state associated with products, services,
people, processes and environments that meets or exceeds expectations.
7
Malhotra et al7, 1993, Customer Satisfaction, A Comparative Analysis Of Public Sector Banks,
Abhigyan.
8
Goetsch And Davis, 2004, Introduction To Total Quality: Ny: Macmillan.
8
Quality is an ever-changing state (i.e., what is considered quality today may not be
good enough to be considered quality tomorrow).
Recognizing Different Perspectives on Quality Perceptions affect every aspect of

our world – including the business world. Managers need to recognize that
differences in perceptions of quality exist. Many managers have strong opinions
about what quality is. These opinions can be variance with the beliefs of the
majority of their customers. This may hurt the competitiveness.
Welch9, Quality is our best assurance of customer allegiance, our strongest defense
against foreign competition and the only path to sustained growth and earnings.
Deming10, Quality pays when pursued. Quality shows relationship with market
share and return on investment. Higher quality yield a higher return on investment
(ROI). Quality also pays in the form of customer retention. Adopting quality
principles strongly correlates to corporate stock and earnings appreciation.
Quality is one of the core components of value in the S-Q-I-P model. Product and
service quality define the offering in the value proposition. Quality is still a
powerful competitive force facing companies.
Quality is totality of features and characteristics of a product or service that bear on
its ability to satisfy stated or implied needs, Kotler11.
9
Welch, delivering service quality and satisfying library customers through web based services.
10
Deming, Principles of Quality Management, Sage Publication.
11
Kotler, 1999 Marketing Management, Prentice Hall Publication.
9
Total quality is an approach to doing business that attempts to maximize the
competitiveness of an organization through the continual improvement of the
quality of its products, services, people, processes and environments.
Figure 1: Continual quality improvement
Johnson & Weinstein12, Quality must provide goods and services that completely
satisfy the needs of both internal and external customers. Quality serves as the
―bridge‖ between the producer of goods or services and its customer.
This systems view focuses on interactions between the various components that
combine to produce a product or service. The systems view also focuses
management on the system as the cause of quality problems. In recent years, a
major advance in operations management has been the improved understanding of
the operations/marketing interface. The interface has resulted in an increased focus
on the customer. This has helped operations manager externalize their views to the
customer as well by making the customers‘ part of the design process. Among the
recent advances in operations management has been a migration towards a more
strategic view.
12
Johnson & Weinstein, 2004, Superior Customer Value In The New Economy: Concepts And
Cases, Crc Press, Boca Raton, Fl.
10
Ferdows and Demeyer13 linked this strategic view of operations management to
quality management by proposing the model.
Figure 2: A Strategic view of service

Operations Management Competence
Model
This strategic view of OM to quality management identified quality as base on

which lasting improvement in other competitive dimensions established.
This strategic view has also led to a better understanding of the relationship
between quality and other competitive variables such as profitability, cost
leadership, and operational success. One common complaint among critics of
operations management is that too much credence is given to fads of the day rather
than honestly improving the fundamentals of the business.
13
Ferdows And Demeyer (1990) ‗Lasting Improvement In Manufacturing‘, Journal of
Operations Management 9(2):168–184.
11
Deming’s 14 point philosophy on quality14
1. Create constancy of purpose for improvement of products and service

2. Adopt a new philosophy; we are in a new economic age
3. Cease dependence upon inspection as a way to achieve quality
4. End the practice of awarding business based on price tag
5. Constantly improve planning, production and service process, INCLUDING
PEOPLE!
6. Institute training on the job
7. Institute improved leadership
8. Drive out fear
9. Break down departmental barriers
10.Eliminate slogans/targets asking for increased productivity without
providing methods
11.Eliminate numerical quotas
12.Remove barriers that stand in the way of workers and their pride of
workmanship - both hourly and salaried.
13.Institute programs for education and re-training
14.Put all the emphasis to work to accomplish the transformation
14
Deming‘s 14 point philosophy on quality management, Sage publication
12
The Deming Cycle
1. Conduct consumer research and use it in planning the product (PLAN).
2. Produce the product (DO).
3. Check the product to make sure it was produced in attendance with the plan
(CHECK).
4. Market the product (ACT).
5. Analyze how the product in terms of quality, cost (ANALYZE)
Figure 3: Deming-PDCA-CYCLE
Deming seven deadly diseases

1. Lack of constancy of purpose to plan a marketable product to keep the
company in business and provide jobs.
2. Emphasis on short term profits
3. Personal evaluation appraisal, by whatever name, for people in management,
for effects, which are devastating.
4. Mobility of management; job hopping.
5. Use of visible figures for management, with little or no consideration of
figures that are unknown
6. Excessive medical costs
13
7. Excessive warranty costs, fueled by lawyers working on contingency fees.
The Juran Philosophy of quality15
1. Achieve structured improvements on a continual basis combined with

dedication and sense of urgency.
2. Establish an extensive training program.
3. Establish commitment and leadership on the part of higher management.
Juran 10 steps to quality
1. Build awareness of both the need for improvement and opportunities for
improvement.
2. Set goals for improvement.
3. Organize to meet the goals that have been set.
4. Provide training.
5. Implement projects aimed at solving problems.
6. Report progress.
7. Give recognition.
8. Communicate results.
9. Keep scores.
10. Maintain momentum by building improvement into the company‘s regular
systems.
15
Juran J M 1988, Juran‘s quality control handbook, 4th edition New York McGraw-hill
14
The Juran Trilogy
Quality Planning
1. Determine who the customers are:
2. Identify customers‘ needs.
3. Develop products with features that respond to customer needs.
4. Develop systems and processes that allow the organization to produce these
features.
5. Deploy the plans to operational levels.
Quality Control
1. Assess actual quality performance.

2. Compare performance with goals.
3. Act on differences between performance and goals.
Quality Improvement
1. Develop the infrastructure necessary to make annual quality improvements.
2. Identify specific areas in need of improvement, and implement improvement
projects.
3. Establish a project team with responsibility for completing each
improvement project.
4. Provide teams with what they need to be able to diagnose problems to
determine root causes, develop situations, and establish control that will
maintain gains made.
15
Figure 4: The Juran‘s Trilogy
The 6 sigma Approach to quality16

1. Identify the product characteristics wanted by the customers.
2. Classify the characteristics in terms of their criticality.
3. Determine if the classified characteristics are controlled by part and/or
process.
4. Determine the maximum allowable tolerance for each classified
characteristic.
5. Determine the process variation for each classified characteristic.
6. Change the design of the product, process, or both to achieve a Six Sigma
processes performance.
16
Hendricksc. and Kelbaugh R. (1998) ―Implementing Six Sigma at GE‖ The Journal of Quality
and Participation.
16
Figure 5: Histogram of 3 sigma process
Figure 6: Histogram of 6 sigma process
17
Six Sigma is an extension of total quality management which has the aim of taking
process and product quality to levels where all customer requirements are met.
Six Sigma is achieved by improving process performance.
Or, Without improving the process at all if the specifications describing acceptable
product can be loosened enough to correspond to the original process‘s ± 6 sigma
points. The future of quality management would be Demanding global customers,
Shifting customer expectations, Opposing economic pressures, New approaches to
management.
Crosby’s Philosophy of quality17
Crosby‘s Primary Contributions - Crosby became very well known for his
authorship of the book Quality is Free. The primary thesis of this book was that
quality, as a managed process, can be a source of profit for an organization.
His approach also emphasizes the behavioral and motivational aspects of quality
improvement rather than statistical approaches. Although he prescribes quality
teams consisting of department heads, Crosby does not promote the same kind of
strategic planning proposed by Deming and Juran.
Crosby adopts a human resources approach similar to Deming in that worker input
is valued and is encouraged as central to the quality improvement program.
Crosby specifies a quality improvement program consisting of fourteen steps.
These steps underlie the Crosby zero defects approach to quality improvement.
17
Crosby‘s Philosophy of quality, Crosby, P.B. (1979), Quality Is Free, McGraw-Hill, New
York, NY.
18
Crosby 14 steps18
1. Make it clear that management is committed to quality.

2. From quality improvement teams with representatives from each
department.
3. Determine how to measure where current and potential quality problems lie.
4. Evaluate the cost of quality and explain its use as a management tool.
5. Raise the quality awareness and personal concern of all employees.
6. Take formal actions to correct problems identified through previous steps.
7. Establish a committee for the zero-defects program.
8. Train all employees to actively carry out their part of the quality
improvement program.
9. Hold a ―zero-defects day‖ to let all employees realize that there has been a
change.
10.Encourage individuals to establish improvement goals for themselves and
their groups.
11.Encourage employees to communicate to management the obstacles they
face in attaining their improvement goals.
12.Recognize and appreciate those who participate.
13.Establish quality councils to communicate on a regular basis.
14.Do it all over again.
18
P.Crosby, Quality Is Free New York: Mentor Executive Liberary, 1979
19
Garvin’s 8 Quality dimension19
1. Transcendent Definition- Quality is something that is intuitively understood
but nearly impossible to communicate such as beauty or love.
2. Product-Based Definition -Quality is found in the components and attributes
of a product.
3. User-Based Definition-If the customer is satisfied, the product has good
quality.
4. Manufacturing-Based Definition-If the product conforms to design
specifications, it has good quality.
5. Value-Based Definition-If the product is perceived as providing good value
for the price, it has good quality.
Figure 7: 8Dimension of Quality-D. Garvin,
Product Quality Dimension 1986
19
Garvin‘s 8 quality dimension, 1988, Managing Quality-The strategic and competitive edge, the
free press NY
20
Performance - Refers to the efficiency with which a product achieves its intended
purpose.
Features - Attributes of a product that supplement a product‘s basic performance.
Reliability - The propensity for a product to perform consistently over its useful
design life.
Conformance (specifications and tolerance)-Numerical dimensions for a product‘s

performance, such as capacity, speed, size, durability, color, or the like.( easily
quantified and difficult for a service to conform)
Durability -The degree to which a product tolerates stress or trauma without

failing.
Serviceability - Ease of repair easily and cheaply. If service the features like rapid,
courteous, easy to acquire and competent, the products have good service quality.
Aesthetics - Subjective sensory characteristics such as taste, feel, sound, look, and
smell. We measure quality as the degree to which product attributes are matched to
consumer preferences.
Perceived Quality - Quality is as the customer perceives it. Customers imbue

products and services with their understanding of their goodness. This is perceived
quality.
21
Quality function Deployment (QFD)20
Figure 8: QFD
QFD enables Customer Driven services, Reduces Implementation Time,

Promotes Teamwork, Provides Documentation.
Driving Force behind QFD is that Customer Dictates Attributes of Product.

Customer Satisfaction through Meeting Or Exceeding Customer Expectations,
Customer Expectations Can Be Vague & General In Nature; Customer
Expectations Must Be Taken Literally, Not Translated Into What The Organization
Desires.
20
Lowe , A.J. & Ridgway, K. Quality Function Deployment, University of Sheffield
22
House of Quality21
List Customer Requirements (What‘s)
List Technical Descriptors (How‘s)
Develop Relationship (What‘s & How‘s)
Develop Interrelationship (How‘s)
Competitive Assessments
Prioritize Customer Requirements
Prioritize Technical Descriptors
Figure 9: House of Quality
Hauser, J.R. and D. Clausing (1988), ―The House of Quality,‖ The Harvard Business Review,
21
May-June, No.3, pp. 63-73
23
The cost of poor Quality22
The costs of poor quality are those that would disappear if every task were
continuously performed without deficiency every time.
Actual Cost – Minimum Cost = COPQ.
Caution: Minimum cost is not necessarily equal to standard cost. Standard costs
often include allowances for defects, spoilage, or loss.
The American Society for Quality uses four categories to stratify COQ:
 Prevention
 Appraisal
 Internal Failure
 External Failure
Figure 10: The Cost of Poor Quality
 Prevention
Cost of Attaining Quality

 Appraisal: Prediction
Audit
 Appraisal: Detection
Cost of Poor Quality

 Failure: Internal
External
22
Harrington, H. James 1987, Poor Quality Cost, American Society for Quality Control,
Milwaukee, Wisconsin
24
All activities and processes that do not meet agreed performance and/or expected
outcomes result in COPQ. Costs that would disappear if every task were always
performed without deficiency Actual Cost - Minimum Cost = COPQ
Service Quality as Construct
Customer also form perceptions of quality during the service transaction-how

effectively and efficiently the service was delivered and the speed and convenience
of completing the transaction.
Service quality can also be defined according to both the what and how a product
or service is delivered.
Carol King23 identified dimensions of service quality such as responsiveness,

competence, access, courtesy, communication, credibility, security, and
understanding.
Service quality is even more difficult to define than product quality. This often
results from wide variation created by high customer involvement. The example is
fountain pen and food service.
23
Carol King, 1985, ―A role theory perspective on Dyadic Interactions: The Service Encounter,‖
Journal of Marketing, 99-111
25
Parasuraman, Zeithaml, and Berry’s (PZB) Service Quality Dimensions24
Tangibles
– Include the physical appearance of the service facility, the equipment,
the personnel, and the communication material.
Service Reliability
– Differs from product reliability in that it relates to the ability of the
service provider to perform the promised service dependably and
accurately.
Responsiveness
– The willingness of the service provider to be helpful and prompt in
providing service.
Assurance
– The knowledge and courtesy of employees and their ability to inspire
trust and confidence.
Empathy
– The customer desires caring, individual attention paid to customers
by the service firm.
Understanding that definitions and dimensions of quality exist allows measures to

be taken to provide a better basis for communication and planning in a firm. By
sharing a common definition of quality, each department within a company can
work toward a common goal.
24
Parasuraman A., Zeithaml V.A., Berry L.L. (1988): SERVQUAL: A multiple item scale for
measuring consumer perceptions of service quality, Journal of retailing, Vol. 64, No. 1, pp. 12-
40.
26
Understanding the multiple dimensions of quality desired by customers can lead to
improved product and service design. HP embarked on a ―customer one-on-one‖
program that emphasized customer interaction with production workers.
Gronroos25, distinguished between ―technical quality‖ and ―functional quality‖.

Technical quality is concerned with the outcome of the delivered product or
service.
Customers use service quality attributes such as reliability, competence,

performance, durability etc. to evaluate technical quality. Functional quality has
more to do with how the technical quality is transferred to the consumer. Service
quality attributes such as responsiveness and access would be important in helping
the customer judge the functional quality of the service encounter.
One of the important determinants of how we perceive quality is the functional role
to fulfill organizationally. It is difficult to communicate with information systems
users and internal managers for several reasons. User system requirements differ
from analyst system requirements.
This difference in the nature of the work performed by users and analyst causes
them to see quality issues differently. Differences between users and analysts are
only one instance of different perspectives created by functional differences. Firm
must constantly improve their communication.
25
Grönroos, Christian (1984), ―A Service Quality Model and Its Marketing Implications,‖
European Journal of Marketing, 18(4), 36-45.
27
Recognizing fundamental differences between difference function view quality is
an important first step in understanding and resolving problems associated with
mismatches of quality perceptions within organization.
Experience with cross-functional teams has been difficult for many firms because
of poor communication skills among team members.
Christian Grönroos (1990) A culture where an appreciation for good service

exists, and where giving good service to internal as well as ultimate, external
customers, is considered a natural way of life and one of the most important norms
by everyone in the organization.‖
Zenke, Ron (2002)26, The service offering includes service quality can also be
judged by considering the various ―spheres‖ or thresholds of the service offering
having 3 service levels.
The core benefit is the most fundamental level stands for what the consumer is
actually seeking. The core benefit represents basic reasons why people buy, such
as hunger, safety, convenience, confidence, status, self esteem and so on.
Gronroos coined the term ―service concept‖ to indicate the core of a service
offering, such as offering a car rental as a solution to a short-term transportation
need.
26
Ron Zemke, (2002) "Managing the employee connection", Managing Service Quality, Vol. 12
Iss: 2, pp.73 - 76
28
A business must set itself apart from its competition. To be successful it must
identify and promote itself as the best provider of attributes that are
important to target customers (and do it at a profit), George S. Day
Figure11: Breadth of Service Offerings
The 3 service levels
High Service
Moderate Service
Less expensive service
29
Chapter 2
Literature
Review
Kumbhar27, 2011; Bellou (2010); Cohen et al (2006); Andronikidis28 and Jain
and Gupta (2004); Pont and Brady et al (2002); proved that performance only
scale it is an excellent for measuring service quality and customer satisfaction i.e.
Many empirical studies proved its validity, reliability, methodological soundness,
superiority and psychometric soundness of the SERVPERF scale.
Aaron and Robin29 (2010) and Lianxi Zhou, (2004) mentioned that the
performance-only measurement of service quality (SERVPERF) as determinants of
consumer satisfaction and subsequent behavioral intentions associated with
banking services. Therefore this study focused on performance only scale to
measuring service quality and customer satisfaction in e-banking.
27
Kumbhar Vijay M., (2011a), Customers' Demographic Profile and Satisfaction in E-Banking
Services: A Study of Indian Banks, International Journal for Business, Strategy and
Management,Vol.1 Issue
28
Andronikidis Andreas and Bellou Victoria (2010), Verifying Internet measures of the service
quality construct: consistencies and contradictions, Journal of Marketing Management, Volume
26, Issue 5 & 6 May 2010 , pages 570 – 587
29
Aaron T. and Robin S. (2010) FESTPERF: A Service Quality Measurement Scale for
Festivals, Event Management, Volume 14, Number 1, 2010 , pp. 69-82(14)
30
Philip Kotler et al 201030 services firm can differentiate it by delivering
consistently higher quality than its competitors provide. Now a day‘s most of
service industries have joined the customer-driven quality movement and like
product marketers, service providers need to identify what target customers expect
in regards to service quality. The top service companies set high service –quality
standards. They watch service performance closely, both their own and that of
competitors. They do not settle for merely good service; they aim for hundred
percent defect-free service. Panda31 reveal that customer tests the quality of
service of a firm at every encounter. Each of the customer encounter is called
moment of truth. If the experience from service encounters is bad, it may not lead
to customer satisfaction. Quality management involves deciding on quality
standards and implementing a method of assurance on performance level of the
staff and facilities. Quality has emerged as a major competitive element in service
company strategies. Service providers are giving increasing emphasis on creating
reputation for good quality of service as this provides a positive image for their
organization. The service quality management process involves matching evolving
customer expectations. Customers have their own service expectations. From a
firm a customer is satisfied when his expectations match the perceived service.
When the perceived service passes over the expected service, the customer is
delighted if there is failure in meeting expectation the customer is dissatisfied.
30
Philip Kotler, International Journal of Scientific and Research Publications, Volume 2, Issue
10, October 2012 2 ISSN 2250-3153
31 Panda T.K., (2007) ― Marketing Management‖ Excel Book second edition
31
Cubillo-Pinilla et al.,200932, Service quality is needed to develop and maintain a
competitive advantage in their respective market.
Wafa et al 2009; Woodruff et al 198333; examined Marketing literature and found

positive link between the satisfaction and the brand image and brand perception.
Apart from service quality brand perception and perceived value also plays crucial
role in customer satisfaction in service industry.
Zeithaml et al (2009)34 customers have two different types of service

expectations: 1) Meaning and types of expected service 2) Current issues in
customer service expectations. In a Perception of the service, service quality may
be the most critical determinant of satisfaction. They mentioned the service
encounters or ―moments of truth‖ as the building blocks for both satisfaction and
quality. Service encounter is an opportunity to build perceptions of quality and
satisfaction.
Angell et al.,2008; Ham,2003; Harvey and Knight, 199635; Yeo,2008;

