Introduction 

The banking industry like many other financial service industries is facing a rapidly changing market, new
technologies, economic uncertainties, fierce competition and more demanding customers and the
changing climate has presented an unprecedented set of challenges (1). Banking is a customer oriented
services industry, therefore, the customer is the focus and customer service is the differentiating factors
(2). 

The banking industry in India has undergone sea change since post independence. More
recently, liberalization, the opening up of the economy in the 90s and the government's decision
to privatize banks by reduction in state ownership culminated in the banking reforms based on the
recommendations of Narasimha Committee (3). The prime mover for banks today is profit, with clear
indications from the government to 'perform or perish'. Banks have also started realizing that business
depends on client service and the satisfaction of the customer (4) and this is compelling them to improve
customer service and build up relationship with customers. 

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With the current change in the functional orientation of banks, the purpose of banking is redefined. The
main driver of this change is changing customer needs and expectations. Customers in urban India no
longer want to wait in long queues and spend hours in banking transactions. This change in customer
attitude has gone hand in hand with the development of ATMs, phone and net banking along with
availability of service right at the customer's doorstep. With the emergence of universal banking, banks
aim to provide all banking product and service offering under one roof and their endeavor is to be
customer centric (5). With the emergence of economic reforms in world in general and in India in
particular, private banks have come up in a big way with prime emphasis on technical and customer
focused issues. 

In this paper, the main contention of the author is to highlight the customer satisfaction through service
quality provided by the banks-SBI from the public sector banking and ICICI from the private sector
banking. Another contention is to demonstrate the performance of the two banks SBI & ICICI in terms of
customer satisfaction. 

The paper is organized in to six sections: Section- 1: starts with a brief profile of the banking industry,
especially the SBI and ICICI. Section- 2: covers Research Methodology comprising objectives,
Hypothesis, research design and scope of the study including nature of data collection. Section-3: lays
out the measurement of customer satisfaction with service quality and review of literature. Section-4: puts
forward the core strategies to address service quality gaps. Section-5: deals with Analysis and
Interpretation in line with the objective of the study. Section-6: briefly summarizes the conclusion and
policy implementation of the study. 

Profile of the Banking Industry-SBI and ICICI 

State Bank of India  

State Bank of India (SBI) is the largest bank in India. It is measured by the number of branch offices and
employees as the largest bank in the world. Established in 1806 as Bank of Bengal, it remains the oldest
commercial bank in the Indian Subcontinent and also the most successful one providing various
domestic, international and NRI products and services, through its network of 13,908 branches, including
4,731 associate banks' branches in India and overseas. It also provides financial services, such as life
insurance, merchant banking, mutual funds, credit card, factoring, security trading and primary dealership
in the money market. With an asset base of $126 billion and its reach, it is a regional bankingbehemoth.
The bank was nationalised in 1955 with the Reserve Bank of India having a 60 percent stake. It has laid
emphasis on reducing the huge manpower through Golden handshake schemes and computerizing its
operations. 

It also has non-banking subsidiaries and joint ventures, such as SBI Capital Markets Ltd., SBI DFHI Ltd.,
SBI Funds Management Pvt Ltd., SBI Factors & Commercial Services Pvt Ltd. and SBI Life Insurance
Company Ltd. Effective from April 20, 2005, it acquired a 51 percent stake in Indian Ocean International
Bank Ltd. 

Associate Banks 

* State Bank of Bikaner & Jaipur 

* State Bank of Hyderabad  

* State Bank of Indore  

* State Bank of Mysore  

* State Bank of Patiala  

* State Bank of Saurashtra  

* State Bank of Travancore  

Services provided by State Bank of India 

* Personal Banking 

* NRI services 

* Agriculture 

* International Banking 

* Corporate Banking 

* Small scale Enterprises 

* Domestic Treasury 

* Services 

* Interest Rates 

IT Initiatives 

According to PM Network (December 2006, Vol. 20, No. 12), State Bank of India launched a project in
2002 to network more than 14,000 domestic and 70 foreign offices and branches. The first and the
second phases of the project have already been completed and the third phase is still in progress. As of
December 2006, over 10,000 branches have been covered. 