emphasized on the importance of service quality.
32
Cubillo-Pinilla, J., J. Zuniga, I. Losantos and J. Sanchez, 2009. Factors influencing international students‘
Evaluations of higher education programs. The Journal of American Academy of Business, 15(1): 270-278.
33
Woodruff Robert B., Cadotte Ernest R., Jenkins Roger L., (1983) Modeling Consumer Satisfaction Processes
Using Experience-Based Norms , Journal of Marketing Research, Vol. 20, No. 3 (Aug., 1983), pp. 296-304
34
Zeithaml, V. A., 2009, ―Service Quality, Profitability, and the Economic Worth of Customers: What We Know
and What We Need to Learn‖, Journal of Academy of Marketing Science, Volume 28(1), P.67-85
35
Harvey, L. and D. Green, 1993. Defining quality. Assessment & Evaluation in Higher Education, 18(1): 9-34.
Harvey. L. and P.T. Knight, 1996. Transforming Higher Education. London: Open University Press.
32
Shahin, 200836, stated that service quality gap scores are positive imply
expectations are not just being met but exceeded.
K. Rama Mohana Rao (2007)37 Quality means the degree of excellence in service
performance. Consumers perceive the quality of a service by experiencing the
consumption process and comparing the experience with their expectations. The
best service quality firms cannot blame for poor quality .The service firm need to
formulate strategies for quality performance. Service quality management is the
most critical task of service companies Quality may be perceived in many
dimensions. It may relate to cost, profitability, customer satisfaction, customer
relations or positive word of mouth, customer asses service quality with their own
criteria.
Lovelock et al (2006)38 opined that if a firm wants to retain customer they are
required to provide better services to their customers by quality improvement
programs and should continuously enhance benefits desired by customers. At the
same time, productivity improvement efforts decrease the cost. The customers are
satisfied with the organization if the services deliver by firm are better than their
competitors.
36
Shahin, 2008, SERVQUAL and model of Service quality gaps, A framework for determining
and prioritizing critical factors in delivering quality services.
37
K. Rama Mohana Rao, (2007), ―Services Marketing‖ Pearson Education.
38 Lovelock C, Wirtz J and Chatterjee J, (2006) ―Service Marketing‖ V Ed. Pearson Education,
33
Abdullah Aldlaigan and Francis Buttle 200539, in their research investigated the
different types of attachment that customers develop towards retail banks. A
statistically valid and reliable scale was introduced to measures the forms of
attachment. This scale can be used to identify customer organizational attachment
profiles that transcend or complement customer satisfaction and provide a basis for
relationship longevity.
A.Abdul Raheem (2005)40, highlighted the areas in which public sector banks
need to improve to survive in the competition posed by the new entrants in the
banking sector. He pointed out that the existing organizational structure and
policies of public sector banks are ill equipped to meet the new objectives. He
emphasized that public sector banks should commit themselves to provide quality
service to survive.
Rasli and Naim,200541, Customer demands have increased. So, Service quality is
the only way to gain a differential advantage.
Parasuraman et al, 2005, Loiacono and Goodhue , 2000; Yoo and Donthu,
Abdullah, 2005, 2001; Zeithaml et al, 2000; Nadiri, et al 200942 suggested that
in e-service era eservice quality is important aspect of measuring customer
satisfaction.
39
Aldlaigan, A. and Buttle, F. (2005), ―Beyond satisfaction: customer attachment to retail
banks‖, International Journal of Bank Marketing, Vol. 23 No. 4, pp. 349-59.
40
Ahmadreza, S., R. Amran and H. Huam, 2011. Servqual in malaysian universities:
Perspectives of international students. Business Process Management Journal, 17(1): 67-81.
41
Rasli, A. and A.S. Naim, 2005. Pengurusanteknologi. UTM Press, Johor.
42
Nadiri, Halil , Kandampully, Jay and Hussain, Kashif(2009) 'Zone of tolerance for banks: a
diagnostic model of service quality', The Service Industries Journal, 29: 11, 1547 — 1564
34
Parasuraman, Zeithaml and Berry43 (2005; 1988; 1985) posited that
Expectation-Performance Scale (Gap Analysis) is necessary to examine level of
customer satisfaction in service industry. They argued that if there is expected
quality of service and actual perceived performance is equal or near about equal
there is customers can be satisfy, while a negative discrepancy between
perceptions and expectations a ‗performance-gap‘ as they call it causes
dissatisfaction, a positive discrepancy leads to consumer delight.
Jain and Gupta, 200444; stated that the higher level of perceived service quality
results in increased customer satisfaction. When perceived service quality is less
than expected service quality customer will be dissatisfied.
Lia Patricio45, Raymond P. Fisk and Joao Falcao e Cunha 200346, in their
research presented the results of a qualitative study of a Portuguese bank regarding
customer use of internet integrated in a multi-channel offering that includes high
street branches, telephone banking and automatic teller machines. The results show
that performance evaluation is a key factor influencing channel use.
43
Parasuraman A. Zeithaml Valarie A. and Malhotra Arvind (2005) E-S-QUAL: A Multiple-
Item Scale for Assessing Electronic Service Quality, Journal of Service Research, Volume 7, No.
X, Month 2005 1-21
44
Jain and Gupta, (2004), Measuring Service Quality: SERVQUAL vs. SERVPERF Scales,
VIKALPA, Volume 29, No 2, April - June 2004 pp 25-37
45
Patrício, Lia (2005), ―Enhancing Service Delivery Systems through Technology: A
Multidisciplinary Approach Applied to Internet Banking,‖ doctoral dissertation, University of
Porto, Portugal.
46
Raymond P. Fisk, and João Falcão e Cunha (2003), ―Improving Satisfaction with Bank
Service Offerings: Measuring the Contribution of New Delivery Channels,‖ Managing Service
Quality, 13 (6), 471-482.
35
The study also indicate that, in a multi-channel context, customer satisfaction with
internet services depends not only on the performance of this channel in isolation,
but also on how it contributes to satisfaction with the overall service offering.
Ham et al.200347; SERVQUAL has five generic dimensions or factors: tangibles,

reliability, responsiveness, assurance, and empathy.
Ham et al.2003; SERVQUAL instrument has been the predominant method used
to measure consumers‘ perceptions of service quality.
Ham et al.,2003; Parasuraman et al., 198848; conceptualized service quality as

the gap between customer expectations and perceptions.
Josee Bloemer, Tom Brijs, Gilbert Swinnen and Koen Vanhoof 200249, in their
research studied about dissatisfied customers and measures for dissatisfaction
management. They proposed data mining technique called ―characteristic rules‖ to
identify latently dissatisfied customers of a Belgian Bank. This study to provide
scholars and business management with theoretical, methodological and
managerial insights into identifying latently dissatisfied customers.
47
Ham, C.L. and Hayduk, S. (2003) Gaining Competitive Advantages in Higher Education:
Analyzing the Gap Between Expectations and Perception of Service Quality, International
Journal of Value-Based Management, 16(3), 223-242.
48
Parasuraman, A., Zeithaml, V. and Berry, L. (1988) SERVQUAL: A Multiple Item Scale for
Measuring Customer Perceptions of Service Quality, Journal of Retailing, 64(1), 12-40.
49
JoseÂe Bloemer, Tom Brijs, Gilbert Swinnen and Koen Vanhoof Identifying latently
dissatisfied customers and measures for dissatisfaction management International Journal of
Bank Marketing 20/1 [2002] 27±37
36
Hadikoemoro, 2002; Rapert and wren, 1998; stock and Lambert, 1992
emphasized the important of service quality improvement initiatives which may
result in sustaining competitive advantage.
Chowdhury and Abe 200250, state that consumers‘ perceptions of quality are
generally formed on the basis of an array of cues. These cues basically fall into two
categories: intrinsic cues and extrinsic cues. Intrinsic cues refer to attributes that
cannot be changed without changing the physical characteristics of the product.
Extrinsic cues, however, are the attributes that are not part of the physical products.
Zeithml, 200251 coined term ‗Value‘ of service also one of the most important
factors affecting on customers satisfaction. There are close relationship between
service value and customers satisfaction. Value may be conceptualized as arising
from both quality and price or from what one gets and what one gives.
Almossawi, B., 2001; Stafford, 199652, Service quality is particularly essential in

the financial services context because providers tend to be viewed as relatively
undifferentiated, and hence it becomes a key to competitive advantage. In addition,
financial services, like other services are intangible, difficult to evaluate, and rest
on experience and credence quality (Zeithaml, 1981; Zeithaml et al., 1985).
Chowdhury and Abe 2002, ―Consumer perceptions of value: a multi item scale for its
50
measurement,‖ Asia Pacific Advances in consumer research, 5: 160-168

51
Zeithmal V, Bitner J M, Gremier D and Pandit A, (2008) ―Service marketing: Integrating
Customer Focus across the Firm‖ IV Ed. Tata McGraw-Hill, New Delhi.
52
Almossawi, M. (2001), "Bank selection criteria employed by college students ,An exposition
of consumer behavior in the Financial service industry", International Journal of Bank
Marketing, Vol. 18 No.1, pp.15-26.
37
Alfred and Addam (2001) investigated attitudes using fifteen service quality
variables. In the present study, the service quality in retail banking are studied
using variables drawn from the reviews (Cronin and Taylor 1992; Zillur
Rahman, 2005; Verma and Vohna 2000; Mushtag A Bhat, 2005).
Wisner and Corney, (2001) studied conceptual approach for investigating the
service quality as SERVQUAL Analysis. They defined service quality as a ‗global
judgment or attitude, relating to the superiority of the service‘ and explicated it as
involving evaluations of the outcome and process of service act. In line with the
proportions put forward by Gronroos (1982)
Wisniewski, 2001; McFadyen et al, 2001; Donnelly and Shui, 1999 studied
Local authority services. Sui et al, 2001 studied Building maintenance
Engelland et al 2001 and 2000; Comm et al, 2000; Houston and Rees 1999;
Kwan and Ng, 1999; Hampton, 1993; Davis and Allen, 1990 studied Higher
Education.
Fournier and Mick53, 1999; Meuter et.al., 200054 Customer satisfaction is an

important theoretical as well as practical issue for the marketers and consumer
researchers Customer satisfaction can be considered as the essence of success in
today‘s highly competitive world of business.
53
Mick, D. and Fournier, S. (1998), (1999) ―Paradoxes of technology: consumer cognizance,
emotions, and coping strategies‖, Journal of Consumer Research, Vol. 25 No. 3, pp. 123-43.
54
Meuter, M., Ostrom, A., Roundtree, R. and Bitner, M.J. (2000), ―Self-service technologies:
understanding customer satisfaction with technology-based service encounters‖, Journal of
Marketing, Vol. 64 No. 3, pp. 50-64.
38
The importance that customers place on service quality attributes is the driver of
satisfaction. Loyalty is a crucial output to a firm‘s resource allocation strategy and
quality improvement efforts.
Giese and Cote, 200055; There are three common elements in consumer
satisfaction theory: type of responses (emotional or cognitive), response concerns a
particular focus (expectation and consumption experience), response at particular
time.
Luiz Moutinho and Anne Smith (2000)56, Introduced a model which posits a
crucial role for the evaluation of bank customers‘ attitudes towards both human
tellers and automated banking in mediating the ease of banking factor/perceived
satisfaction linkage. The model‘s explicit consideration of the effects of bank
customer attitudes towards human tellers and automation provides additional
explanatory power regarding how the perceived trend towards ease of banking
influences bank overall satisfaction, switching and loyalty behavior.
55
Giese, J.L. & Cote, J. A. Defining Customer Satisfaction. Academy of Marketing Science
Review,
2000.
56
Luiz Moutinho, Anne Smith, (2000) "Modelling bank customer satisfaction through mediation
of attitudes towards human and automated banking", International Journal of Bank Marketing,
Vol. 18 Iss: 3, pp.124 - 134
39
Harvis et al, 2000; Athiyaman, 2000; Guolla, 1999; Churchill and Suprenant,
198257, found that customer satisfaction is considered as a major outcome of
marketing activity and serves to link processes, culminating in purchase and
consumption with post-purchase phenomena such as attitudinal change, customer
retention, repeat purchase, brand loyalty, positive word-of-mouth communication
(WOM) and complaining behavior.
Furrer, et al, 200058, stated that the measurement of service quality has attracted a
significant interest among marketing practitioners and researches over the past two
decades.
Heung et al, 2000 studied restaurant services.
Kayanama and Black, 2000 studied travel services.
Mehta et al, 2000a, 2000b studied retailing services
57
Churchill, G.A., and Suprenant, C. (1982) ‗An investigation into the determinants of customer
satisfaction‘, Journal of Marketing Research, 19:November, 491-504.
Harvis, B., Voyer, P.A. (2000) ‗Word of Mouth processes within a services purchase Decision
Context‘, Journal of Service Research, 3:2, 166-177.
Athiyaman, A. (2000) ‗Graduates‘ perception about business education: an exploratory

research‘, Journal of Further and Higher Education, 25:1, 5-19.
Guolla, M. (1999) ‗Assessing the teaching quality to student satisfaction relationship: Applied
customer satisfaction research in the classroom,‘ Journal of Marketing Theory and Practice, 7:3,
87-97.
58
Furrer, O., Liu, BenSha-Ching and Sudharshan, D. (2000) ‗The relationships between culture
and service quality perceptions: Basis for cross-cultural market segmentation and resource
allocation‘, Journal of Service Research, 2:4, 355-371.
40
Donnely et al, 2000 studied Market Research
Jiang et al, 2000; Van, D. et al, 1999; Kettinger and Lee, 1999 studied
Information services.
Lassar et al, 2000; Marshall and Smith, 1999; Angur et al, 1999 studied
Banking application
Durvasula et al, 1999 studied shipping.
Dean, 1999; Curry et al, 1999; Llosa et al, 1998; O’Connor and Bowers, 1990
studied medical and health care services.
Lin and Wei, 1999 studied Brokerage services.
Gronroos, 199859, stated that service quality has become a requirement for
companies and organizations to remain competitive.
Lovelock, 1996; Stafford 199660, Service quality can only be assessed during and
after consumption, whereas credence qualities are virtually impossible to evaluate
even after consumption. Search quality, on the other hand, includes aspects of a
product or service that consumers can evaluate before making the purchasing.
59
60
Lovelock, C.H., “Services Marketing, Prentice – Hall, Upper Scddle River, 1996, No.3.
Stafford, M.R., “Demographic discriminant of service quality in the banking industry”,

Journal of servicesmarketing, 10(4), pp.6-22.
41
Services tend to be inherently low on search quality dimensions. Nevertheless,
financial services providers struggle to distinguish themselves from the
competition. In sum, investigating service quality in the financial services industry
is difficult as well as interesting.
Levesque and Mc Dougall 199661 indicated that customer satisfaction and

retention are critical for retail banks. They studied the major determinant of
customer satisfaction (situational factors, service quality, service features, and
customer complaint handling) and future intentions in the retail bank sector.
Lovelock, 199662, Service quality conceptually captures aspects of products or

services that potential consumers can and would like to assess before they select
product or service.
Zineldin, 1996; Yue and Tom 199563, service quality encompasses consumer‘s
expectations in terms of quality after they have highlighted a large number of
services that are supposedly used by consumers to evaluate and select banks or
financial institutions.
61
Levesque, T., & McDougall, G. H. G. (1996). Determinants of customer satisfaction in retail
banking. Int. J. Bank. Mark., 14(7), 12-20.
62
Lovelock, C.H., ―Services Marketing, Prentice – Hall, Upper Scddle River, 1996, No.3.
63
Zineldin, Mosad (1996), Bank strategic positioning and some determinants of bank selection.
International Journal of Bank Marketing, Volume 14/6, pp. 12-22.
Yue, H. and G. Tom (1995), How the Chinese select their banks. Journal of Retail Banking,
Volume XVI, No. 4 (Winter).
42
Reidenbach 199564 argued that customer value is a more viable factor than
customer satisfaction because it includes not only the benefits that most banks
focus on but also a consideration of the price that the customer pays. Customer
value is dynamic that must be managed.
Buttle, 199565; defined Service Gap is the difference between expected and
perceived services. Expectations are viewed as ―normative expectations‖, which
means desires or wants of customers, i.e.; what they feel a service provider should
offer rather than would offer.
Buzell and Gale’s66 empirical research shows the positive relationship between
service quality and organizational performance.
Cronin and Taylor (1992; 1994); Kumbhar, 2011; Kumbhar, 201167 argued
that customer satisfaction can be obtainable with low quality, whenever one‘s
expectations in a given situation are low and performance is adequate to the task.
Emergency situation fit this scenario well. Similarly, dissatisfaction with high
quality can ensue when some element of the service delivery is not up to personal
expectations. Therefore performance only scale is suitable to assess service quality
and customer satisfaction.
64Reidenbach 1995, Research Journal of Finance and Accounting Organizational Customers‘

Retention Strategies on Customer Satisfaction: Case of Equity Bank Thika Branch, Kenya
65
Buttle, F. (1996), ―SEVQUAL: review, critique, research agenda‖, European Journal of
Marketing, Vol. 30, nr. 1, pp. 8-32
66
Buzzell, R.D. and Gale, B.T. (1987), The PIMS Principles, Free Press, New York, NY.
67
Kumbhar Vijay M., (2011a), Customers' Demographic Profile and Satisfaction in E-Banking
Services: A Study of Indian Banks, International Journal for Business, Strategy and
Management,Vol.1 Issue 1,
43
Boyd, et al., 1994; Javalgie et al., 1989; Laroche et al., 198668, Reviewed
existing literature stated three goals. First, the study investigates and identifies the
service quality dimensions pertaining to financial services. Secondly, it examines
the relationship between perception accorded to these dimensions and the overall
attitude towards the banking. Thirdly, it examines the important discriminant
service quality factors among the different group of banks by paired comparison.
Bitner69 and Hubber, 1994 found after evaluation of the events carried out by a
given business in relation to expectations accumulated behind different contact
between the consumer and business.
Blanchard and Galloway70,1994, Heskett71 et al., 1990 stated that customer

satisfaction is the outcome of a customer‘s perception of the value received in a
transaction or relationship where value equals perceived service quality relative to
price and customer acquisition costs.
68
Boyd, W. L., Leonard, M., & White, C. (1994). Customer preferences for financial services:
An analysis. International Journal of Bank Marketing, 12(1), 9-15.
Laroche, M., Rosenblatt, J.A., & Manning, T. (1986). Services used and factors considered
important in selecting a bank: an investigation across diverse demographic segments.
International Journal of Bank Marketing, 4(1), 35-55.
69
Bitner, M. & Hubbert, A. (1994). Encounter satisfaction versus overall satisfaction versus
quality. In Rust & Oliver (Eds.), Service Quality (pp.72-94). London: Sage Publications.
70
Blanchard R.F., & Galloway R.L. (1994). Quality in retail banking. International Journal of
Service Industry Management, 5 (4): 5–23.
71
Heskett J., E. Sasser and C. Hart (1990), Service Breakthrough: Changing the Rules of the
Game, New York: Free press.
44
Parasuraman et al., 1994 identified service quality variables reliability,
responsiveness, competence, accessibility, courtesy, communication, credibility,
security, understanding and tangibility.
Parasuraman et al., 199472 developed the confirmation/disconfirmation paradigm

views as a result of the consumers‘ perceptions of the gap between their
perceptions of performance and their prior expectations. Disconfirmation is
positive when service performance exceeds expectations and disconfirmation is
negative when service performance is low than expectations.
Parasuraman et al., 1994, found that the service features of branches, staff and
information were established to be more significant and makes an impact on
overall satisfaction.
Parasuraman, Zeithmal and Berry 1994, Service quality is accepted as one of

the basics of customer satisfaction.
Rust and Oliver73, 1993 reviewed that service quality is antecedent to satisfaction
and is non-experiential in nature.
Anderson74 and Sullivan, 1993 stated that customer satisfaction often depends on
the quality of product or service contribution.
72
Parasuraman, A., Beery, L.L. and Ziethaml, V.A. (1994), “Reassessment of Expectations as a
Comparison Standard in Measuring Service Quality: Implication from further Research”,
Journal of Marketing, vol.58, no.pp.111-124.
73
Rust, R.T. and Oliver, R. (1994), ―Service Quality, London, Sage Publications.
45
Cronin and Taylor, 1992 undertook a research reciprocity between satisfaction
and quality through a number of service industry.
Fornell, 1992 customer satisfaction and quality become visible to be important for
all companies. Customer satisfaction is more important for loyalty in banks.
Leads 1992, found in survey that increased use of service quality/ sales and
promotional behaviors (such as formal greetings) enhanced customer satisfaction
and reduced customer attrition. Leads, 1992, documented that approx 40% of
clients, switched banks because of what they measured to be poor service. Leads
further argued that nearly three quarters of the banking customers mentioned teller
courtesy as a key consideration in selecting a bank.
Reichheld75 Sasser 1990 have recognized the benefits that customer retention
delivers to a bank supporting statement, the longer a customer stays with a bank
the more utility the customer generates. This is based on time a customer spends
with a bank. The Banks have to bear higher initial costs of introducing and
attracting a new customer, increases in both the value and amount of purchases, the
customer‘s better understanding of the bank positive words of mouth promotion.
74
Anderson, Eugene W, Claes Fornell and Don Lehman (1992), ―Perceived Quality, Customer
Satisfaction, Market Share and Profitability‖, working Paper, Department of Marketing.
University of Michigan
75
Reichheld, F.F. and Sasser, E.W. (1990), ―Zero Defections: Quality comes to Service‖,
Harvard Business Review, September-October, pp.105-111.
46
Hart76 et al., 1990, The Bank‘s response can guide to customer against their
complaints states ranging from dissatisfaction to satisfaction. In reality, anecdotal
evidence guide that when the service provider accepts responsibility and resolves
the complaints, the customer becomes ―bonded‖ to the business.
Anderson and Narus, 1990 measured trust as a feature with a great influence on
the degree of satisfaction at the level of the relationship between producers and
consumers through distribution channels in banks.
Zeithaml et al., 1990, defined customer satisfaction is the outcome of a customer‘s

perception relative to the value expected from transactions or relationships with
competing vendors.
Parasuraman et al, 199177; argued that SERVQUAL is an instrument for

measuring service quality performance; based on this approach he developed the
use of perceptions in confirmation/disconfirmation paradigm that is related to
perception of performance.
76
C. Hart (1990), Service Breakthrough: Changing the Rules of the Game, New York: Free
press.
77
Parasuraman, A., Beery, L.L. and Ziethaml, V.A. (1991), “Refinement and Reassessment of the
SERVQUAL Scale”, Journal of Retailing, vol.67, winter, pp.420-450.
47
Parasuraman, Zeithmal and Berry Service quality is the degree and direction of
discrepancy between consumer‘s perceptions and expectations in terms of different
but relatively important dimensions of the service quality, which can affect their
purchasing behavior.
Bitner78 1990, Bolton and Drew 1991; Parasuraman et al 1998 argued that
customer satisfaction is an antecedent of service quality, while others believed that
it is service quality that leads to customer satisfaction and behavioral intentions.
Carrillat et al., 2009; Chia et., 2008; Molinari et al., 2008; Ott, 2008.
Parasuraman et al., (1985, 1988) searched that the SERVQUAL model was made
of ten dimensions of service quality when created; tangibles, reliability,
responsiveness, communication, credibility, security, competence, courtesy,
understanding the customer, and access, but later on these dimensions were
reduced to five because some dimensions were overlapping (communication,
credibility, security, competence, courtesy, understanding customers and access)
and they included, Tangibles- physical facilities, equipments, and staff appearance.
Reliability- ability to perform the promised service dependably and accurately;
Responsiveness- willingness to help customers and provide prompt service;
Assurance- knowledge and courtesy of employees and their ability to inspire trust
and confidence; Empathy- caring, individual attention the firm provides its
customers.
78
Bitner, M. J. (1992). Servicescapes: the impact of physical surroundings on customer and
employees. Journal of Marketing, 56, 57-71.
48
Douglas et al define service quality as an attitude formed by long term, overall
evaluation of performance.
Gummesson said that service quality must be viewed in conjunction with service
productivity and profitability.
Parasuraman 1985, developed the first version of SERVQUAL based on a series

of studies.
Smith and Houston (1982), Parasuraman et al., (1988) explained and

operationalised service quality as a difference between consumer expectations of
‗what they want‘ and their perceptions of ‗what they get‘. Based on this
conceptualization and operationalization, they proposed a service quality
measurement scale called as ‗SERVQUAL‘ scale. Validity of the difference
between perception and expectation (P-E) measurement framework has also come
under severe criticisms due to problems with the conceptualization and
measurement of expectations components of the SERVQUAL scale. While
perception (P) is definable and measurable in a straight forward manner as the
consumers‘ belief about service is experienced, expectation (E) is subject to
multiple interpretations and such has been operationalised differently by different
authors and researchers (Dabholkar et al., 2000; Babakus and Boller, 1992;
Teas, 1993).
49
SERVPERF Scale
Arasli et. al. (2005) studied service quality perceptions of Greek Cypriot bank
customers using SERVQUAL model. However, they extend the study by looking
at the relationship between service quality, customer satisfaction and positive word
of mouth. They found that the expectations of bank customers were not met where
the largest gap was obtained in the responsiveness-empathy dimension. In addition,
the reliability items had the highest effect on customer satisfaction, which in turn
had a statistically significant impact on the positive word of mouth.
Izah and Wan Zulqurnain (2005) and Sudin et. al. (2004) studied service
quality in the banking industry, found that studies are still considered scarce. They
studied service quality in banking in Malaysia. These two studies were conducted
on Islamic financial institutions and adopted the CARTER model as suggested by
Othman and Owen (2000; 2001). Considered study will be the platform for
discussing the issues on service quality and customer satisfaction in the Malaysian
banking industry.
Beerli and Martin (2004), Bernes and Howlett (1998); used SERVPERF
instrument with 17 items used was for collecting the data regarding the
respondent‘s perceptions in retail banking were identified with the help of factor
analysis whereas the impact of SERVPERF scores on overall attitude towards
retail banking was measured with the help of multiple regression analysis. The
important discriminant service quality factors among the three groups of banks
were identified with the help of two group discriminant analysis.
50
Bahia and Nantel (2000) suggested alternative scale for the measurement of
perceived service quality in retail banking. Their study found that when comparing
BSQ dimensions and SERVQUAL, it seemed that BSQ dimensions were more
reliable than SERVQUAL. On the other hand, Lassar et. al. (2000) studied service
quality using two major service quality constructs, SERVQUAL and
Technical/Functional Quality models to the private banking industry. They found
that Technical/Functional Quality-based model of service quality is better suited
compared to SERVQUAL-based model. Duncan and Elliot (2002) however
explored the relationship between customer service quality and financial
performance in Australian banks and credit unions. They found that there was
significant relationship between financial performance and customer service
quality scores.
Jabnoun and Al-Tamimi (2002) examined service quality at UAE commercial

banks using SERVQUAL model and included thirty items in the five dimensions
of SERVQUAL. When they tested the developed instrument for reliability and
validity, they found that the instrument had only three dimensions.
Hocutt, 1998 and Keaveney, 1995; found that service quality was also found to
have a positive relationship with customer retention.
Payne and Frow, 1997 and Reichheld, 1996; analyzed that retained customers is
profitable customers and customer retention rates can be connected to profitability.
The SERVPERF scale is found to be superior not only as the efficient scale but
also more efficient in reducing the number of items to be measured by 50 per cent.
51
Hartline and Ferrell, 1996; Babakus and Boller, 1992; Bolton and Drew, 1991
the SERVPERF scale is used to measure to service quality in retail banking.
Yavas et. al. (1997) studied service quality in the banking sector in Turkish
banking, their study found that overall service quality was a significant
determinant customer satisfaction, complaint behavior and commitment and
focused on the relationship between service quality on consumer satisfaction,
complaint behavior and commitment in Turkish bank.
Frei and Harker (1996) analyzed the efficiency with which each bank produces a
set of outputs from a set of inputs. The categories of inputs and outputs for each
process, they ranked the banks according to their efficiency score for each of the
banks. Frei and Harker (1997) developed an institutional aggregate process
efficiency score model. The aggregated score is used herein to analyze the role of
process efficiency in describing performance of a bank.
Frei and Harker (1996), demonstrated an extension of DEA to analyze the

relative efficiency of a given business process across multiple organizations after
determining the process-level efficiency score for each institution, the grade is
determined by normalizing the efficiency scores to a scale of 0% to 100%, with the
efficient banks scoring 100%. Frei, Harker, and Hunter (1997) studied banking
processes span five products and represent opening of accounts, error correction on
the part of the bank, and error correction on the part of the consumer for a
complete explanation of the retail banking.
52
Frei and Harker (1995) studied process variability in banking resulting variation
in customer‘s satisfaction. Services differ from production process. Management
not to know the details of a particular process and for there to be no institutional
knowledge of process designs resulting in variation.
Storbacka at al, 1994 found that Perceived service quality caused bank customers
to feel satisfied or dissatisfied.
Parasuraman et al, in 1994, criticized evaluation on performance based measure

in preference to the disconfirmation based measure, practice of measuring only
perceptions to determine service quality is widespread, such a practice does not
necessarily support the superiority of a performance based measure, emphasized
customer expectations measurement provide richer information and have more
diagnostic value. There is confusion with regard to the causal relationship between
customer satisfaction and service quality.
Parasuraman et al (1994), acknowledge that service quality is an antecedent of

customer satisfaction. it is argued that the issue of comparison norms and their
interpretation still remains unresolved in comparison standard for measuring
service quality.
Cronin and Taylor, 1994; Carman, 1990 criticized SERVQUAL on its

operational and measurement levels. These include the use of P-E difference score
as a measurement of perceived quality as opposed to performance based measure.
53
Swan and Tranwick, 1981 stated that desired or adequate service expectation
measure provide different satisfaction response.
Cronin and Taylor (1992) put criticism on the SERVQUAL scale. They provided
empirical evidence across four industries to corroborate the superiority of their
‗performance only‘ SERVPERF instrument over disconfirmation-based on
SERVQUAL Scale.
Parasuraman et. al. (1985, 1988, and 1991) stated that measuring quality in
services might be difficult due to the intangible nature of the service offering.
service quality have been carried out within the framework service quality model
(SERVQUAL instrument) developed by extensive research .
Gounaris et. al. 2003; Arasli et. al. 2005 used 22-item scale to study service
quality in different sectors of the services industry including financial institutions.
In the banking industry, the study on service quality has been studied by Yavas et.
al. (1997), Bahia and Nantel 2000; Lassar et. al., 2000; Duncan and Elliott,
2002; Jabnoun and Al-Tamimi, 2002; and Arasli et. al., 2005.
Parasuraman et al.1985 proposed that service quality is a function of the gap

based on the quality dimensions and their attributes.
54
The service quality model was derived from the magnitude and directions of five
gaps as follows: GAP model framed by Zeithaml V A , Parasuraman A and
Berry L L in 1985.
• Gap 1 (Understanding): the difference between consumer expectations and

management perceptions of consumer expectations
• Gap 2 (Service standards): the difference between management perceptions

of consumer expectations and service quality specifications
• Gap 3 (Service performance): the difference between service quality

specifications and the service actually delivered
• Gap 4 (Communications): the difference between service delivery and

what is communicated about the service to consumers
• Gap 5 (Service quality): the difference between customer expectations of

service quality and customer perceptions of the organization‘s
performance
Gaps 1 to 4 affect the way in which service is delivered and these four gaps lead to
Gap 5. Therefore, the extent of Gap 5 depends on the size and direction of these
four gaps (Gap 1, Gap 2, Gap 3 and Gap 4).
55
Chapter 3
Service Quality
Management in
Banks
Service Quality management in Banks
Banking in India is generally fairly mature in terms of supply, product range and
reach, even though reach in rural India still remains a challenge for the private
sector and foreign banks. In terms of quality of assets and capital adequacy, Indian
banks are considered to have clean, strong and transparent balance sheets relative
to other banks in comparable economies in its region.
Consequently, we have seen some examples of inorganic growth strategy adopted
by some nationalized and private sector banks to face upcoming challenges in
banking industry of India. For example recently, ICICI Bank Ltd. merged the Bank
of Rajasthan Ltd. in order to increase its reach in rural market and market share
significantly. State Bank of India (SBI), the largest public sector bank in India has
also adopted the same strategy to retain its position. It is in the process of acquiring
its associates. Recently, SBI has merged State Bank of Indore in 2010.
The growing competition increases the competitiveness among banks. But, existing
global banking scenario is seriously posing threats for Indian banking industry. We
have already witnessed the bankruptcy of some foreign banks.
An all India survey by the National Institute of Bank Management has also
identified the lacunae in Indian banking as dissatisfaction among the customers
over the delays.
Goyal and Joshi (2011) concluded social and ethical aspects of Banking Industry
that Banks can project themselves as a socially and ethically oriented organization
by disbursement of loans merely to those organizations, which has social, ethical
and environmental concerns.
56
Goyal and Joshi (2011) found in study that small and local banks face difficulty
in bearing the impact of global economy therefore, they need support and it is one
of the reasons for merger. Some private banks used mergers as a strategic tool for
expanding their horizons. There is huge potential in rural markets of India, which
is not yet explored by the major banks. Therefore ICICI Bank Ltd. has used
mergers as their expansion strategy in rural market. They are successful in making
their presence in rural India. It strengthens their network across geographical
boundary, improves customer base and market share.
Fernando (2011) found in study that transparency and disclosure norms as part of
internationally accepted corporate governance practices are assuming greater
importance in the emerging environment. Banks are expected to be more
responsive and accountable to the investors. Banks have to disclose in their balance
sheets a plethora of information on the maturity profiles of assets and liabilities,
lending to sensitive sectors, movements in NPAs, capital, provisions,
shareholdings of the government, value of investment in India and abroad,
operating and profitability indicators, the total investments made in the equity
share, units of mutual funds, bonds, debentures, aggregate advances against shares
and so on.
Benedikter (2011) defines Social Banks as ―banks with a conscience‖. They focus
on investing in community, providing opportunities to the disadvantaged, and
supporting social, environmental, and ethical agendas. Social banks try to invest
their money only in endeavours that promote the greater good of society, instead of
those, which generate private profit just for a few. He has also explained the main
difference between mainstream banks and social banks that mainstream banks are
in most cases focused solely on the principle of profit maximization whereas,
social banking implements the triple principle of profit-people-planet.
57
Elangovan and Sabitha, 2011 found that there is no significant difference in the
level of satisfaction of the respondents belonging to different age, education and
occupation except income.
Dharmalingam et al., 2011 stated that all the service quality attributes are
positively correlated with customer satisfaction.
Gopalakrishnan et al., 2011 determined that Service quality and customer

satisfaction had a direct positive effect on customer‘s retention intentions out of
which Customer satisfaction is a stronger predictor for retention.
Hertog and Jong, 2011 studied service innovation as a new service or experience
consisting of service from multiple dimensions. Service dimension consist of
service offering, the new customer interaction, new delivery system, technological
customization of service, information and communication technology. Innovation
in service appears to be based on the weaknesses or deficiencies in the service
practices. Some companies are reluctant to implement the service innovation
because it is not quickly accessible by consumers, and incompatible with the needs
of consumers. Thus making the need for renewal that can be beneficial to the
growth of business service.
Vanpariya and Ganguly, 2010 examined that service quality is having a positive
and significant correlation with customer satisfaction, positive word of mouth and
loyalty intention.
58
Ombati et al (2010) examined the relationship between the technology and service
quality in the Kenyen Banking industry. The study reveal that there was a direct
relationship between the technology and service quality, the customers were
satisfied from the secure services, location of ATM‘s.
David Chubak & J. J. Kasper (2010) opined that Succeeding in the new card
environment will require innovative operating models that are designed to build
market share, loyalty and profits.
Hertog and Jong, 2010 stated that the purpose of innovation is to provide new
solutions for consumers. While in service businesses such as banks, how to touch
the emotions of consumers is very important. Because of the uniqueness in the
service sector especially in banking sector is quite difficult. One of its uniqueness
is the personal touch. In the banking sector service innovation is still limited and
some of them only explore the technology side, not much research is undertaken.
Juan Lu 2010 stated that service innovation is a process that consists of a new
concept and production, development and implementation of a behavior.
Edvarsdsson et al, 2010 discussed that Service is intangible, and can only be
perceived by service users. When the user services are competitors it will be very
easy to imitate, because the experience of the services directly perceived. The goal
of service innovation is to provide the benefit for customer and companies.
Junarsin (2010) suggest that innovation is the key to success to get a competitive
advantage in service industry. However, there are often gaps in carrying the
implementation of innovations by service companies, for instance, in innovative
ideas such companies do not always suit with the customer required.
59
Kirti Dutta and Anil Dutta, 2009 observed that Customer expectations are higher
than perceptions and this gap varies across the banking sector with tangibility
having the highest impact on overall customer satisfaction.
Khan and Mahapatra (2009) investigate the service quality of Internet Banking
based on seven quality dimensions. i.e. Reliability, accessibility, user friendliness,
privacy/security, efficiency, responsiveness using the factor analysis. It was found
that customers are satisfied with the reliability of the banks but dimension, user
friendliness are not satisfied.
Singla (2008) examined that how financial management plays a crucial role
industrialists growth of banking. It is concerned with examining the profitability
position of the selected sixteen banks of banker index for a period of six years
(2001-06). The study reveals that the profitability position was reasonable during
the period of study when compared with the previous years. Strong capital position
and balance sheet place.
Zhao, Casu and Ferrari (2008) used a balanced panel data set covering the period
of 1992-2004 and employing a Data Envelopment Analysis (DEA)-based
Malmquist Total Factor Productivity (TFP) index. The empirical study indicated
that, after an initial adjustment phase, the Indian banking industry experienced
sustained productivity growth, which was driven mainly by technological progress.
Banks' ownership structure does not seem to matter as much as increased
competition in TFP growth. Foreign banks appear to have acted as technological
innovators when competition increased, which added to the competitive pressure in
the banking market. Finally, our results also indicate an increase in risk-taking
behaviour, along with the whole deregulation process.
60
Uppal (2008) analyzed that the quality of e-banking services in the changing
environment. Studies show that the customers of e-banks are satisfied with the
different e-channels and their services in the spread of e-banking services. Results
also suggest some measures to make e-banking service more effective in the future.
The present study is mainly concerned with the Indian banking industry in general
and particular those banks that are producing service through e-channels i.e. e-
banks. The sample size of bank customers is 25. The data is collected through pre-
tested and well structured questionnaire in Ludhiana, Punjab in May, 2006.
Subbaroo (2007) concludes the Indian banking system has undergone

transformation itself from domestic banking to international banking. However, the
system requires a combination of new technologies, well regulated risk and credit
appraisal, treasury management, product diversification, internal control, external
regulations and professional as well as skilled human resource to achieve the
heights of the international excellence to play its role critically in meeting the
global challenge. Subbaroo mainly concentrates on the major trends that change
the banking industry world over, viz. consolidation of players through mergers and
acquisitions globalization of players, development of new technology, universal
banking and human resource in banking, profitability, rural banking and risk
management. Banks will have to gear up to meet stringent prudential capital
adequacy norms under Basel I and II, the free trade agreements. Banks will also
have to cope with challenges posed by technological innovations in banking.
Uppal and Kaur (2007) analyzed the efficiency of all the bank groups in the post
banking sector reforms era. Time period of study is related to second post banking
sector reforms (1999-2000 to 2004-05).
61
Uppal and Kaur concluded that the efficiency of all the bank groups has
increased in the second post banking sector reforms period but these banking
sector reforms are more beneficial for new private sector banks and foreign banks.
The studies also suggest some measures for the improvement of efficiency of
Indian nationalized banks. The sample of the study in Indian banking industry
which comprises five different ownership groups and the ratio method is used to
calculate the efficiency of different bank groups. New private sector banks are
compelling with foreign banks for continuous improvement in their performance.
Bitner (2007) expressed that innovation in service is less disciplines and less
creative than in manufacturing and technologies sector.
Vanniarajan, 2007, found that the organizational performance of commercial

banks is significantly and positively linked with the internal service quality.
Miles, 2006, emphasized the need of Innovation in services appears to be based on

the weaknesses or deficiencies in the service practices; thus making the need for
renewal that can be beneficial to the growth of business services.
Kuusisto, Riepula and Sundbo (2006) have the same opinion that the problems of
service innovation are rather difficult to be standardized. This is because services
are intangible, but depending on the services sector and its target segment. Many
small and medium scale enterprises in the service innovation implemented on an
ad hoc basis. That means not made formally, because not all customers need,
particular segment only (customized). The bank provides a solution to the
consumer installment payment, as customized scheme in the settlement of credit in
the bank.
62
Tiwari, Bure, and Harstatte (2006) explored the various avenues using the
mobile technology for expanding online banking services, as mobile based
applications gain popularity. the global scenario and technology used in mobile
financial services provides a global overview over services offered and
simultaneously analysis various MFS technologies.
Onut et al., (2006), emphasized banks and other service providers realize the
importance of Customer Relationship Management (CRM) and its potential to help
them acquiring new customers, retain existing ones, and maximize their lifetime
value.
Dev (2006) stated that financial inclusion is significant from the point of view of
living conditions of poor people, farmers, rural non-farm enterprises and other
vulnerable groups. Financial inclusion, in terms of access to credit from formal
institutions to various social groups Apart from formal banking institutions, which
should look at inclusion both as a business opportunity and social responsibility,
Dev conclude that role of the self-help group movement and microfinance
institutions is important to improve financial inclusion. The study suggested that
this requires new regulatory procedures and de-politicization of the financial
system.
Uppal (2006) analyzed the profitability of four major bank groups, i.e., SBI and its
associates, nationalized banks, new private sector banks and foreign banks in the
post-reforms era and concluded that there is a significant difference in the
profitability of various major bank groups.
63
Harold (2006) has abstracted the balance score card (BSC) framework to develop
a comprehensive performance measurement and management tool for IT in
banking. Harold illustrated how a cascade of balanced scoreboards can be
instrumental in the banking technology effectiveness of banks in India to ensure
better performance measurement.
Srivastava (2006) concluded that in post nationalization period witnessed an