The new infrastructure serves as the bank's backbone, carrying all applications, such as the IP telephone
network, ATM network, Internet banking and internal e-mail. The new infrastructure has enabled the bank
to further grow its ATM network with plans to add another 3,000 by the end of 2007 raising the total
number to 8,600. 

ICICI Bank  

ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is India's largest private sector
bank and second largest overall. ICICI Bank has total assets of about USD 56 Billion (end-Mar 2006), a
network of over 619 branches and offices, and about 2400 ATMs. ICICI Bank offers a wide range of
banking products and financial services to corporate and retail customers through a variety of delivery
channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life
and non-life insurance, venture capital and asset management. ICICI Bank's equity shares are listed in
India on stock exchanges at Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock
Exchange of India Limited and its ADRs are listed on the New York Stock Exchange (NYSE). During the
year 2005, ICICI Bank was involved as a defendant in cases of alleged criminal practices in its debt
collection operations and alleged fraudulent tactics to sell its products. 

History 

* 1955: The World Bank, the Government of India and representatives of Indian industry form ICICI
Limited as a development finance institution to provide medium-term and long-term project financing to
Indian businesses. 

* 1994: ICICI establishes ICICI Bank as a subsidiary. 

* 1999: ICICI becomes the first Indian company and the first bank or financial institution from non-Japan
Asia to list on the NYSE. 

* 2001: ICICI acquired Bank of Madura (est. 1943). Bank of Madura was a Chettiar bank, and had
acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank (established 1904) in the 1960s. 

* 2002: The Boards of Directors of ICICI and ICICI Bank approve the merger of ICICI, ICICI Personal
Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. After receiving all
necessary regulatory approvals, ICICI integrates the group's financing and banking operations, both
wholesale and retail, into a single entity. Also, ICICI bought the Shimla and Darjeeling branches that
Standard Chartered Bank had inherited when it acquired Grindlays Bank. 

International Expansion 

* 2002: ICICI establishes representative offices in NY and London. 

* 2003: ICICI opens subsidiaries in Canada and the United Kingdom (UK), and in the UK it establishes
alliance with Lloyds TSB. It also opens an Offshore Banking Unit (OBU) in Singapore and representative
offices in Dubai and Shanghai. 

* 2004: ICICI opens a rep office in Bangladesh to tap the extensive trade between that country, India
and South Africa. 

* 2005: ICICI acquires Investitsionno-Kreditny Bank (IKB), a Russia bank with about US$4mn in assets,
head office in Balabanovo in the Kaluga region, and with a branch in Moscow. ICICI Bank offers a high-
interest (5.4% gross) internet savings account to UK customers. Also, ICICI establishes a branch in the
Dubai International Financial Centre. 

* 2006: ICICI Bank UK opens a branch in Antwerp, in Belgium. ICICI opens representative offices in
Bangkok, Jakarta, and Kuala Lumpur. 

About ICICI Bank 

ICICI was established by the Government of India in 1960s as a Financial Institution (FI) other such
institutions were IDBI and SIDBI with the objective to finance large industrial projects. ICICI was not a
bank--it could not take retail deposits; nor was it required to comply with Indian banking requirements for
liquid reserves. ICICI borrowed funds from many multilateral agencies (such as the World Bank), often at
concessional rates. These funds were deployed in large corporate loans. All this changed in 1990s. ICICI
founded a separate legal entity--ICICI Bank which undertook normal banking operations--taking deposits,
credit cards, car loans, etc. The experiment was so successful that ICICI merged into ICICI Bank "reverse
merger" in 2002. 

ICICI Bank is the largest issuer of credit cards in India. It was the first bank to offer a wide network of
ATMs and had the largest network of ATMs till 2005, before SBI caught up with it. ICICI Bank now has the
largest market value of all banks in India, and is widely seen as a sophisticated bank able to take on
many global banks in the Indian market The bank is expanding in overseas markets. It has operations in
the UK, Hong Kong, Singapore and Canada. It acquired a small bank in Russia recently. It has tie-ups
with major banks in the US and China. The Bank is aggressively targeting the NRI (Non Resident Indian)
population for expanding its business. 