unprecedented expansion of banking industry in India. However accompanied
inefficiency and poor financial health to overcome this problem and improve the
efficiency of banks, various tectonic measures were taken since 1991. This has
resulted in improvement in productivity, profitability and strengthening of
financial position of the banks so much that they are outshining those of advanced
notions .However banks have still have to go a long way to sustain their
Competitive success. Indian Commercial Banks also need to enhance their system
and procedure to international standards and also simultaneously fortify their
financial position.
Elango & Gudep, 2006 and Anger et al., 1999, The banking industry is the
largest industry in the service sector which caters to the needs of the different
categories of people. Notably, the service quality of commercial banks tends to
play a dominant role in high involvement industries.
Nelson Oly Ndubisi and chan Kok Wah 2005, found five key dimensions,
namely: competence, communication, conflict handling, trust and relationship
quality, discriminate between customers in terms of perceived relationship quality
and customers satisfaction.
64
Moreover bank customer relationship quality discriminates between satisfied
customers and those who are not. This study adds value by unveiling the key
antecedents of relationship quality and customer relationship management.
Bhaduri (2005) discussed about the use of CRM for banking sector in developing
countries; CRM is variously misunderstood as a fancy sales strategy, an expensive
software product. CRM is a simple philosophy that places the customer at the heart
of a business organization‘s processes, activities, and culture to improve his/her
satisfaction of service and, in turn, it will maximize the profits for the organization.
Bhaduri (2005) further argues that CRM made bankers realize that the purpose of
their business is to ―create and keep a customer‖ and to ―view the entire business
process as consisting of a tightly integrated effort to discover, create, and satisfy
customer needs‖.
Mariappan (2005) analyzed that IT revolution has brought stunning changing in

the business environment perhaps no other sector has been influenced by advances
in technology as much as banking and finance, as a result, the banking pose a
totally new look today. Technology has been used a strategies to win market and
customers.
Rammohan and Ray (2004) compared performances of 58 public sector, private

sector and foreign banks for the period 1992-2000, using a revenue maximization
efficiency approach.
65
Patnaik (2004) emphasized that shared ATMs is taking place and they are
mutually beneficial. This mushrooming new dimension of shared ATMs has
increased non-interest income of the banks. This is the most popular e-channel and
widely used in all the bank groups.
Sachdev et al, (2004), studied Indian banks have introduced new customer
friendly service like 24 x 7 - day and anywhere banking, internet banking, online
payment services, mobile banking, extended business hours, ATM network, etc. In
today‘s competition in Indian banking industry, customers have to make a choice
among various service providers by making a trade-off between relationships and
economies, service and efficiency or trust and products, so on the basis of services
customer takes decision of having credit card.
Zeithaml and Bitner, observed that (2003), Customers perceive services in terms
of the quality of the service and how satisfied they are overall with their
experiences of using product or service.
Yavas, Benkenstein, Stuhldreier, 2004 and Brown and Swartz, 1989; analyzed
on the basis of customer perception designing a service delivery system that meets
customer needs, and enhancing the level of service performance are all pertinent
objectives for banks seeking to gain and retain a competitive advantage.
66
Bartel (2004) studied the relationship between human resource management and
establishment performance of employees on the manufacturing sector. Using a
unique longitudinal dataset collected through site visits to branch operations of a
large bank, Because branch managers had considerable discretion in managing
their operations and employees, the HRM environment could vary across branches.
Site visits provided specific examples of managerial practices that affected branch
performance. An analysis of responses to the bank‘s employee attitude survey that
controls for unobserved branch and manager characteristics shows a positive
relationship between branch performance and employees‘ satisfaction with the
quality of performance evaluation, feedback, and recognition at the branch—the
―incentives‖ dimension of a high-performance work system. In some fixed effects
specifications, satisfaction with the quality of communications at the branch was
also important.
Khan, 2004 Online banking refers to systems that enable bank customers to access
accounts and general information on bank products and services through a personal
computer. It provides the convenience of banking anytime from one's home or
work, without having to incur some of the costs associated with a branch visit, like
going to the branch and waiting on lines.
Jackie L. M. Tam, 2004 found that customer with higher perceptions of the value
of the service results in turn with greater satisfaction.
67
Gelade and Ivery (2003) examined relationships between human resource
management (HRM), work climate, and organizational performance in the branch
network of a retail bank. Significant correlations were found between work
climate, human resource practices, and business performance. The results showed
that the correlations between climate and performance cannot be explained by their
common dependence on HRM factors, and that the data are consistent with a
mediation model in which the effects of HRM practices on business performance
are partially mediated by work climate.
Ranaweera and Neely, 2003; Zeithaml, Berry and Parasuraman, 1996;

Alexandris, Dimitriadis and Markata, 2002; Reichheld, 1993 critically studied
and reviewed Service quality has received much attention because of its obvious
relationship with costs, financial performance, customer satisfaction and customer
retention.
Llorens Montes et al., 2003 found that Customers‘ perceptions, attitudes and
intentions are being affected by employees‘ experiences and attitudes who are the
internal customers of the organization.
Debashish, 2003, reviewed the Rust and Oliver model had been used to study the
service quality in banks. The study revealed that ICICI bank and HDFC BANK
provide better quality service in Moradabad region and Delhi.
SAP AG, 2002, banking institutions face many challenges including global
competition for deposits, loans, underwriting fees, increasing customer demands,
shrinking profit margins, and the need to keep up with the new technologies.
68
Clark (2002) examined the relationship between employees‘ perceptions of
organizational climate and customer retention in a specific service setting, viz. a
major UK retail bank. Employees‘ perceptions of the practices and procedures in
relation to customer care at their branch were investigated using a case study
approach. The findings revealed that there is a relationship between employees‘
perceptions of organizational climate and customer retention at a micro-
organizational level. He suggested that organizational climate can be subdivided
into five climate themes and that, within each climate theme, there are several
dimensions that are critical to customer retention.
Xu, et al., 2002, found Customer Relationship Management (CRM) came into the
power when banking institutions were getting more and more competitive. The
focus of CRM helped banks to understand the customer‘s current needs, what they
have done in the past, and what they plan to do in the future to meet their own
goals.
Crosby (2002), reviewed the intelligent use of information about customer needs
will create long-term two way relationship with the customers. This will bring
many advantages to the banking sector since long term customers are less costly to
serve and smooth running relationships are less resource demanding. In general,
CRM for any organization consists of two tasks i.e., customer acquisition and
increased sales to existing customers. It is often justified by the phrase, ―Make the
right offer at the right time to the right customer‖.
69
Hull, 2002, Kayak and Kucukemiroghu, 1992; The banking industry is highly
competitive, with banks not only competing among each other; but also with non-
banks and other financial institutions. Most bank product developments are easy to
duplicate and when banks provide nearly identical services, they can only
distinguish themselves on the basis of price and quality. Customer retention is
potentially an effective tool that banks can use to gain a strategic advantage and
survive in today‘s banking competitive environment.
Wirtz, 2002, Customer satisfaction is influenced by price, product quality; service

quality, process of total service and brand image.
Dabholkar and Bagozzi, 2002 studied traditional service quality and compared
with recent service quality in banks. service quality outcomes in which face-to-face
interaction between customers and employees was the primary focus in traditional
services offerings. Recently, however, technology has had a remarkable influence
on the growth of service delivery options and a profound effect on services
marketing stated by Bitner, Brown and Meueter, 2000.
Ballabh (2002) examined various techniques to increase the employees‘

productivity.
Roger, 2002 viewed service quality is as the best pre requisite for the success of
service organizations like banks.
70
Brady & Cronin Jr., 2001, proved that the Nordic as well as American
perspective define the customer‘s perception of the organization‘s technical and
functional quality, service product, service delivery and service environment,
which reliability, responsiveness, empathy assurance and tangibles are associated
with the service experience.
Mols, 2000 found in study that Customer acceptance of the new automated
channels of service delivery in banks brings a dramatic change in the way retail
banks build and maintain a close relationship with their customers.
Globalization had led to change in business environment. Gadrey et all.,1995:-

Sundbo and Gallouj, 2000, had emphasis on emerging new technologies, and
deregulation have led to restructuring of financial service industries in many
countries. Consequently, companies today compete to satisfy their customer by
implementing service innovations in order to win the customer's heart. Direct
interaction with customer has been argued to be a key feature of service innovation
activities.
Lasser et al, (2000); Angur et al, (1999); Johnston, (1997); Stafford, (1996);
Avkiran, (1994); analyzed that Service quality is one of the pivot success factors
that influence the competitiveness of an organization.A bank can create
differentiate itself from competitors by providing innovative quality service.
Service quality is one of the most attractive areas for researchers over the last
decade in the retail banking sector.
71
Pal, Mukherjee and Nath (2000) studied the efficiency of 68 major Indian
commercial banks for the year 1999. They took 27 public sector banks, 20 private
sector banks and 21 foreign sector banks for their study. In study five output
variables were taken. They were: deposits, net profits, advances, non-interest
income and spread. Similarly, five input variables taken were net worth,
borrowings, operating expenses, number of employees in the country and number
of bank branches in the country. They also identified weak banks.
Sunbo and Gallouj (2000) suggest that service innovation activity generally
begins with the concrete problems between the company and clients. Companies
and consumers work together in finding new solutions, which will later be formally
developed into services offered to the market.
Paulin et al., (1999) studied in Mexico, Canada and the USA in seven commercial
banks both senior bank officers and account managers believed that their banks
were client-oriented and particularly interested in: having in-depth knowledge of
their clients, customising services, measuring client satisfaction and developing
long-term relationships with their client-companies. However, the bank's
managerial processes facilitating the work of the account managers and the
organizational culture were not adequate to support the bankers' expression that
they conducted a client-oriented business.
Paulin et al. (1997; 1998; 1999) preferred to use the term ``external
effectiveness'' of service management rather than external efficiency. The firm is
effective in creating customer-perceived value and that the concept of value
encompasses more than just economic and traditional accounting variables.
72
Krishnan et al, (1999), found in study that level of customer satisfaction is
becoming the major target of all banks to increase the market share. More
specifically, the cost of retaining existing customers by enhancing and innovative
products and services that are perceived as being important is significantly lower
than the cost of winning new customers.
Barnes and Howlett (1998), the concept of relationships, as seen through the eyes
of the customer, by focusing on the client as the final arbiter of business
effectiveness, the successful service firm is obliged to adopt an integrated client-
oriented style of management. This ―external effectiveness'' and longer-term
profitability would result from the client: being very satisfied, rating service
quality highly, intending to continue purchasing the services, desiring to purchase
new services and willing to recommend the firm to others.
Clark (1997) studied the impact of customer-employee relationships on customer

retention rates in a major UK retail bank. He revealed that employee and customer
perceptions of service quality are related to customer retention rates and that
employee and customer perceptions of service quality are related to each other.
Das (1997) estimated the technical, allocative and scale efficiency of scheduled
commercial banks for various pre-reform and reform years. In his study, Das
computed the efficiency measures for the public sector commercial banks indicate
that the State Bank Group, in general, improved in terms of overall efficiency
during the 26 year period. Das found that inefficiency was technical in nature,
which showed that there is underutilization or wastage of resources rather there
being allocative inefficiency.
73
Oliver, (1997), Zeithaml et al, (1996), Rust & Oliver, (1994); Parasuraman et
al, (1985, 1988); Cadott et al, (1987); Churchill & Surprenant, (1982);
highlighted that Consumer satisfaction have been considered the primary
constructs in the area of service marketing because ultimately they lead to the
development of consumer loyalty or re-patronization of a product or service
satisfaction.
Paulin et al., (1997; 1998; 1999) analyzed relational as well as techno-economic
aspects are important for effective service management in commercial banking.
Strong relationships, as measured by relational norms, have been shown to be
linked to external effectiveness or the creation of client-perceived value in
commercial banking.
Cheng et al., 1996, studied service quality by identifying the factors that influence
customer‗s expectation and perception of service quality, and investigating their
impact on customer satisfaction. Financial service sector including bank are no
different. Banks are struggling to improve service and proclaim that they are
customer focus. Financial institutions have undergone intense competition and a
change in customers‘ expectations over the last few years had been reported.
Cooper & Edgett, 1996, found the varied service products being offered banking
services and their interface with the information technology like banking on
internet, electronic delivery channels, etc. help the banks in seizing the market.
74
Levesque and McDougall (1996) investigated the major determinants of customer
satisfaction and future intentions in the retail bank sector. They identified the
determinants which include service quality dimensions (e.g. getting it right the first
time), service features (e.g. competitive interest rates), service problems, service
recovery and products used. It was found, in particular, that service problems and
the bank‘s service recovery ability have a major impact on customer satisfaction
and intentions to switch.
Reichheld (1996), Zeithaml et al. (1996) and Storbacka et al. (1994); it was
intuitively assumed that the degree of perceived value would be manifested by the
business client's final judgement of service quality, satisfaction, purchase
intentions and willingness to recommend. The link between these indicators of
service management effectiveness and longer-term profitability represent service
quality.
Reidenbach et al. (1995) have traced the evolution of commercial banking in

North America through the sequential stages of production, sales and then
marketing philosophies. They conclude that commercial banking should now move
into the next stage where client-perceived value is the predominant philosophy.
However, deregulation and innovations in technology have led to the restructuring
of commercial banking in Europe and North America.
Rust, Zahorik & Keiningham, 1995, stated that the service quality is hard to
measure.
75
Parasuraman, Zeithamel, and Berry, 1994 identified the challenges that service
manager‘s face is how to deliver services of high quality. The benchmarking model
developed here assists in identifying those branches of a bank that deliver superior
quality, and aid the rest in their quest for quality improvements.
Rust & Oliver, 1994, identified service quality as a three dimensional concept.
McCabe et al. (1994) indicated that more than 90 percent of banks, building
societies and insurance companies at present are implementing some form of
quality initiatives.
Anderson et al, (1994); La Barbera et al, (1983), cited that Customer satisfaction
is an outcome of purchase and use resulting from the comparison of the customers‘
expectations and actual performance of the product purchased with respect to the
expected consequences.
DeshpandeÂ et al. (1993) suggested that the best business performance would be
achieved by firms which were client-oriented, innovative and had a market-type
organisational culture.
GroÈnroos (1992) emphasized the importance of concentrating on the firm's

external more than internal efficiency, and on its processes for developing
customer-perceived quality rather than its organizational structure. This last
statement should be amended by substituting the term value for quality, since
quality is only one type of customer-perceived value
76
Holbrook, (1994) External efficiency is a measure of business performance
emphasizing the external, or client focused, rather than the internal consequences
of doing business. Whereas internal efficiency is concerned with productivity and
costs, external efficiency comes from the customer's perspective and stresses the
importance of increased revenue generated over time by the customer relationship.
Bateson, (1992) Commercial banking is an example of a professional business-to-

business service industry characterized by the dyadic relationship between a
contact person, the account manager, and the business client. The account manager
plays a ``boundary spanning'' role between the market of business clients and the
internal management processes and organizational culture of the bank.
Service quality (SQ) is considered by many as the key to gaining competitive

advantage, and its importance for the Banking industry, in particular, has been
documented in Roth and van der Velde (1991, 1992).
Banks have tied up with service providers in telecom and power sectors like
MTNL, BSES and cellular service providers for allowing their customers to make
bill payments online. In India, new private sector banks like ICICI Bank, HDFC
Bank, Global Trust Bank and UTI Bank, have taken the lead in e-banking. Among
the foreign banks, Citibank, has noticeable presence, while others like Federal
Bank, HSBC Bank, Deutsche Bank and ABN Amro Bank, are moving towards
becoming big players in e-banking. Even the state run banks like SBI and Union
Bank of India have realized the advantages of such services.
77
ICICI Bank, the first bank to offer e-banking services in India has more than one
lakh regular internet user accounts, of which more than 25 percent are of NRIs.
The bank has viewed advanced information technology as a managerial and
competitive tool and has tried to harness technology to the maximum possible
extent to deliver superior customer services.
HDFC Bank the first time in India made the e-shopping experience secure online
and real time with the launch of its payment gateway. This will allow any
Visa/Master credit card holder anywhere in the world to make payments for global
services over the Internet. The bank has tied up with 15 portals and is in talk with
several others to offer secure business to customer e-com. transactions. The first
secure, on-line and real-time e-com. credit card transaction in the country was done
on the Easy.2 shoppe.com shopping mall, enabled by HDFC bank on a Visa card,
heralding the launch of the payment gateway. HDFC Bank also offers a direct
debit option whereby its customer can pay for the goods or services by a secure
password enabled transfer of funds from their account to the merchant account.
The State Bank of India (SBI) made a quiet foray into net banking. The country‘s
largest commercial bank launched on-line SBI - an account browsing facility over
the Net for customers in eight select branches including four NRI branches.
78
Chapter 4
Research
Methodology
Research Methodology
The study focused on service quality assessment in banking sector in U.P. The
SERVQUAL model which is a 22-item instrument had been used empirically
through tested, verified and validated reliability test. The 22-item verified
SERVQUAL instrument is designed could be used to improve service performance
in this competitive world. This 22-item scale SERVQUAL comprises of two parts
one is expectation and another is perception. Empirical study focused upon the two
public sector bank and two private sector banks existing in U.P having maximum
market share and value. The respondents were given questionnaire to give their
opinion on different dimension in two segments i.e.; expectation and perception.
Objective of Study
1. To measure service quality gap between the perceived and expected service
provided by public sector comparing with private sector banks in Uttar
Pradesh.
2. To analyze which bank provide better services in the SERVQUAL

dimensions.
Construct measures
The two major constructs were developed by the researcher one is service quality
assessment/measurement and another is banking sector.
79
Research Design
Data collection was done through structured questionnaire by survey method.

Questionnaire comprising of four sections namely A, B, C, D and E. Section A
consists of 22 questions on SERVQUAL dimension related to expectation. Section
B consists of 22 questions on SERVQUAL dimension related to perception.
Section C consists of features of banking sector whether public or private and
Section D consists of acceptance of different service quality factors by
respondents. Section E consists of demographic profile of respondents.
All the items in section A and section B were presented as statements on the
expectation and perception of respondents having services of banks in U.P. The
scale used in section A and B is Likert scale that vary from 1 strongly disagree to 5
strongly agree. In section C respondents are asked to give point out of 100 points
on different factors of SERVQUAL used in banking sector. In section D
respondents are asked to rank the different dimension of service quality in banking.
In section E the information related to respondents related to their demographic
profile in is collected.
80
Proposed Model: Conceptual framework for service quality measurement in
Indian bank.
Pilot study
The prior to the final analysis, a pilot survey of 60 respondents were analyzed and
studied. The pilot study was helpful in finalizing questionnaire, construct,
dimension, sections and finally eliminating confusion as well as ambiguities and
errors. Pilot study was helpful in finalizing the method and descriptive analysis.
Data had been collected using the contact list. The questionnaires were distributed
to the customers visiting banking branches during working hours. Contact list was
provided by the banking manager. Total 600 questionnaires were filled randomly
visiting banking branches of public and private sector banks. The 200
questionnaire were incomplete. So, discarded from the study
81
Only 400 questionnaires were taken for study. Thus the response rate is 75%. This
is relatively high rate of return.
The sampling procedure used for the study was stratified random sampling. The
stratification has been done based on the region Lucknow, Bareilly, Varanasi and
Allahabad and nature of banking whether public or private sector banks. While
selecting the banks types non-probabilistic convenience and judgmental sampling
technique were used but not found suitable hence stratified random sampling was
found best.
Research method used for analysis
The data collected from sample were analyzed with statistical package for social
sciences (SPSS) using techniques that included descriptive analysis.
Statistical tests such as Mean, Standard deviation, Pearson‘s correlation,

Cronbach‘s Alpha, ANOVA, and factor analysis were used for the best results.
ANOVA is a statistical technique used to determine, on the basis of one dependent

measure, whether samples are from populations with Equal means (Hair et al.
1995). It is used to assess group differences on a single metric dependent variable.
In this study, ANOVA was employed to estimate the variance between the
dependent variable, behavioral outcome and the independent groups of variables.
Model 1: Perception/Expectation = f (Tangibility)

Model 2: Perception/Expectation = f (Reliability).
Model 3: Perception/Expectation = f (Responsiveness)
Model 4: Perception/Expectation = f (Assurance)
Model 5: Perception/Expectation = f (Empathy)
82
Chapter 5
Data analysis
Analysis 1
To Analyze Mean Scores and standard deviation for Individual

features of Service Quality dimensions, Customer Satisfaction
(Perception) and (Expectation) in Banking customer behavioral
response
H0: Customers do not perceive significant service quality gaps in overall

banking sector.
H1: Customers do perceive significant service quality gaps in overall

banking sector.
Table 1: Mean Scores and standard deviation
Descriptive
Statistics Std.
N Mean Mean Deviation
(P) (E) (P-E)
modern looking
equipment 400(tangibility) 3.58 4.17 -0.59 1.073
physical
facilities 400(tangibility) 3.63 3.73 -0.1 0.84
neat appearing 400(tangibility) 3.57 3.78 -0.21 0.861
material
associated with
the service
visually
appealing 400(tangibility) 3.58 3.88 -0.3 0.886
promise to do at
said time 400(Reliability) 3.4 3.79 -0.39 1.013
sincere interest
in solving
problem 400(Reliability) 3.31 3.7 -0.39 1
83
perform the
service right the
first time 400(Reliability) 3.31 3.63 -0.32 1.004
service at the
time they
promise to do 400(Reliability) 3.35 3.81 -0.46 0.978
insist on error 3.83 -0.56
free records 400(Reliability) 3.27 0.959
tell customers
exactly when
services will be 400(Responsive
performed ness) 3.42 3.82 -0.4 1
prompt service 400(Responsive
to customers ness) 3.36 3.62 -0.26 1.009
willing to help 400(Responsive
customers ness) 3.2 3.45 -0.25 1.045
employees never
be too busy to
respond to 400(responsiven
customers ess) 3.2 3.55 -0.35 0.997
employee
behave instill
confidence in
customers 400(Assurance) 3.49 3.7 -0.21 0.965
customers feel
safe in
transactions 400(Assurance) 3.58 3.88 -0.3 1.003
employees are
courteous with
customers 400(Assurance) 3.38 3.74 -0.36 0.95
employees have
knowledge to
answer 400(Assurance) 3.45 1.003
84
customers'
questions 3.71 -0.26
customers get
individual
attention 400(Empathy) 3.23 3.7 -0.47 1.127
bank operating
hours convenient
to all their 3.73 -0.22
customers 400(Empathy) 3.51 0.918
employees who
give customers
personal 400
attention (Empathy) 3.38 3.68 -0.3 0.988
banks will have
their customers
best interest at
heart 400(Empathy) 3.35 3.7 -0.35 1.005
employees will
understand
specific needs of
their customers 400(Empathy) 3.41 3.54 -0.13 0.932
Valid N
(listwise) 400
Hence Null hypothesis rejected.
The table indicates that the modern looking equipment variable

(Tangibility dimension) has the greatest service gap of -0.59 followed by
insist on error free records (Reliability dimension) -0.56.
The table indicates that the physical facilities variable (Tangibility

dimension) lowest service gap of -0.1 and employees of bank will
understand specific needs of their customers (Empathy) -0.13.
85
The table indicates that the (Empathy dimension) predicting variables
show lowest service gap at all variables customers get individual
attention (Emp1) -0.47, bank operating hours convenient to all their
customers (Emp2) -0.22, employees who give customers personal
attention (Emp3) -0.3, banks will have their customers best interest at
heart (Emp4) -0.35, employees will understand specific needs of their
customers (Emp5) -0.13. Followed by (Assurance dimension) predicting
variables show second lowest service gap at all variables employee
behave instill confidence in customers (Ass1) -0.21, customers feel safe
in transactions (Ass2) -0.3, employees are courteous with customers
(Ass3) -0.36, employees have knowledge to answer customers' questions
(Ass4) -0.26. Followed by (Responsibility dimension) predicting
variables show third lowest service gap at all variables tell customers
exactly when services will be performed (Res1) -0.4, prompt service to
customers (Res2) -0.26, willing to help customers (Res3) -0.25,
employees never be too busy to respond to customers (Res4) -0.35
The table indicates that the (Reliability dimension) predicting variables

show first highest service gap at all variables promise to do at said time
(Rel1) -0.39, sincere interest in solving problem (Rel2) -0.39, perform
the service right the first time (Rel3) -0.32, service at the time they
promise to do (Rel4) -0.46, insist on error free records (Rel4) -0.56.
Followed by second highest (Tangibility dimension) predicting variables
show second highest service gap at all variables modern looking
equipment (Tang1) -0.59, physical facilities (Tang2) -0.1, neat appearing
(Tang3) -0.21, material associated with the service visually appealing
(Tang4) -0.3.
86
Chart1 –Relative Gap scores
The Pie chart shows that Empathy dimension rank 1; Assurance

dimension rank 2, Responsiveness dimension rank 3, Reliability
dimension rank 4 and Tangibility dimension rank 5 correlating on the
basis of relative service gap scores on selective variables of
SERVQUAL dimension in overall banking sector.
87
Mean Scores and standard deviation for Individual features of
Service Quality, Customer Satisfaction (Expectation) and
behavioural response
Table 2: Mean Scores and standard deviation

Descriptive Std.
Statistics N Mean Deviation
modern looking
400 4.17 .788
equipment
physical
400 3.73 .841
facilities
neat appearing 400 3.78 1.002
material
associated with
the service 400 3.88 .797
visually
appealing
promise to do at
400 3.79 .960
said time
sincere interest
in solving 400 3.70 .989
problem
perform the
service right the 400 3.63 1.008
first time
service at the
time they 400 3.81 1.007
promise to do
insist on error
400 3.83 .889
free records
tell customers
exactly when
400 3.82 1.038
services will be
performed
88
prompt service
400 3.62 .966
to customers
willing to help
400 3.45 1.054
customers
employees never
be too busy to
400 3.55 1.017
respond to
customers
employee
behave instill
400 3.70 1.014
confidence in
customers
customers feel
safe in 400 3.88 .842
transactions
employees are
courteous with 400 3.74 .954
customers
employees have
knowledge to
answer 400 3.71 1.077
customers'
questions
customers get
individual 400 3.70 1.158
attention
bank operating
hours convenient
400 3.73 .895
to all their
customers
89
employees who
give customers
personal 400 3.68 1.013
attention
banks will have
their customers
400 3.70 .912
best interest at
heart
employees will
understand
400 3.54 1.042
specific needs of
their customers
Valid N
400
(listwise)
90
Analysis 2
Analysis of relationship between tangibility perception of Service
quality dimensions and customer perception in banking sector
H0: Customers do not perceive correlation in between tangibility

perception of service quality dimensions in banking sector
H1: Customers do perceive correlation in between tangibility perception

of service quality dimensions in banking sector
Item Statistics- Tangibility dimension
Table 3: Reliability test-Tangibility dimension

Cronbach's Std.
Alpha=.620 Mean Deviation N
modern
looking 3.58 1.073 400
equipment
physical
3.63 .840 400
facilities
neat
3.57 .861 400
appearing
material
associated
with the
3.58 .886 400
service
visually
appealing
91
The reliability coefficients of all the psychometric scales are used. With
respect to predictor of service quality scales, the Cronbach‘s alpha
coefficient of variables ranged from 0.620 to 0.708 (Coeficient 0.6 and
above). The alpha reliability indicates high internal consistency of all
four predictors, with α=0.620 on Tangibility dimension, these scores are
accepted according to Nunnally (1967).
The Item statistics table provides the mean scores, SD results. The SD for
each of the scores indicates the respondents‘ views varied considerably
across the sample. The mean score and SD indicates that respondents
agreed that the Banks provide modern looking equipment (mean=3.58,
SD=1.073), Physical facilities (mean=3.63, SD=0.840), Neat appearing
(mean=3.57, SD=0.861) and material associated with the service visually
appealing (mean=3.58, SD=0.886).
Respondents perceived that they agree and influenced by Banks provide

modern looking equipment (mean=3.58, SD=1.073), Physical facilities
(mean=3.63, SD=0.840), Neat appearing (mean=3.57, SD=0.861) and
material associated with the service visually appealing (mean=3.58,
SD=0.886)
92
Table 4: Inter-Item Correlation Matrix- Tangibility dimension
material
associated
modern physi with the
looking cal neat service
equipme facili appeari visually
nt ties ng appealing
modern
looking 1.000
equipment
physical
.330 1.000
facilities
neat
.258 .382 1.000
appearing
material
associated
with the
.112 .405 .329 1.000
service
visually
appealing
All the correlations are significant at the 0.01 level.

The result is presented in inter-item Correlation Matrix shows that
Tangibility dimension in banks (r=0.329), are significantly related to
each other.
Thus null hypothesis is rejected and alternate hypothesis is accepted.
93
(According to Connolly and Sluckin, 1962 the r value 0.90-1.00 shows
the positive and strong relationship, 0.70-0.90 shows the good
relationship, 0.40-0.70 shows the moderate relationship, 0.20-0.40
shows the low relationship and the value less than 0.20 shows the weak
relationship.)
All of the variables in this study were found to be significantly positive

correlated. Inter-item correlation is used to examine possible
relationships between Tangibility dimension variables. The inter-item
correlation matrix reveals a statistically significant correlation is found
(r=0.329, p<0.01) Linear regression analysis was used to determine
whether the linear combination of Tangibility dimension variables show
significant positive correlation.
For all these Tangibility dimension measures mentioned independent

variables show statistically significant positive correlation. Modern
looking equipment (r2 =0.330, p<.01), physical facilities (r2 =0.382,
p<.01), neat appearing (r2 =0.405, p<.01), material associated with the
service visually appealing (r2 =0.329, p<.01)
94
Table 5: Summary Item Statistics
Maxim
um /
Minim Maxi Minim N of
Mean um mum Range um Variance Items
Item
3.589 3.573 3.628 .055 1.015 .001 4
Means
Item
.846 .706 1.152 .447 1.633 .043 4
Variances
95
Analysis 3
Analysis of relationship between reliability Service quality
dimensions and customer perception in banking sector
H0: Customers do not perceive correlation in between reliability

H1: Customers do perceive correlation in between reliability perception

of service quality dimensions in banking sector
Table 6: Item Statistics-Reliability dimension
Cronbach's Std.
Alpha=.707 Mean Deviation N
promise to
do at said 3.40 1.013 400
time
sincere
interest in
3.31 1.000 400
solving
problem
perform the
service right 3.32 1.004 400
the first time
service at
the time they
3.35 .978 400
promise to
do
insist on
error free 3.27 .959 400
records
96
above). The alpha reliability indicates high internal consistency of all five
predictors, with α=0.707 on Reliability dimension, these scores are
agreed that the Banks provide promise to do at said time (mean=3.40,
SD=1.013), sincere interest in solving problem (mean=3.31, SD=1.000),
perform the service right the first time (mean=3.32, SD=1.004) service at
the time they promise to do (mean=3.35, SD=0.978) and insist on error
free records (mean=3.27, SD=0.959).

promise to do at said time (mean=3.40, SD=1.013), sincere interest in
solving problem (mean=3.31, SD=1.000), perform the service right the
first time (mean=3.32, SD=1.004) service at the time they promise to do
(mean=3.35, SD=0.978) and insist on error free records (mean=3.27,
SD=0.959).
97
Table 7: Inter-Item Correlation Matrix-Reliability
sincer
e
interes perform
t in the service at
solvin service the time
promise g right the they insist on
to do at proble first promise error free
said time m time to do records
promise to
do at said 1.000
time
sincere
interest in
.315 1.000
solving
problem
perform the
service right .199 .216 1.000
the first time
service at
the time they
.306 .428 .341 1.000
promise to
do
insist on
error free .435 .357 .296 .376 1.000
records
98
Reliability dimension in banks (r=0.376), are significantly related to
each other.

relationship.)

relationships between Reliability dimension variables. The inter-item
whether the linear combination of Reliability dimension variables show
99
For all these Reliability dimension measures mentioned independent
variables show statistically significant positive correlation at promise to
do at said time (r2 =0.376, p<.01), sincere interest in solving problem (r2
=0.315, p<.01), perform the service right the first time (r2 =0.216,
p<.01), service at the time they promise to do (r2 =0.306, p<.01) and
insist on error free records (r2 =0.435, p<.01).
Maxim
um /
Minim Maxi Minim Varian N of
Mean um mum Range um ce Items
Item
3.329 3.273 3.398 .125 1.038 .002 5
Means
100
Analysis 4
Analysis of relationship between responsibility Service quality
H0: Customers do not perceive correlation in between responsibility

H1: Customers do perceive correlation in between responsibility

Table 9: Reliability Statistics-Responsibility

Cronbach's Std.
Alpha=0.673 Mean Deviation N
tell customers
exactly when
3.42 1.000 400
services will be
performed
prompt service
3.36 1.009 400
to customers
willing to help
3.20 1.045 400
customers
employees
never be too
3.20 .997 400
busy to respond
to customers
101
four predictors, with α=0.673 on Responsibility dimension, these scores
are accepted according to Nunnally (1967).
agreed that the Banks provide tell customers exactly when services will
be performed (mean=3.42, SD=1.000), prompt service to customers
(mean=3.36, SD=1.009), willing to help customers (mean=3.20,
SD=1.045) employees never show too busy to respond to customers
(mean=3.20, SD=0.997)

tell customers exactly when services will be performed (mean=3.42,
SD=1.000), prompt service to customers (mean=3.36, SD=1.009),
willing to help customers (mean=3.20, SD=1.045) employees never show
too busy to respond to customers (mean=3.20, SD=0.997)
102
Table 10: Inter-Item Correlation Matrix-Responsibility
tell employe
customer es never
s exactly be too
when prompt busy to
services service willing to respond
will be to help to
performe custom customer custome
d ers s rs
tell customers
exactly when
1.000 .310 .384 .390
services will be
performed
prompt service
.310 1.000 .339 .294
to customers
willing to help
.384 .339 1.000 .322
customers
employees
never be too
.390 .294 .322 1.000
busy to respond
to customers

Responsibility dimension in banks (r=0.390), are significantly related to
each other.
103
relationship.)

relationships between Responsibility dimension variables. The inter-item
whether the linear combination of Responsibility dimension variables
show significant positive correlation.
For all these Responsibility dimension measures mentioned independent

variables show statistically significant positive correlation at
responsibility variables like tell customers exactly when services will be
performed (r2 =0.384, p<.01), prompt service to customers (r2 =0.310,
p<.01), willing to help customers (r2 =0.384, p<.01), employees never be
too busy to respond to customers (r2 =0.390, p<.01).
104
Maxim
um /
Item
3.294 3.198 3.418 .220 1.069 .012 4
Means
Item
1.026 .994 1.091 .097 1.098 .002 4
Variances
105
Analysis 5
Analysis of relationship between Assurance Service quality
H0: Customers do not perceive correlation in between Assurance

perception of service quality dimensions in banking sector.
H1: Customers do perceive correlation in between Assurance perception

of service quality dimensions in banking sector.
Table 12: Reliability Statistics-Assurance
Std.
Cronbach's Deviatio
Alpha=.708 Mean n N
employee
behave instill
3.49 .965 400
confidence in
customers
customers feel
safe in 3.58 1.003 400
transactions
employees are
courteous with 3.38 .950 400
customers
employees have
knowledge to
answer 3.45 1.003 400
customers'
questions
106
four predictors, with α=0.708 on Assurance dimension, these scores are
agreed that the Banks provide employee behave instill confidence in
customers (mean=3.49, SD=.965), customers feel safe in transactions
(mean=3.58, SD=1.003), employees are courteous with customers
(mean=3.38, SD=.950) and employees have knowledge to answer
customers' questions (mean=3.45, SD=1.003)

employee behave instill confidence in customers (mean=3.49, SD=.965),
customers feel safe in transactions (mean=3.58, SD=1.003), employees
are courteous with customers (mean=3.38, SD=.950) and employees
have knowledge to answer customers' questions (mean=3.45, SD=1.003)
107
Table 13: Inter-Item Correlation Matrix-Assurance
employe
es have
employee knowled
behave employee ge to
instill customer s are answer
confiden s feel courteous custome
ce in safe in with rs'
customer transacti customer question
s ons s s
employee
behave instill
1.000 .374 .507 .421
confidence in
customers
customers feel
safe in .374 1.000 .297 .360
transactions
employees are
courteous with .507 .297 1.000 .312
customers
employees have
knowledge to
answer .421 .360 .312 1.000
customers'
questions
108
Assurance dimension in banks (r=0.374), are significantly related to
each other.

relationship.)

relationships between Assurance dimension variables. The inter-item
whether the linear combination of Assurance dimension variables show
109
For all these Assurance dimension measures mentioned independent
variables show statistically significant positive correlation at Assurance
variables like employee behave instill confidence in customers (r2
=0.374, p<.01), customers feel safe in transactions (r2 =0.374, p<.01),
employees are courteous with customers (r2 =0.507, p<.01), and
employees have knowledge to answer customers' questions (r2 =0.421,
p<.01).
Maxim
um /
Item
3.474 3.378 3.578 .200 1.059 .007 4
Means
Item
.962 .902 1.007 .104 1.116 .003 4
Variances
110
Analysis 6
Analysis of relationship between Empathy Service quality
H0: Customers do not perceive correlation in between Empathy

perception of service quality dimensions in banking sector.
H1: Customers do perceive correlation in between Empathy perception

of service quality dimensions in banking sector.
Table 15: Reliability Statistics-empathy

Std.
Cronbach's Deviatio
Alpha=.696 Mean n N
customers get
individual 3.23 1.127 400
attention
bank operating
hours
3.51 .918 400
convenient to all
their customers
employees who
give customers
3.38 .988 400
personal
attention
banks will have
their customers
3.35 1.005 400
best interest at
heart
111
employees will
3.41 .932 400
understand
four predictors, with α=0.696 on Empathy dimension, these scores are
agreed that the Banks provide customers get individual attention
(mean=3.23, SD=1.127), bank operating hours convenient to all their
customers (mean=3.51, SD=.918), employees who give customers
personal attention (mean=3.38, SD=.988) banks will have their
customers best interest at heart (mean=3.35, SD=1.005) and employees
will understand specific needs of their customers (mean=3.41, SD=.932).

customers get individual attention (mean=3.23, SD=1.127), bank
operating hours convenient to all their customers (mean=3.51, SD=.918),
employees who give customers personal attention (mean=3.38, SD=.988)
banks will have their customers best interest at heart (mean=3.35,
112
SD=1.005) and employees will understand specific needs of their
customers (mean=3.41, SD=.932).
Table 16: Inter-Item Correlation Matrix-Empathy
bank banks employee

operatin employe will s will
g hours es who have understan
customer conveni give their d specific
s get ent to all custome custome needs of
individua their rs rs best their
l custome personal interest customer
attention rs attention at heart s
customers get
individual 1.000 .337 .363 .252 .240
attention
bank operating
hours
.337 1.000 .430 .367 .403
convenient to all
their customers
employees who
give customers
.363 .430 1.000 .267 .153
personal
attention
banks will have
their customers
.252 .367 .267 1.000 .371
best interest at
heart
employees will
understand
specific needs .240 .403 .153 .371 1.000
of their
customers
113
Empathy dimension in banks (r=0.337), are significantly related to each
other.

relationship.)
relationships between Empathy dimension variables. The inter-item
whether the linear combination of Empathy dimension variables show
For all these Empathy dimension measures mentioned independent

variables show statistically significant positive correlation at Empathy
variables like customers get individual attention (r2 =0.337, p<.01), bank
operating hours convenient to all their customers (r2 =0.430, p<.01),
employees who give customers personal attention (r2 =0.267, p<.01),
banks will have their customers best interest at heart (r2 =0.371, p<.01)
114
and employees will understand specific needs of their customers (r2
=0.371, p<.01).
Analysis 7
Analysis of reliability of Service quality dimensions and customer
perception in banking sector
H0: Each service quality dimensions is not reliable in banking sector.
H1: Each service quality dimensions is reliable in banking sector.
Measuring reliability of data-

Table 17: KMO and Bartlett's Test-tangibility
Kaiser-Meyer-Olkin Measure
.550
of Sampling Adequacy.
Bartlett's Test Approx. Chi-
76.681
of Sphericity Square
Df 6
Sig. .000
Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy and

Bartlett‘s Test of Sphericity is used to measure the reliability of data.
The value of KMO in Tangibility dimension variable is greater than 0.50
then the data variables will be regarded as reliable for research.
Hence the data is considered significant and chosen for interpretation.
115
Table 18: KMO and Bartlett's Test-Reliability
.706
Bartlett's Test Approx. Chi- 170.52
of Sphericity Square 9
Df 10
Sig. .000

The value of KMO in Reliability dimension variable is greater than 0.50
Table 19: KMO and Bartlett's Test-Responsibility
.652
Df 6
Sig. .000

The value of KMO in Responsibility dimension variable is greater than
0.50 then the data variables will be regarded as reliable for research.
116
Table 20: KMO and Bartlett's Test-Assurance
.639
Df 6
Sig. .000

The value of KMO in Assurance dimension variable is greater than 0.50
Table 21: KMO and Bartlett's Test-Empathy
.736
Df 10
Sig. .000

The value of KMO in Empathy dimension variable is greater than 0.50
Analysis 8
117
Analysis of customer’s Perceptions regarding tangibility Dimension
and its impact on service quality.
H0: Tangibility dimension do not make impact on service quality in
banking sector.
H1: Tangibility dimension do make impact on service quality in banking

sector.
Table 22: Tangibility-Communalities
Extrac
Initial tion
modern
looking 1.000 .320
equipment
physical
1.000 .630
facilities
neat
1.000 .524
appearing
material
associated
with the
1.000 .452
service
visually
appealing
Extraction Method: Principal Component Analysis.
The tangibility factor consisted of four variables. The Eigen value is
1.927 explaining 48.174% of the data. Only one factor having Eigen
value greater than 1 explained 48.174 % of the data.
Table 23: Total Variance Explained