ICICI Bank Financials (as of March 31, 2006) 

* Sales: $5.79bn (prev. $3.18bn) 

* Profits: $0.569bn (prev. $0.360bn) 

* Assets: $56.3bn (prev. $30.06bn) 

* Market Value: (prev. $6.39bn; "Free Float Holding": $10.8bn)

Services Offered by ICICI Bank

(a) Personal Banking (b) NRI Banking (c) Corporate Net Ban

* Deposits * Money Transfer * Corporate Banking

* Loans * Bank Accounts * Cash Management
* Investments * Investments * Trade Services
* Cards * Property Solutions * Tradeway
* Insurance * Insurance * Forex Online
* De-mat Services * Loans * SME Services
* Online Services * Online Taxes
* Property Services

Services Offered by ICICI Bank

Research Methodology 

Objectives of the Study 

* To ascertain the perceptions of customers regarding the service quality in banks. 

* To analyze and compare the perceptions of the customers in private (ICICI) and public (SBI) banks. 

* To identify the areas which need improvement so that the quality of service of these banks is enhanced. 

* To study the strategies those are being adopted by ICICI in order to get more market share. 

* To study the strategies that are being adopted by SBI this can lead to its better performance. 
The study provides a comparative analysis of the performance of ICICI and SBI in Yamuna Nagar
district. 

Hypothesis 

The hypothesis of the study is: 

H0--There is no significant difference between the quality perceptions and customer satisfaction of public
and private sector banks. 

H1--There is significant difference between the quality perceptions and customer satisfaction of public
and private sector banks. 

Research Design 

Research design is a master plan specifying the method and procedure for collection and analyzing
needed information. The research design in this project is descriptive. Descriptive research includes
surveys and fact-finding inquiries of different kinds. For this study, descriptive research design is used
where the data is collected through the questionnaire. The information is gathered from the different
customers of the two banks, viz., State Bank of India and ICICI Bank located in the district Yamunanagar,
Haryana. Seventy five bank respondents and thirty bank officials each from both the banks were
contacted personally in order to seek fair and frank responses on quality of service in banks. The service
quality model developed by Zeithamal, Parsuraman and Berry (1988) has been used in the present study.
The main assumption of the model is that service quality is multi-dimensional concept. These dimensions
contribute to the assessment of the service quality in any setting. 

The statements in the construct are one-dimensional and performance based, which incorporate the
statements of 'SERVQUAL' model that can be used as measurement (Cronin & Taylor, 1992). The 21
statements have been grouped under five dimensions mentioned earlier. In order to ascertain the
perceptions of service quality, Likert's 5-point scale has been used for its suitability to estimate the range
and variations in the perceptions. The scale 1-5 represents '5' as strongly agree and '1' as strongly
disagree. 

Scope of the Study 

Present study has been restricted to time period from June 2007 to August 2007 in Yamuna Nagar and
Jagadhri. ICICI Bank of Yamuna Nagar town has been taken as a representative unit of private banks and
SBI Bank has been taken as a representative unit of public sector banks. A survey of 100 people has
been conducted who are the general people of the banks. Doctors, businessmen, professors and persons
from self employed category, etc, have been surveyed. 

Data Collection 

Primary Data were collected using the questionnaire and personal contact approach. The respondents
were approached personally on order to seek fair and frank responses on quality of service in both the
bank customers and bank officials of SBI and ICICI banks. Secondary data has been collected from the
internet, published reports and the fact sheets of SBI Bank and ICICI Bank. For analysis of the data,
mean and mean difference have been calculated. 

Measurement of Customer Satisfaction with Service Quality and Review of Literature 

Customer satisfaction is an important theoretical as well as practical issue for most marketers and
consumer researchers. Customer satisfaction is increasingly becoming a corporate goal as more and
more companies strive for quality in their products and services Customer satisfaction is the feeling or
attitude of a customer towards a product or service (6) after it has been used and is generally described
as the full meeting of one's expectations (7) Customer satisfaction is a major outcome of marketing
activity whereby it serves as a link between the various stages of consumer buying behaviour. For
instance, if customers are satisfied with a particular service offering after its use, then they are likely to
engage in repeat purchase and try line extensions (8). A study conducted by Levesque and McDougall (9)
confirmed and reinforced the idea that unsatisfactory customer service leads to a drop in customer
satisfaction and willingness to recommend the service to a friend. This would in turn lead to an increase in
the rate of switching by customers. 