118
Extraction Sums of Squared
Initial Eigen values Loadings
Compo % of Cumulati % of Cumulati
nent Total Variance ve % Total Variance ve %
1 1.927 48.174 48.174 1.927 48.174 48.174
2 .892 22.290 70.464
3 .653 16.319 86.783
4 .529 13.217 100.000
Table 24: -Component Matrix(a)
Comp
Factor onent
Loading 1 1
modern
looking .566
equipment
physical
.794
facilities
neat
.724
appearing
material
associated
with the
.673
service
visually
appealing
a 1 components extracted.
119
All four variables have factor loading greater than 0.4 but only those
factors will be extracted those which have loading greater than 0.7. So,
with the help of rotated component matrix is having three iterations.
Component: physical facilities, neat appearing

Physical facilities and Employee dress neat appearing provided by banks
is possible due to service quality
Table 25: Rotated Component Matrix(a)
Raw Rescaled
Component Component
1 2 1 2
modern
looking .143 1.050 .134 .979
equipment
physical
.592 .257 .705 .306
facilities
neat
.589 .193 .684 .224
appearing
material
associated
with the
.748 -.074 .844 -.084
service
visually
appealing
Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 3 iterations.
120
Analysis 9
Analysis of customer’s Perceptions regarding Reliability Dimension
H0: Reliability dimension do not make impact on service quality in
banking sector.
H1: Reliability dimension do make impact on service quality in banking

sector.
Table 26: Reliability-Communalities
Extrac
Initial tion
promise to
do at said 1.000 .440
time
sincere
interest in
1.000 .474
solving
problem
perform the
service right 1.000 .322
the first time
service at
the time they
1.000 .538
promise to
do
insist on
error free 1.000 .547
records
121

Initial Eigenvalues Loadings
1 2.322 46.432 46.432 2.322 46.432 46.432
2 .841 16.814 63.245
3 .746 14.922 78.167
4 .548 10.965 89.133
5 .543 10.867 100.000
The Reliability factor consisted of five variables. The Eigen value is

The reliability factor consisted of five variables are analyzed using

factor analysis. All five variables have factor loading greater than 0.4
thus all are accepted but only those factors will be extracted those which
have loading greater than 0.7. Two variables show high factor loading
value. So, with the help of component matrix is having one component
extracted.
Component: service at the time they promise to do, insist on error free
records.
Service at the time they promise to do and insist on error free records
provided by banks is possible due to service quality.
122
Table 28: Component Matrix(a)
Comp
Factor 2
onent
1
promise to
do at said .663
time
sincere
interest in
.689
solving
problem
perform the
service right .567
the first time
service at
the time they
.733
promise to
do
insist on
error free .740
records
123
Analysis 10
Analysis of customer’s Perceptions regarding Responsiveness
Dimension and its impact on service quality.
H0: Responsiveness dimension do not make impact on service quality in
banking sector.
H1: Responsiveness dimension do make impact on service quality in

banking sector.
Table 29: Responsibility-Communalities
Extrac
Initial tion
tell customers
exactly when
1.000 .554
services will be
performed
prompt service
1.000 .447
to customers
willing to help
1.000 .524
customers
employees
never be too
1.000 .497
busy to respond
to customers
124

Initial Eigen values Loadings
1 2.022 50.538 50.538 2.022 50.538 50.538
2 .730 18.242 68.780
3 .660 16.512 85.292
4 .588 14.708 100.000
The Responsibility factor consisted of four variables. The Eigen value is

The responsibility factor consisted of four variables are analyzed using

factor analysis. All four variables have factor loading greater than 0.4
have loading greater than 0.7. Three variables show high factor loading
extracted.
Component: Employee tells customers exactly when services will be

performed, willing to help customers and employees never be too busy
to respond to customers.
Employee tell customers exactly when services will be performed,
willing to help customers and employees never be too busy to respond to
customers provided by banks is possible due to service quality.
125
Comp
Factor 3
onent
1
tell customers
exactly when
.744
services will be
performed
prompt service
.669
to customers
willing to help
.724
customers
employees
never be too
.705
busy to respond
to customers
126
Analysis 11
Analysis of customer’s Perceptions regarding Assurance Dimension
H0: Assurance dimension do not make impact on service quality in
banking sector.
H1: Assurance dimension do make impact on service quality in banking

sector.
Table 32: Communalities- Assurance
Extrac
Initial tion
employee
behave instill
1.000 .650
confidence in
customers
customers feel
safe in 1.000 .458
transactions
employees are
courteous with 1.000 .530
customers
employees have
knowledge to
answer 1.000 .504
customers'
questions
127

1 2.142 53.546 53.546 2.142 53.546 53.546
2 .749 18.719 72.265
3 .640 15.988 88.252
4 .470 11.748 100.000
The Assurance factor consisted of four variables. The Eigen value is

The Assurance factor consisted of four variables are analyzed using

factor analysis. All four variables have factor loading greater than 0.4
have loading greater than 0.7. Three variables show high factor loading
extracted.
Component: Employee behave instill confidence in customers,

Employees are courteous with customers and employees have
knowledge to answer customer‘s question.
Employee behave instill confidence in customers, Employees are

courteous with customers and employees have knowledge to answer
customer‘s question provided by banks is possible due to service quality.
128
Comp
Factor 4
onent
1
employee
behave instill
.806
confidence in
customers
customers feel
safe in .677
transactions
employees are
courteous with .728
customers
employees have
knowledge to
answer .710
customers'
questions
129
Analysis 12
Analysis of customer’s Perceptions regarding Empathy Dimension
H0: Empathy dimension do not make impact on service quality in
banking sector.
H1: Empathy dimension do make impact on service quality in banking

sector. Table 35: Communalities- Empathy
Extrac
Initial tion
customers get
individual 1.000 .408
attention
bank operating
hours
1.000 .602
convenient to all
their customers
employees who
give customers
1.000 .428
personal
attention
banks will have
their customers
1.000 .445
best interest at
heart
employees will
understand
specific needs 1.000 .402
of their
customers
130

1 2.284 45.687 45.687 2.284 45.687 45.687
2 .922 18.432 64.119
3 .680 13.605 77.725
4 .637 12.735 90.460
5 .477 9.540 100.000
The Empathy factor consisted of five variables. The Eigen value is 2.284
explaining 45.687% of the data. Only one factor having Eigen value
greater than 1 explained 45.687 % of the data.
The Empathy factor consisted of five variables are analyzed using factor
analysis. All five variables have factor loading greater than 0.4 thus all
are accepted but only those factors will be extracted those which have
loading greater than 0.7. One variable shows high factor loading value.
So, with the help of component matrix is having one component
extracted.
Component: Bank operating hours is convenient to all their customers.
Bank operating hours is convenient to all their customers provided by

banks is possible due to service quality.
131
Comp
Factor 5 onent
1
customers get
individual .638
attention
bank operating
hours
.776
convenient to all
their customers
employees who
give customers
.655
personal
attention
banks will have
their customers
.667
best interest at
heart
employees will
understand
specific needs .634
of their
customers
132
Analysis 13
Analysis of the relationship between different parameters of Service
quality dimensions in banks.
H0: Different parameters affecting service quality does not have same
impact on banks.
H1: Different parameters affecting service quality do have same impact
on banks.
Table 38: Descriptive Statistics (Perception)
Std.
Deviat
N Mean ion Skewness Kurtosis
Statisti Statis Statisti Statisti Std. Statisti Std.
c tic c c Error c Error
modern looking
400 4.17 .788 -1.387 .122 3.321 .243
equipment
physical
400 3.73 .841 -1.010 .122 1.205 .243
facilities
neat appearing 400 3.78 1.002 -.930 .122 .550 .243
material
associated with
the service 400 3.88 .797 -1.040 .122 1.792 .243
visually
appealing
promise to do at
400 3.79 .960 -.924 .122 .666 .243
said time
sincere interest
in solving 400 3.70 .989 -.863 .122 .294 .243
problem
133
perform the
service right the 400 3.63 1.008 -.854 .122 .186 .243
first time
service at the
time they 400 3.81 1.007 -.814 .122 .234 .243
promise to do
insist on error
400 3.83 .889 -.883 .122 .570 .243
free records
tell customers
exactly when
400 3.82 1.038 -.941 .122 .224 .243
services will be
performed
prompt service
400 3.62 .966 -.813 .122 .089 .243
to customers
willing to help
400 3.45 1.054 -.533 .122 -.327 .243
customers
employees never
be too busy to
400 3.55 1.017 -.538 .122 -.717 .243
respond to
customers
employee
behave instill
400 3.70 1.014 -.815 .122 -.190 .243
confidence in
customers
customers feel
safe in 400 3.88 .842 -1.081 .122 1.437 .243
transactions
employees are
courteous with 400 3.74 .954 -.749 .122 -.007 .243
customers
employees have
400 3.71 1.077 -.776 .122 -.030 .243
134
answer
customers'
questions
customers get
individual 400 3.70 1.158 -.583 .122 -.831 .243
attention
bank operating
hours convenient
400 3.73 .895 -1.189 .122 1.333 .243
to all their
customers
employees who
give customers
400 3.68 1.013 -.709 .122 -.303 .243
personal
attention
banks will have
their customers
400 3.70 .912 -.844 .122 .506 .243
best interest at
heart
employees will
understand
400 3.54 1.042 -.661 .122 -.505 .243
specific needs of
their customers
Valid N
400
(listwise)
Kurtosis: a measure of the "peakedness" or "flatness" of a distribution. A

kurtosis value near zero indicates a shape close to normal. A negative
value indicates a distribution which is more peaked than normal, and a
positive kurtosis indicates a shape flatter than normal. An extreme
positive kurtosis indicates a distribution where more of the values are
located in the tails of the distribution rather than around the mean. A
135
kurtosis value of +/-1 is considered very good for most psychometric
uses, but +/-2 is also usually acceptable.
So, it can be inferred that the Kurtosis value is in between +1 and -1 for
all variables. It can be said that the data is normally distributed for
further analysis.
Table 39: Descriptive Statistics-Tangibility
Std.
Deviat
Statisti Statisti Statisti Statisti Std. Statisti Std.
c c c c Error c Error
modern
looking 400 4.17 .788 -1.387 .122 3.321 .243
equipment
physical
400 3.73 .841 -1.010 .122 1.205 .243
facilities
neat
400 3.78 1.002 -.930 .122 .550 .243
appearing
material
associated
with the
400 3.88 .797 -1.040 .122 1.792 .243
service
visually
appealing
modern
looking 400 3.58 1.073 -.642 .122 -.307 .243
equipment
physical
400 3.63 .840 -.662 .122 .509 .243
facilities
136
neat
appearing
400 3.57 .861 -.640 .122 .001 .243
material
associated
with the
400 3.58 .886 -.808 .122 .343 .243
service
visually
appealing
Valid N
400
(listwise)
Table 40: Descriptive Statistics-Reliability
Std.
Deviat
promise to
do at said 400 3.79 .960 -.924 .122 .666 .243
time
sincere
interest in
400 3.70 .989 -.863 .122 .294 .243
solving
problem
perform the
service right 400 3.63 1.008 -.854 .122 .186 .243
the first time
service at
the time they
400 3.81 1.007 -.814 .122 .234 .243
promise to
do
137
insist on
error free 400 3.83 .889 -.883 .122 .570 .243
records
promise to
do at said 400 3.40 1.013 -.699 .122 -.144 .243
time
sincere
interest in
400 3.31 1.000 -.414 .122 -.480 .243
solving
problem
perform the
service right 400 3.31 1.004 -.350 .122 -.431 .243
the first time
service at
the time they
400 3.35 .978 -.641 .122 -.393 .243
promise to
do
insist on
error free 400 3.27 .959 -.432 .122 -.464 .243
records
Valid N
400
(listwise)
138
Table 41: Descriptive Statistics-Responsiveness
Std.
Deviat
Etell customers
exactly when
400 3.82 1.038 -.941 .122 .224 .243
services will be
performed
prompt service
400 3.62 .966 -.813 .122 .089 .243
to customers
willing to help
400 3.45 1.054 -.533 .122 -.327 .243
customers
employees
never be too
400 3.55 1.017 -.538 .122 -.717 .243
busy to respond
to customers
tell customers
exactly when
400 3.42 1.000 -.745 .122 -.172 .243
services will be
performed
prompt service
400 3.36 1.009 -.445 .122 -.399 .243
to customers
willing to help
400 3.20 1.045 -.230 .122 -.795 .243
customers
employees
never be too
400 3.20 .997 -.308 .122 -.754 .243
busy to respond
to customers
Valid N
400
(listwise)
139
Table 42: Descriptive Statistics-Assurance
Std.
Deviat
Eemployee
behave instill
400 3.70 1.014 -.815 .122 -.190 .243
confidence in
customers
customers feel
safe in 400 3.88 .842 -1.081 .122 1.437 .243
transactions
employees are
courteous with 400 3.74 .954 -.749 .122 -.007 .243
customers
employees have
knowledge to
answer 400 3.71 1.077 -.776 .122 -.030 .243
customers'
questions
employee
behave instill
400 3.49 .965 -.552 .122 -.145 .243
confidence in
customers
customers feel
safe in 400 3.58 1.003 -.543 .122 -.315 .243
transactions
employees are
courteous with 400 3.38 .950 -.412 .122 -.357 .243
customers
140
employees have
knowledge to
answer
400 3.45 1.003 -.491 .122 -.623 .243
customers'
questions
Valid N
400
(listwise)
Table 43: Descriptive Statistics-Empathy
Std.
Deviat
Ecustomers get
individual 400 3.70 1.158 -.583 .122 -.831 .243
attention
bank operating
hours
400 3.73 .895 -1.189 .122 1.333 .243
convenient to all
their customers
employees who
give customers
400 3.68 1.013 -.709 .122 -.303 .243
personal
attention
banks will have
their customers
400 3.70 .912 -.844 .122 .506 .243
best interest at
heart
141
employees will
understand
specific needs 400 3.54 1.042 -.661 .122 -.505 .243
of their
customers
customers get
individual 400 3.23 1.127 -.230 .122 -1.083 .243
attention
bank operating
hours
400 3.51 .918 -.577 .122 -.016 .243
convenient to all
their customers
employees who
give customers
400 3.38 .988 -.228 .122 -.749 .243
personal
attention
banks will have
their customers
400 3.35 1.005 -.322 .122 -.631 .243
best interest at
heart
employees will
understand
specific needs 400 3.41 .932 -.254 .122 -.753 .243
of their
customers
Valid N
400
(listwise)
142
Maxim
um /
Item
3.374 3.230 3.510 .280 1.087 .010 5
Means
Item
.993 .842 1.270 .428 1.509 .029 5
Variances
143
Analysis 14
Analysis of the relationship between modern looking equipment
(tangibility) of Service quality dimensions in banks.
H0: modern looking equipment affecting service quality does not have
significant impact on banks.
H1: modern looking equipment affecting service quality does have
Table 45: Cross-tabulation: Bank * modern looking equipment
Count
modern looking equipment
strongly strongly
Bank disagree disagree neutral agree agree Total
Sate
10 25 18 35 12 100
bank
Allahab
2 29 12 24 33 100
ad bank
HDFC 5 1 15 67 12 100
ICICI 0 4 27 55 14 100
Total 17 59 72 181 71 400
Hence null hypothesis rejected.
144
Analysis 15
Analysis of the relationship between physical facilities (tangibility) of
Service quality dimensions in banks.
H0: Physical facilities affecting service quality does not have significant
impact on banks.
H1: Physical facilities affecting service quality does have significant
impact on banks.
Table 46: Cross-tabulation: Bank * physical facilities
Count
Bank physical facilities Total
strongly strongly
disagree disagree neutral agree agree
State
1 26 36 32 5 100
bank
Allaha
bad 2 2 7 72 17 100
bank
HDFC 2 2 28 64 4 100
ICICI 1 3 37 42 17 100
Total 6 33 108 210 43 400
145
Analysis 16
Analysis of the relationship between neat appearing (tangibility) of
Service quality dimensions in banks.
H0: Neat appearing affecting service quality does not have significant
impact on banks.
H1: Neat appearing affecting service quality does have significant
impact on banks.
Table 47: Cross-tabulation: Bank * neat appearing
Count
Bank neat appearing Total
strongly strongly
State
1 33 15 46 5 100
bank
Allaha
bad 1 5 14 71 9 100
bank
HDFC 1 2 30 58 9 100
ICICI 1 11 34 41 13 100
Total 4 51 93 216 36 400
146
Analysis 17
Analysis of the relationship between material associated with the service
visually appealing (tangibility) of Service quality dimensions in banks.
H0: material associated with the service visually appealing affecting
service quality does not have significant impact on banks.
H1: material associated with the service visually appealing affecting
service quality does have significant impact on banks.
Table 48: Cross-tabulation: Bank * material associated with the

service visually appealing
Count
material associated with the service visually
Bank appealing Total
strongly strongly
Sate
5 35 17 37 6 100
bank
Allahaba
2 7 8 72 11 100
d bank
HDFC 0 4 34 52 10 100
ICICI 1 2 25 63 9 100
Total 8 48 84 224 36 400
147
Analysis 18
Analysis of the relationship between promises to do at said time
(reliability) of Service quality dimensions in banks.
H0: Promise to do at said time affecting service quality does not have
H1: Promise to do at said time affecting service quality does have
Table 49: Cross-tabulation: Bank * promise to do at said time
Count
Bank promise to do at said time Total
strongly disagre strongly
disagree e neutral agree agree
State
7 17 32 39 5 100
bank
Allahaba
0 22 5 59 14 100
d bank
HDFC 8 7 38 39 8 100
ICICI 7 12 17 58 6 100
Total 22 58 92 195 33 400
148
Analysis 19
Analysis of the relationship between sincere interest in solving problem
H0: Sincere interest in solving problem affecting service quality does
not have significant impact on banks.
H1: Sincere interest in solving problem affecting service quality does
have significant impact on banks.
Table 50: Cross-tabulation: Bank * sincere interest in solving

problem
Count
Bank sincere interest in solving problem Total
strongly strongly
State
4 17 29 44 6 100
bank
Allahaba
2 8 16 62 12 100
d bank
HDFC 4 20 35 35 6 100
ICICI 7 29 31 25 8 100
Total 17 74 111 166 32 400
149
Analysis 20
Analysis of the relationship between performs the service right the first
time (reliability) of Service quality dimensions in banks.
H0: Performs the service right the first time affecting service quality
does not have significant impact on banks.
H1: Performs the service right the first time affecting service quality
does have significant impact on banks.
Table 51: Cross-tabulation: Bank * perform the service right the

first time
Count
Bank perform the service right the first time Total
strongly strongly
State
6 11 46 29 8 100
bank
Allahab
3 23 9 47 18 100
ad bank
HDFC 2 17 23 49 9 100
ICICI 6 18 45 28 3 100
Total 17 69 123 153 38 400
150
Analysis 21
Analysis of the relationship between service at the time they promise to
do (reliability) of Service quality dimensions in banks.
H0: Service at the time they promise to do affecting service quality does
H1: Service at the time they promise to do affecting service quality does
Table 52: Cross-tabulation: Bank * service at the time they promise

to do
Count
Bank service at the time they promise to do Total
strongly strongly
State
5 15 30 39 11 100
bank
Allahaba
3 19 10 58 10 100
d bank
HDFC 4 9 30 57 0 100
ICICI 4 31 16 47 2 100
Total 16 74 86 201 23 400
151
Analysis 22
Analysis of the relationship between insists on error free records
H0: insists on error free records affecting service quality does not have
H1: insists on error free records affecting service quality does have
Table 53: Cross-tabulation: Bank * insist on error free records
Count
Bank insist on error free records Total
strongly strongly
State bank 5 17 38 30 10 100
Allahabad
1 29 6 55 9 100
bank
HDFC 2 14 35 46 3 100
ICICI 7 16 38 38 1 100
Total 15 76 117 169 23 400
152
Analysis 23
Analysis of the relationship between tell customers exactly when
services will be performed (responsibility) of Service quality dimensions
in banks.
H0: tell customers exactly when services will be performed affecting
service quality do not have significant impact on banks.
H1: tell customers exactly when services will be performed affecting
service quality do have significant impact on banks.
Table 54: Cross-tabulation: Bank * tell customers exactly when

Count
tell customers exactly when services will be
Bank performed Total
State
4 34 12 46 4 100
bank
Allahaba
3 4 7 69 17 100
d bank
HDFC 5 8 28 52 7 100
ICICI 7 18 31 42 2 100
Total 19 64 78 209 30 400
153
Analysis 24
Analysis of the relationship between prompt service to customers
(responsibility) of Service quality dimensions in banks.
H0: prompt service to customers affecting service quality does not have
H1: prompt service to customers affecting service quality does have
Table 55: Cross-tabulation: Bank * prompt service to customers
Count
Bank prompt service to customers Total
State
7 18 31 39 5 100
bank
Allahaba
1 6 10 72 11 100
d bank
HDFC 3 21 30 25 21 100
ICICI 6 22 39 31 2 100
Total 17 67 110 167 39 400
154
Analysis 25
Analysis of the relationship between willing to help customers
(responsibility) of Service quality dimensions in banks.
H0: willing to help customers affecting service quality does not have
H1: Willing to help customers affecting service quality does have
Table 56: Cross-tabulation: Bank * willing to help customers
Count
Bank willing to help customers Total
strongly strongly
State
7 25 27 35 6 100
bank
Allahaba
4 22 12 40 22 100
d bank
HDFC 2 21 25 50 2 100
ICICI 6 29 38 25 2 100
Total 19 97 102 150 32 400
155
Analysis 26
Analysis of the relationship between employees never is too busy to
respond to customers (responsibility) of Service quality dimensions in
banks.
H0: employees never are too busy to respond to customers affecting
H1: employees never are too busy to respond to customers affecting
Table 57: Cross-tabulation: Bank * employees never be too busy to

respond to customers
Count
employees never be too busy to respond to
Bank customers Total
strongly strongly
State
5 32 42 16 5 100
bank
Allahaba
1 10 11 67 11 100
d bank
HDFC 4 25 27 39 5 100
ICICI 6 28 24 40 2 100
Total 16 95 104 162 23 400
156
Analysis 27
Analysis of the relationship between employees behave instill
confidence in customers (Assurance) of Service quality dimensions in
banks.
H0: employees behave instill confidence in customers affecting service
quality does not have significant impact on banks.
H1: employees behave instill confidence in customers affecting service
quality does have significant impact on banks.
Table 58: Cross-tabulation: Bank * employee behave instill

Count
employee behave instill confidence in
Bank customers Total
strongly strongly
State
4 27 35 25 9 100
bank
Allahaba
1 7 4 60 28 100
d bank
HDFC 3 12 36 46 3 100
ICICI 4 9 29 53 5 100
Total 12 55 104 184 45 400
157
Analysis 28
Analysis of the relationship between customers feels safe in transactions
(Assurance) of Service quality dimensions in banks.
H0: customers feels safe in transactions affecting service quality does
H1: customers feels safe in transactions affecting service quality does
Table 59: Cross-tabulation: Bank * customers feel safe in

transactions
Count
customers feel safe in transactions Total
strongly strongly
Bank disagree disagree neutral agree agree
State bank 4 12 18 47 19 100
Allahabad
1 19 8 53 19 100
bank
HDFC 1 9 23 50 17 100
ICICI 4 18 38 31 9 100
Total 10 58 87 181 64 400
158
Analysis 29
Analysis of the relationship between employees is courteous with
customers (Assurance) of Service quality dimensions in banks.
H0: employees are courteous with customers affecting service quality
does not have significant impact on banks.
H1: employees are courteous with customers affecting service quality
does have significant impact on banks.
Table 60: Cross-tabulation: Bank * employees are courteous with

customers
Count
employees are courteous with customers Total
strongly strongly
State bank 4 29 40 18 9 100
Allahabad
0 8 14 65 13 100
bank
HDFC 2 13 39 38 8 100
ICICI 5 16 25 50 4 100
Total 11 66 118 171 34 400
159
Analysis 30
Analysis of the relationship between employees has knowledge to
answer customers‘ questions (Assurance) of Service quality dimensions
in banks.
H0: employees have knowledge to answer customers‘ questions
affecting service quality does not have significant impact on banks.
H1: employees have knowledge to answer customers‘ questions
affecting service quality does have significant impact on banks.
Table 61: Cross-tabulation: Bank * employees have knowledge to

answer customers' questions
Count
employees have knowledge to answer
customers' questions Total
strongly strongly
State bank 3 18 21 47 11 100
Allahabad
1 16 6 61 16 100
bank
HDFC 1 22 30 37 10 100
ICICI 4 25 16 49 6 100
Total 9 81 73 194 43 400
160
Analysis 31
Analysis of the relationship between customers gets individual attention
(Empathy) of Service quality dimensions in banks.
H0: customers get individual attention affecting service quality does not
H1: customers get individual attention affecting service quality does
Table 62: Bank * customers get individual attention Crosstabulation
Count
customers get individual attention Total
strongly strongly
State bank 10 32 28 23 7 100
Allahabad
3 50 0 36 11 100
bank
HDFC 2 21 14 53 10 100
ICICI 5 13 16 52 14 100
Total 20 116 58 164 42 400
161
Analysis 32
Analysis of the relationship between bank operating hours convenient to
all their customers (Empathy) of Service quality dimensions in banks.
H0: bank operating hours convenient to all their customers affecting
H1: bank operating hours convenient to all their customers affecting
Table 63: Cross-tabulation: Bank * bank operating hours

convenient to all their customers
Count
bank operating hours convenient to all their
customers Total
strongly strongly
State bank 3 16 29 42 10 100
Allahabad
1 15 6 65 13 100
bank
HDFC 2 4 28 59 7 100
ICICI 3 16 44 27 10 100
Total 9 51 107 193 40 400
162
Analysis 33
Analysis of the relationship between employees gives customers
personal attention (Empathy) of Service quality dimensions in banks.
H0: Employee‘s gives customers personal attention affecting service
quality does not have significant impact on banks.
H1: Employee‘s gives customers personal attention affecting service
quality does have significant impact on banks.
Table 64: Cross-tabulation: Bank * employees who give customers

personal attention
Count
employees who give customers personal
Bank attention Total
strongly strongly
state bank 3 24 37 29 7 100
Allahabad
1 37 11 39 12 100
bank
HDFC 0 9 31 35 25 100
ICICI 3 13 28 56 0 100
Total 7 83 107 159 44 400
163
Analysis 34
Analysis of the relationship between banks will have their customer‘s
best interest at heart (Empathy) of Service quality dimensions in banks.
H0: banks will have their customer‘s best interest at heart affecting
H1: banks will have their customer‘s best interest at heart affecting
Table 65: Cross-tabulation: Bank * banks will have their customers

best interest at heart
Count
banks will have their customers best interest
at heart Total
strongly strongly
State bank 3 34 30 22 11 100
Allahabad
0 11 14 62 13 100
bank
HDFC 4 15 35 31 15 100
ICICI 5 20 26 48 1 100
Total 12 80 105 163 40 400
164
Analysis 35
Analysis of the relationship between employees will understand specific
needs of their customers (Empathy) of Service quality dimensions in
banks.
H0: employees will understand specific needs of their customers
affecting service quality do not have significant impact on banks.
H1: employees will understand specific needs of their customers
affecting service quality do have significant impact on banks.
Table 66: Cross-tabulation: Bank * employees will understand

specific needs of their customers
Count
employees will understand specific needs of
Bank their customers Total
strongly strongly
State bank 2 25 30 31 12 100
Allahabad
0 15 7 65 13 100
bank
HDFC 0 16 42 40 2 100
ICICI 1 23 29 37 10 100
Total 3 79 108 173 37 400
165
Analysis 36
Analysis of relationship between demographic and customer‘s service
quality perception provided by the bank.
H0: Customer‘s demographic is not positively related to service quality
provided by the bank.
H1: Customer‘s demographic is positively related to service quality
provided by the bank.
Table 67: Demographic-Age
Frequenc Valid Cumulative

y Percent Percent Percent
Val 21-30
251 62.8 62.8 62.8
id
31-40 120 30.0 30.0 92.8
41-50 29 7.3 7.3 100.0
Total 400 100.0 100.0
Chart 2: Age Distribution
166
Table 68: Demographic-Education
Valid Cumulative
Frequency Percent Percent Percent
Val graduation
78 19.5 19.5 19.5
id
Post-
278 69.5 69.5 89.0
graduation
professional 44 11.0 11.0 100.0
Total 400 100.0 100.0
Chart 3: Education Qualification Distribution
167
Table 69: Demographic-Occupation
Valid Cumulative
Val Govt-service
154 38.5 38.5 38.5
id
public sector 92 23.0 23.0 61.5
Self-
53 13.3 13.3 74.8
employed
unemployed 10 2.5 2.5 77.3
students 90 22.5 22.5 99.8
Others 1 .3 .3 100.0
Total 400 100.0 100.0
Chart 4: Occupation wise Distribution
168
Table 70: Demographic-Income
Valid Cumulative
Val 20 k
68 17.0 17.0 17.0
id
20-40k 24 6.0 6.0 23.0
40-60k 9 2.3 2.3 25.3
60-80 31 7.8 7.8 33.0
80 and
268 67.0 67.0 100.0
above
Total 400 100.0 100.0
Chart 5: Income wise Distribution
169
Table 71: Demographic-Gender
Valid Cumulative
Val male
295 73.8 73.8 73.8
id
female 105 26.3 26.3 100.0
Total 400 100.0 100.0
Chart 6: Gender wise Distribution
170
Table 72: Demographic-Bank
Valid Cumulative
Val State bank
100 25.0 25.0 25.0
id
Allahabad
100 25.0 25.0 50.0
bank
HDFC 100 25.0 25.0 75.0
ICCI 100 25.0 25.0 100.0
Total 400 100.0 100.0
Chart 7: Bank wise Distribution
171
Table 73: ANOVA
Sum of Mean
Squares df Square F Sig.
modern looking Between
28.610 3 9.537 8.759 .000
equipment Groups
Within
431.140 396 1.089
Groups
Total 459.750 399
physical Between
38.427 3 12.809 20.868 .000
facilities Groups
Within
243.070 396 .614
Groups
Total 281.498 399
neat appearing Between
21.548 3 7.183 10.367 .000
Groups
Within
274.350 396 .693
Groups
Total 295.898 399
material Between
associated with Groups
the service 40.020 3 13.340 19.321 .000
visually
appealing
Within
273.420 396 .690
Groups
Total 313.440 399
promise to do at Between
11.887 3 3.962 3.943 .009
said time Groups
Within
397.910 396 1.005
Groups
Total 409.797 399
sincere interest Between
30.810 3 10.270 11.052 .000
in solving Groups
172
Within
367.980 396 .929
Groups
Total 398.790 399
perform the Between
service right the Groups 15.630 3 5.210 5.336 .001
first time
Within
386.680 396 .976
Groups
Total 402.310 399
service at the Between
time they Groups 8.787 3 2.929 3.114 .026
promise to do
Within
372.510 396 .941
Groups
Total 381.297 399
insist on error Between
5.787 3 1.929 2.113 .098
free records Groups
Within
361.510 396 .913
Groups
Total 367.298 399
tell customers Between
exactly when Groups
43.208 3 14.403 16.018 .000
services will be
performed
Within
356.070 396 .899
Groups
Total 399.278 399
prompt service Between
41.020 3 13.673 14.829 .000
to customers Groups
Within
365.140 396 .922
Groups
Total 406.160 399
173
willing to help Between
24.048 3 8.016 7.717 .000
customers Groups
Within
411.350 396 1.039
Groups
Total 435.398 399
employees never Between
be too busy to Groups
48.168 3 16.056 18.248 .000
respond to
customers
Within
348.430 396 .880
Groups
Total 396.598 399
employee Between
behave instill Groups
52.788 3 17.596 21.833 .000
confidence in
customers
Within
319.150 396 .806
Groups
Total 371.938 399
customers feel Between
safe in Groups 16.428 3 5.476 5.630 .001
transactions
Within
385.170 396 .973
Groups
Total 401.598 399
employees are Between
courteous with Groups 35.827 3 11.942 14.589 .000
customers
Within
324.170 396 .819
Groups
Total 359.997 399
employees have Between
13.328 3 4.443 4.537 .004
knowledge to Groups
174
answer
customers'
questions
Within
387.770 396 .979
Groups
Total 401.097 399
customers get Between
individual Groups 36.660 3 12.220 10.292 .000
attention
Within
470.180 396 1.187
Groups
Total 506.840 399
bank operating Between
hours convenient Groups
15.220 3 5.073 6.264 .000
to all their
customers
Within
320.740 396 .810
Groups
Total 335.960 399
employees who Between
give customers Groups
22.650 3 7.550 8.144 .000
personal
attention
Within
367.100 396 .927
Groups
Total 389.750 399
banks will have Between
their customers Groups
29.588 3 9.862 10.468 .000
best interest at
heart
Within
373.110 396 .942
Groups
Total 402.698 399
175
employees will Between
understand Groups
specific needs of 16.990 3 5.663 6.808 .000
their customers
Within
329.400 396 .832
Groups
Total 346.390 399
The ANOVA results reveal that F-statistics and p-value=0.000 is

significant at the 1 percent level (p<0.01). This indicates that overall all
variables are statistically significant relationship between service quality
and Tangibility, Reliability, Responsiveness, Assurance and empathy.
Table 74: Test of Homogeneity of Variances
Levene
Statistic df1 df2 Sig.
modern looking
30.806 3 396 .000
equipment
physical
12.224 3 396 .000
facilities
neat appearing 18.783 3 396 .000
material
associated with
the service 17.798 3 396 .000
visually
appealing
promise to do at
.129 3 396 .943
said time
sincere interest
in solving 2.891 3 396 .035
problem
perform the
4.923 3 396 .002
service right the
176
first time
service at the
time they 3.600 3 396 .014
promise to do
insist on error
3.643 3 396 .013
free records
tell customers
exactly when
14.011 3 396 .000
services will be
performed
prompt service
14.557 3 396 .000
to customers
willing to help
4.970 3 396 .002
customers
employees never
be too busy to
5.171 3 396 .002
respond to
customers
employee
behave instill
4.626 3 396 .003
confidence in
customers
customers feel
safe in 1.068 3 396 .362
transactions
employees are
courteous with 5.017 3 396 .002
customers
employees have
knowledge to
answer 2.709 3 396 .045
customers'
questions
177
customers get
individual 6.739 3 396 .000
attention
bank operating
hours convenient
3.280 3 396 .021
to all their
customers
employees who
give customers
7.783 3 396 .000
personal
attention
banks will have
their customers
4.793 3 396 .003
best interest at
heart
employees will
understand
6.361 3 396 .000
specific needs of
their customers
178
3.8
3.6
Mean of modern looking equipment
3.4
3.2
sate bank allahabad bank hdfc icici
Bank
Chart 8: Mean of modern looking equipment-Banks
179
4
3.8
Mean of physical facilities
3.6
3.4
3.2
Bank
Chart 9: Mean of Physical facilities-Banks
180
3.8
Mean of neat appearing
3.6
3.4
3.2
Bank
Chart 10: Mean of neat appearing-Banks
181
4
Mean of material associated with the service visually
3.8
3.6
appealing
3.4
3.2
Bank
Chart 11: Mean of material associated with service visually-Banks
182
3.7
3.6
Mean of promise to do at said time
3.5
3.4
3.3
3.2
3.1
Bank
Chart 12: Mean of promise to do at said time-Banks
183
3.8
3.6
Mean of sincere interest in solving problem
3.4
3.2
2.8
Bank
Chart 13: Mean of sincere interest in solving problem-Banks
184
3.6
3.5
Mean of perform the service right the first time
3.4
3.3
3.2
3.1
Bank
Chart 14: Mean of perform the service right -Banks
185
3.6
3.5
Mean of service at the time they promise to do
3.4
3.3
3.2
3.1
Bank
Chart 15: Mean of service at right time they promise -Banks
186
3.5
3.4
Mean of insist on error free records
3.3
3.2
3.1
Bank
Chart 16: Mean of insist on error -Banks
187
4
Mean of tell customers exactly when services will be
3.8
3.6
performed
3.4
3.2
Bank
Chart 17: Mean of tell customers exactly -Banks
188
4
3.8
Mean of prompt service to customers
3.6
3.4
3.2
Bank
Chart 18: Mean of prompt service to customers -Banks
189
3.6
3.4
Mean of willing to help customers
3.2
2.8
Bank
Chart 19: Mean of willing to help customers -Banks
190
3.8
3.6
Mean of employees never be too busy to respond to
3.4
customers
3.2
2.8
Bank
Chart 20: Mean of employees never show to busy -Banks
191
4.2
4
Mean of employee behave instill confidence in customers
3.8
3.6
3.4
3.2
Bank
Chart 21: Mean of employees behave instill confidence -Banks
192
3.8
3.7
Mean of customers feel safe in transactions
3.6
3.5
3.4
3.3
3.2
Bank
Chart 22: Mean of customers feel safe in transaction -Banks
193
4
3.8
Mean of employees are courteous with customers
3.6
3.4
3.2
2.8
Bank
Chart 23: Mean of employees are courteous with customers -Banks
194
3.8
Mean of employees have knowledge to answer customers'
3.7
3.6
questions
3.5
3.4
3.3
3.2
Bank
Chart 24: Mean of employees have knowledge to answer -Banks
195
3.6
3.4
Mean of customers get individual attention
3.2
2.8
Bank
Chart 25: Mean of customers get individual attention -Banks
196
3.8
3.7
Mean of bank operating hours convenient to all their
3.6
customers
3.5
3.4
3.3
3.2
Bank
Chart 26: Mean of bank operating hours -Banks
197
3.8
Mean of employees who give customers personal attention
3.6
3.4
3.2
Bank
Chart 27: Mean of employees give personal attention -Banks
198
3.8
Mean of banks will have their customers best interest at
3.6
heart
3.4
3.2
Bank
Chart 28: Mean of bank will have interest -Banks
199
3.8
Mean of employees will understand specific needs of their
3.7
3.6
customers
3.5
3.4
3.3
3.2
Bank
Chart 29: Mean of employees will understand specific needs -Banks
200
Chapter 6
Findings
And
Discussion
FINDINGS AND DISCUSSIONS
The analysis reveals that customers are aware of service quality dimensions i.e;
Tangibility, Reliability, Responsiveness, Assurance and Empathy. Service quality
plays vital role attracting customers whether the public and private sector banks.
As the data reveals that customers perceive greatest service gap while the modern
looking equipment (tangibility) and insist on free records (Reliability) are
concerned analyzing overall Banks. Hence needs improvement.
The analysis1 reveals that overall banking customers perceive lowest service gap
while the physical facilities (tangibility) and employees of bank will understand
specific needs of their customers (Empathy) are concerned analyzing overall
Banks. Hence other dimensions need improvement.
The analysis1 shows that Empathy dimension, Responsibility dimension and

Assurance dimension shows best service quality (lowest service gap) provided by
all Banks whether private sector or public sector. Empathy dimension shows rank
1, Responsibility dimension shows rank 2 and Assurance dimension shows rank 3
providing lowest service gap.
The analysis1 shows that Reliability dimension, Tangibility dimension shows

average service quality (highest service gap) provided by all Banks whether private
sector or public sector. Reliability dimension shows rank 1, Tangibility dimension
shows rank 2 providing highest service gap. Hence needs improvement.
201
The analysis2 reveals that overall banks provide modern looking equipment,
Physical facilities, neat appearing and material associated with the service visually
appealing and respondents agree that they are influenced by modern looking
equipment, Physical facilities, neat appearing and material associated with the
service visually appealing constructing Tangibility dimension.
The analysis2 also reveals that each variable constructing Tangibility dimension in
banks are significantly positive correlated and shows moderate relationship.
The analysis3 reveals that overall banks provide promise to do at said time, sincere
interest in solving problem, perform the service right the first time, service at the
time they promise to do and insist on error free records and respondents agree that
they are influenced by promise to do at said time, sincere interest in solving
problem, perform the service right the first time, service at the time they promise to
do and insist on error free records constructing Reliability dimension.
The analysis3 also reveals that each variable constructing Reliability dimension in
The analysis4 reveals that overall banks provide tell customers exactly when
services will be performed, prompt service to customers, willing to help customers,
employees never show too busy to respond to customers and respondents agree
that they are influenced by tell customers exactly when services will be performed,
prompt service to customers, willing to help customers, employees never show too
busy to respond to customers constructing Responsibility dimension.
The analysis4 also reveals that each variable constructing Responsibility dimension
in banks are significantly positive correlated and shows moderate relationship.
202
The analysis5 reveals that overall banks provide employee behave instill
confidence in customers, customers feel safe in transactions, employees are
courteous with customers, employees have knowledge to answer customers'
questions and respondents agree that they are influenced by employee behave
instill confidence in customers, customers feel safe in transactions, employees are
courteous with customers, employees have knowledge to answer customers'
questions constructing Assurance dimension.
The analysis5 also reveals that each variable constructing Assurance dimension in
The analysis6 reveals that overall banks provide customers get individual attention,
bank operating hours convenient to all their customers, employees who give
customers personal attention, banks will have their customers best interest at heart
and employees will understand specific needs of their customers and respondents
agree that they are influenced by customers get individual attention, bank operating
hours convenient to all their customers, employees who give customers personal
attention, banks will have their customers best interest at heart and employees will
understand specific needs of their customers constructing Empathy dimension.
The analysis6 also reveals that each variable constructing Empathy dimension in
The analysis7 reveals that overall banks providing Tangibility, Reliability,

Responsiveness, Assurance and Empathy representing service quality data is
reliable and fit for further study.
203
The analysis8 reveals that overall banks providing Tangibility have factor loading
greater found through Principal component matrix-Physical facilities and employee
dress neat appearing variables are extracted and enhance service quality.
The analysis9 reveals that overall banks providing Reliability have factor loading
greater found through Principal component matrix- service at the time they
promise to do and insist on error free records variables are extracted and enhance
service quality.
The analysis10 reveals that overall banks providing Responsibility have factor
loading greater found through Principal component matrix- Employee tells
customers exactly when services will be performed, willing to help customers and
employees never be too busy to respond to customers variables are extracted and
enhance service quality.
The analysis11 reveals that overall banks providing Assurance have factor loading
greater found through Principal component matrix- Employee behave instill
confidence in customers, Employees are courteous with customers and employees
have knowledge to answer customer‘s question variables are extracted and enhance
service quality.
The analysis12 reveals that overall banks providing Empathy have factor loading
greater found through Principal component matrix- Bank operating hours is
convenient to all their customers variables are extracted and enhance service
quality.
Analysis 14 reveals that modern looking equipment (Tangibility) do have

significant impact on public as well as private sector banks.
204
Analysis 15 reveals that Physical facilities (Tangibility) do have significant impact
on public as well as private sector banks.
Analysis 16 reveals that neat appearing (Tangibility) do have significant impact on

public as well as private sector banks.
Analysis 17 reveals that material associated with the service visually appealing
(Tangibility) do have significant impact on public as well as private sector banks.
Analysis 18 reveals that promise to do at said time (Reliability) do have significant

impact on public as well as private sector banks.
Analysis 19 reveals that sincere interest in solving problem (Reliability) do have

Analysis 20 reveals that employee perform the service right the first time
(Reliability) do have significant impact on public as well as private sector banks.
Analysis 21 reveals that service at the time they promise to do (Reliability) do have
Analysis 22 reveals that insists on error free records (Reliability) do have

Analysis 23 reveals that tell customers exactly when services will be performed
(Responsibility) do have significant impact on public as well as private sector
banks.
Analysis 24 reveals that prompt service to customers (Responsibility) do have

Analysis 25 reveals that employees willing to help customers (Responsibility) do

have significant impact on public as well as private sector banks.
Analysis 26 reveals that employees never are too busy to respond customers
(Responsibility) do have significant impact on public as well as private sector
banks.
205
Analysis 27 reveals that employees behave instill confidence in customers
(Assurance) do have significant impact on public as well as private sector banks.
Analysis 28 reveals that customers feel safe in transactions (Assurance) do have

Analysis 29 reveals that employees are courteous within customers (Assurance) do

have significant impact on public as well as private sector banks.
Analysis 30 reveals that employees have knowledge to answer customer‘ question

(Assurance) do have significant impact on public as well as private sector banks.
Analysis 31 reveals that customers get individual attention (Empathy) do have

Analysis 32 reveals that bank operating hours convenient to all their customers
(Empathy) do have significant impact on public as well as private sector banks.
Analysis 33 reveals that employees give customers personal attention (Empathy)

do have significant impact on public as well as private sector banks.
Analysis 34 reveals that banks will have their customer‘s best interest at heart
(Empathy) do have significant impact on public as well as private sector banks.
Analysis 35 reveals that employees will understand specific needs of their

customers (Empathy) do have significant impact on public as well as private sector
banks.
Analysis 36 reveals that majority of respondents age belong to 21yrs-30yrs i.e;

63%, 31yrs-40yrs i.e.; 30% and 41yrs-50yrs i.e.; 7%.
Analysis36 reveals that majority of respondents educational qualification belongs

to post graduation i.e.; 70%, graduation i.e.; 19% and 11% are professional.
Analysis 36 reveals that majority of respondents occupation belongs to

Government service i.e.; 38%, Public sector i.e.; 23%, Students i.e.; 23%, self-
employed i.e.; 13% and unemployed i.e.; 3%.
206
Analysis 36 reveals that majority of respondents income belongs to 80 k-above i.e.;
67%, 20 k i.e.; 17%, 60-80 k i.e.; 8%, 20-40 k i.e.; 6% and 40-60 k i.e.; 2%
Analysis 36 reveals that majority of respondents belongs to gender group male i.e.;
74% and female i.e.; 26%.
Analysis 36 reveals that equally public sector and private sector banks are selected.
ANOVA test reveals that all independent variables Tangibility, Reliability,

Responsiveness, Assurance and Empathy are statistically positive significant
relation with dependent variable service quality.
207
Chapter 7
Conclusion
CONCLUSION
The study on the topic service quality management in banking sector a special
reference to Uttar Pradesh is supported by secondary data available for reference
and guideline to explore qualitative data through responses of private as well as
public sector banking employees towards service quality of their banks. With the
use of SERVQUAL Model, the satisfaction level of customer was evaluated on the
basis of service expectation and service perception in banks through primary data
collection equally from each banking sector. The analysis and therefrom the
conclusion arising from the same is briefed in the following points:
1. Service quality is very much positively correlated with the dimensions of

Tangibility, Reliability, Responsiveness, Assurance and Empathy. Analysis of
respondent‘s service expectation and service perception is based on these
dimensions predicting service quality.
2. Service quality variable, ‗modern looking equipment‘ predicting dimension

Tangibility, ‗insists on free records‘ Predicting dimension, ‗Reliability‘ show
high service quality gap in all banks. Service quality variable, ‗Physical
facilities‘ predicting dimension Tangibility and ‗employee of bank will
understand specific needs of their customers‘ Predicting dimension Empathy
show low service quality gap in all banks.
3. Overall banks show best service quality on dimensions Empathy, Responsibility

and Assurance. These dimensions show lowest service quality gap. Overall
banks show that Tangibility dimension is correlated with variables modern
looking equipment, Physical facilities, neat appearing and material associated
with the service visually appealing and Tangibility dimension is being
influenced by these variables.
4. Overall banks show that Reliability dimension is correlated with variables

‗promise to do at said time‘, ‗sincere interest in solving problem‘, ‗perform the
service right the first time‘, ‗service at the time they promise to do‘ and ‗insist
on error free records‘ and ‗Reliability‘ dimension is being influenced by these
variables.
208
5. Overall banks show that ‗Responsibility‘ dimension is correlated with variables,
‗tell customers exactly when services will be performed‘, ‗prompt service to
customers‘, ‗willing to help customers‘, ‗employees never show too busy to
respond to customers‘ and ‗Responsibility‘ dimension is being influenced by
these variables.
6. Overall banks show that ‗Assurance‘ dimension is correlated with variables

‗employee behave instill confidence in customers‘, ‗customers feel safe in
transactions‘, ‗employees are courteous with customers‘, ‗employees have
knowledge to answer customers' questions‘ and ‗Assurance‘ dimension is being
influenced by these variables.
7. Overall banks show that ‗Empathy‘ dimension is correlated with variables

‗customers get individual attention‘, ‗bank operating hours convenient to all
their customers‘, ‗employees who give customers personal attention‘, ‗banks
will have their customers best interest at heart‘ and ‗employees will understand
specific needs of their customers‘ and ‗Empathy‘ dimension is being influenced
by these variables.
8. ‗Tangibility‘ dimension, predictor ‗Physical facilities‘ and ‗employee dress neat

appearing‘ variables are showing lowest service gap. Hence these two variables
enhance service quality in banking.
9. ‗Reliability‘ dimension, predictor ‗service at the time they promise to do‘ and
‗insist on error free records‘ variables are showing lowest service gap. Hence
these two variables enhance service quality in banking.
10.‗Responsibility‘ dimension, predictor ‗Employee tells customers exactly when

services will be performed‘, ‗willing to help customers‘ and ‗employees never
be too busy to respond to customers‘ variables are showing lowest service gap.
11.‗Assurance‘ dimension predictor ‗Employee behave instill confidence in

customers‘, ‗Employees are courteous with customers‘ and ‗employees have
knowledge to answer customer‘s questions‘ variables are showing lowest
service gap. Hence these two variables enhance service quality in banking.
209
12. ‗Empathy‘ dimension predictor ‗Bank operating hours are convenient to all
their customers‘ variables are showing lowest service gap. Hence these two
variables enhance service quality in banking.
210
Chapter 8
Recommendation
And
Suggestion
RECOMMENDATIONS AND SUGGESTION
After the analysis of primary data and arriving at the specific conclusions as above,
the following points of recommendations and suggestions can be offered to the
banks operating in state of Utter Pradesh both in private and public sector:
1. Service quality variable, ‗modern looking equipment‘ predicting dimension

Tangibility, ‗insists on free records‘ Predicting dimension, ‗Reliability‘ show
high service quality gap needs improvement in all banks whether public sector
or private sector.
2. Overall banks show that Tangibility dimension is correlated with variables

modern looking equipment, Physical facilities, neat appearing and material
associated with the service visually appealing and Tangibility dimension is
being influenced by these variables. So, the banks should give special
consideration to each of these variables.
3. Overall banks show that Reliability dimension is correlated with variables

promise to do at said time, sincere interest in solving problem, perform the
service right the first time, service at the time they promise to do and insist on
error free records and Reliability dimension is being influenced by these
variables. So, the banks should give special consideration in order to improve
each of these variables.
4. Overall banks show that ‗Responsibility‘ dimension is correlated with variables,

‗tell customers exactly when services will be performed‘, ‗prompt service to
customers‘, ‗willing to help customers‘, ‗employees never show too busy to
respond to customers‘ and ‗Responsibility‘ dimension is being influenced by
these variables. So, the banks should give special consideration to each of these
variables.
5. Overall banks show that Assurance dimension is correlated with variables

employee behave instill confidence in customers, customers feel safe in
transactions, employees are courteous with customers, employees have
knowledge to answer customers' questions and Assurance dimension is being
influenced by these variables. So, the banks should give special consideration to
each of these variables.
211
6. Overall banks show that Empathy dimension is correlated with variables
customers get individual attention, bank operating hours convenient to all their
customers, employees who give customers personal attention, banks will have
their customers best interest at heart and employees will understand specific
needs of their customers and Empathy dimension is being influenced by these
variables. So, the banks should give special attention to improve each of these
variables.
212
Chapter 9
Limitation of
study
Limitation of the study
1. Technology is such a factor that may influence service quality management

immensely in banking sector operating in India. If the same study is
undertaken again with technology as an additional dimension the results might
be different.
2. The paucity of time has been a limiting factor in the collection of primary data
and interpreting the same.
3. Paucity of money has been a limiting factor. This factor influence the quality
of research if done institutionally rather than individually.
4. This study can be applied to other sector like insurance, telecommunication.
5. Population for study can be extended to give variation in the result and
finding.
6. More qualitative and additional research methods could be applied.
7. Some more tests can be applied.
213
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Shekhar K.C.& Shekhar L.,(2004) ―Banking Theory & Practices‖ Vikas

Publishing.
246
Venugopal, V, Raghu V. N, (2006) ― Services Marketing‖ Himalaya Publishing
Verma H, (2008) ―Services Marketing‖ Pearson Education
Zeithmal V, Bitner J M, Gremier D and Pandit A, (2008) ―Service marketing:

Integrating Customer Focus across the Firm‖ IV Ed. Tata McGraw-Hill, New
Delhi.
247
ANNEXURE A
A SAMPLE COPY
OF
QUESTIONNAIRE
Annexure1 Questionnaire
Expectations
This survey deals with your opinions of the banks. Please show the
extent to which you think banks should possess the following features.
What we are interested in here is a number that best shows your
expectations about institutions offering bank services.
Statements Stron Disag Neut Agr Stron

Tangibles gly ree ral ee gly
Disag Agre
ree e
E Excellent banking companies 1 2 3 4 5
1 will have modern looking
equipment
E The physical facilities at 1 2 3 4 5
2 excellent banks will be visually
appealing
E Employee at excellent banks 1 2 3 4 5
3 will be neat appearing
E Material associated with the 1 2 3 4 5
4 service (such as pamphlets and
statement) are visually
appealing
Reliability
E When excellent banks promise 1 2 3 4 5
5 to do something by a certain
time, they do
E When a customer has a 1 2 3 4 5
6 problem, excellent banks will
show a sincere interest in
solving it
E Excellent banks will perform 1 2 3 4 5
248
7 the service right the first time
E Excellent banks will provide the 1 2 3 4 5
8 service at the time they promise
to do so
E Excellent banks will insist on 1 2 3 4 5
9 error free records
Responsiveness
E Employees of excellent banks 1 2 3 4 5
10 will tell customers exactly when
11 will give prompt service to
customers
12 will always be willing to help
customers
13 will never be too busy to
respond to customers‘ request
Assurance
E The behavior of employees in 1 2 3 4 5
14 excellent banks will instill
E Customers of excellent banks 1 2 3 4 5
15 will feel safe in transactions
16 will be consistently courteous
with customers
E Employee of excellent banks 1 2 3 4 5
17 will have the knowledge to
answer customers‘ questions
Empathy
E Excellent banks will give 1 2 3 4 5
249
18 customers individual attention
E Excellent banks will have 1 2 3 4 5
19 operating hours convenient to
all their customers
E Excellent banks will have 1 2 3 4 5
20 employees who give customers
personal attention
E Excellent banks will have their 1 2 3 4 5
21 customer‘s best interest at heart
E The employees of excellent 1 2 3 4 5
22 banks will understand specific
needs of their customers
250
Perceptions
The following statements relate to your feeling about Public Sector
sector banks (S.B.I, Syndicate Bank, PNB, Allahabad Bank, IOB, Bank
of Baroda etc.) you chose. Please show the extent to which you believe
Public Sector sector banks have the feature described in the statement.
Here, we are interested in a number that shows your perceptions about
Public Sector banks.
Statements Stron Disag Neut Agr Stron

Tangibles gly ree ral ee gly
Disag Agre
ree e
P Public Sector bank has modern 1 2 3 4 5
1 looking equipment
P Public Sector bank‘s physical 1 2 3 4 5
2 facilities are visually appealing
P Public Sector bank‘s reception 1 2 3 4 5
3 desk employees are neat
appearing
P Material associated with the 1 2 3 4 5
4 service (such as pamphlets and
statement) are visually
appealing
Reliability
P When Public Sector bank 1 2 3 4 5
5 promises to do something by a
certain time, it does so
P When a you have a problem, 1 2 3 4 5
6 Public Sector bank shows a
sincere interest in solving it
P Public Sector bank performs the 1 2 3 4 5
7 service right the first time
251
P Public Sector bank provides its 1 2 3 4 5
8 service at the time it promises to
do so
P Public Sector bank insists on 1 2 3 4 5
9 error free records
Responsiveness
P Employees in Public Sector 1 2 3 4 5
10 bank tell you exactly when
P Employees of Public Sector 1 2 3 4 5
11 bank gives prompt service
12 bank are always willing to help
you
13 bank are never too busy to
respond to your request
Assurance
P The behavior of employees in 1 2 3 4 5
14 Public Sector bank instill
confidence in you
P You feel safe in your 1 2 3 4 5
15 transactions with Public Sector
bank
16 bank are a consistently
courteous with you
17 bank have the knowledge to
answer your questions
Empathy
P Public Sector bank gives you 1 2 3 4 5
18 individual attention
252
P Public Sector bank has 1 2 3 4 5
19 operating hours convenient to
all its customers
P Public Sector bank employees 1 2 3 4 5
20 who give you personal attention
P Public Sector bank has your 1 2 3 4 5
21 best interest at heart
P The employees of Public Sector 1 2 3 4 5
22 bank understand your specific
needs
Q.3 Listed below are five features pertaining to Public Sector banks and
the service they offer. We would like to know how important each of
these features is to you when you evaluate the service offered by a
Public Sector bank. Please allocate a total of 100 points among the five
features according to how important each feature is to you - the more
important a feature is to you, the more points you should allocate to it.
Please ensure that the points you allocate to the five features add up to
100.
1. The appearance of the Public Sector bank physical facilities,

equipment, personnel and communication materials.
_____ Points
2. The Public Sector bank‘s ability to perform the promised service
dependably and accurately. ____ Points
3. The Public Sector bank‘s willingness to help clients and provide
a prompt service. ____ Points
253
4. The knowledge and courtesy of the Public Sector bank personnel
and their ability to convey trust and confidence.
____ Points
5. The caring, individualised attention the Public Sector bank
provides its clients. ____ Points
TOTAL points allocated 100 Points
Q.4 Which one feature of the above five is most important to you?
………………………..
(Please enter the feature's number)
Q.5 Which feature is second most important to you?

………………………..
Q.6 Which feature is least important to you?

………………………..
254
Q.7 Please indicates categories of your age (Years).
21- 30 1
31- 40 2
41- 50 3
51- 60 4
61 and above 5
Q.8 Please specify your gender
Male 1
Female 2
Q. 9 Into which of the following banks do you have your account?
State of Bank 1
Bank of India 2
Allahabad Bank 3
Syndicate Bank 4
Others (Please specify) …………… 5
Q.10 which of the following educational category you belong to ?
Intermediate 1
Graduation 2
Post graduation 3
Professionals 4
255
Q.11 which of the following occupational category you belong to?
Govt. job 1
Public Sector Job 2
Self-employed 3
Unemployed 4
Students 5
Q.12 which monthly income category you belong to?
Below Rs.20, 000 1

Rs.20, 001- 40,000 2
Rs.40, 001-60,000 3
Rs.60, 001-80,000 4
Above Rs.80, 000 5
Contact No.
Signature :
Date:-
256

Service Quality in Banking Sector-India

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Service Quality in Banking Sector-India

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THESIS

Under the Supervision of

DEPARTMENT OF BUSINESS ADMINISTRATION

Date: Rakhi Sonkar

Date: Dr. Mohammad Anees

I am extremely grateful to my supervisor Dr. Mohammad. Anees, Assistant

I am especially thankful to my parents, my husband and in-laws who have helped

I am grateful to Prof. A. K. Chatterjee, Head of the Department of Business

I would also like to acknowledge Prof. J. K. Sharma, former Head of the

Service Quality Measurement in Banking Industry With Reference To Uttar

The thesis is organized into six chapters and Annexure as follows:

Chapter 1- Introduction: Services are the major contributing factor to Indian

Chapter 7- Conclusions: This chapter draws conclusions from the analysis.

Chapter 8: Recommendation and suggestions:This chapter concludes with

Annexure A-A sample copy of Questionnaire

2. LITERATURE REVIEW 30-55

3. SERVICE QUALITY MANAGEMENT IN BANKS 56-78

4. RESEARCH DESIGN & METHODS 79-82

5. DATA ANALYSIS 83-200

6. FINDINGS AND DISCUSSION 201-207

8. RECOMMENDATION AND SUGGESTION 211-212

9. LIMITATION OF STUDY 213

ANNEXURE A-A SAMPLE COPY OF QUESTIONNAIRE 248-256

S.No. Figure Name Page No.

1 Continual quality improvement 10

2 A Strategic view of service Operations Management 11

4 The Juran’s Trilogy 16

5 Histogram of 3 sigma process 17

6 Histogram of 6 sigma process 17

7 Eight Dimension of Quality-D. Garvin, 1986 20

10 The Cost of Poor Quality 24

11 Breadth of service offering 29

S. No. Chart Name Page No.

1. Relative Gap scores 87

2. Age Distribution 166

3. Education Qualification Distribution 167

4. Occupation wise Distribution 168

5. Income wise Distribution 169

6. Gender wise Distribution 170

7. Bank wise Distribution 171

8. Mean of modern looking equipment-Banks 179

9. Mean of Physical facilities-Banks 180

10. Mean of neat appearing-Banks 181

11. Mean of material associated with service visually-Banks 182

12. Mean of promise to do at said time-Banks 183

13. Mean of sincere interest in solving problem-Banks 184

14. Mean of perform the service right –Banks 185

15. Mean of service at right time they promise –Banks 186

16. Mean of insist on error –Banks 187

17. Mean of tell customers exactly –Banks 188

18. Mean of prompt service to customers –Banks 189

19. Mean of willing to help customers –Banks 190

20. Mean of employees never show to busy –Banks 191

21. Mean of employees behave instill confidence –Banks 192

22. Mean of customers feel safe in transaction –Banks 193

23. Mean of employees are courteous with customers –Banks 194

24. Mean of employees have knowledge to answer –Banks 195

25. Mean of customers get individual attention –Banks 196

26. Mean of bank operating hours –Banks 197

27. Mean of employees give personal attention –Banks 198

28. Mean of bank will have interest –Banks 199

29. Mean of employees will understand specific needs –Banks 200

1. Mean Scores and standard deviation (Perception) 83