To measure customer satisfaction with different aspects of service quality, Parasuraman, Valerie Zeithaml
and Berry developed a survey research instrument called SERVQUAL (10). It is based on the premise
that the customers can evaluate a firm's service quality by comparing their perceptions of its service with
their own expectations. SERVQUAL is seen as a measurement tool that can be applied across broad
spectrum of service industries. In its basic form, the scale contains 21 perception items and a series of
expectation items, reflecting the five dimensions of service quality. 

Their findings suggest that, in reality, SERVQUAL scores measure only two factors: intrinsic service
quality (resembling what is termed functional quality) and extrinsic service quality (which refers to the
tangible aspects of service delivery and "resembles to some extent what Gronroos refers to as technical
quality"). Generic dimensions customers use to evaluate service quality are credibility, security, access
communication, understanding the customer, tangibles, reliability, responsiveness, competence,
courtesy. 

SERVQUAL Scale 

The SERVQUAL scale includes five dimensions: tangibles, reliability, responsiveness, assurance and
empathy. Within each dimension are several items measured on a seven-point scale from strongly agree
to strongly disagree, for a total of 21 items. 

SERVQUAL Questions 

For actual survey respondents, instructions are also included, and each statement is accompanied by a
seven-point scale ranging from "Strongly Agree--5" to "Strongly Disagree--1". Only the end points of the
scale are labeled; there are no words above the number 2 through 4. 

Tangibles 

* Excellent banks (refer to cable TV companies, hospitals, or the appropriate service business throughout
the questionnaire) will have modern-looking equipments. 

* The physical facilities at excellent banks will be visually appealing. 

* Employees at excellent banks will be neat in appearance. 

* Materials (e.g., brochures or statements) associated with the service will be visually appealing in an
excellent bank. 

Reliability 

* When excellent banks promise to do something by a certain time, they will do so. 

* When customers have a problem, excellent banks show a sincere interest in solving it. 

* Excellent banks will perform the service right the first time. 

* Excellent banks will provide their services at the time they promise to do so. 

* Excellent banks insist on error free records. 

Core Strategies to Address Service Quality Gaps 

There are seven service quality gaps as depicted in figure 1. 

[FIGURE 1 OMITTED] 

Responsiveness 

* Employees of excellent banks will tell customers exactly when service will be performed. 

* Employees of excellent banks will give prompt service to customers. 

* Employees of excellent banks are always willing to help customers. 

* Employees of excellent banks are never too busy to respond to customer requests. 

Assurance 

* The behavior of employees of excellent banks will instill confidence in customers. 

* Customers of excellent banks will feel safe in their transactions. 

* Employees of excellent banks are consistently courteous with customers. 

* Employees of excellent banks are having the knowledge to answer customer questions. 

Core Strategies to Address Service Quality Gaps 

There are seven service quality gaps as depicted in figure 

Empathy 

* Excellent banks will give customers individual attention. 

* Excellent banks will have operating hours convenient to all their customers. 

* Excellent banks will have employees who give customers personal attention. 

* Employees of excellent banks will understand the specific needs of their customers. 

These findings do not undermine the value of Zeithaml, Parasuraman, and Berry's achievement in
identifying some of the key underlying constructs in service quality, but they do highlight the difficulty of
measuring customer perceptions of quality. Anne11 Smith notes that the majority of researchers using
SERVQUAL have omitted from, added to, or altered the list of statements purporting to measure service
quality. 

Comparing performance to expectations works well in reasonably competitive markets in which

customers have sufficient knowledge to purposefully choose a service that meets their needs and wants.
However, in uncompetitive markets or if customers do not have free choice, there are risks to defining
service quality primarily in terms of customers' satisfaction with outcomes relative to their prior
expectations. 

Zeithaml, Parasuraman, and Berry proposed a series of steps for closing gaps 1 to 6. Their prescriptions
are summarized in following: 
Gap 1 Prescription: Learn What Customers Expect? 

Understand customer expectations through research, complaint analysis, customer panels, etc. Increase
direct interactions between managers and customers to improve understanding. Improve upward
communication from contact personnel to management. Turn information and insights into action. 

Gap 2 Prescription: Establish the Right Service Quality Standards 

Ensure that top management displays ongoing commitment to quality as defamed by customers. Set,
communicate, and reinforce customer-oriented service standards for all work units. Train managers in the
skills needed to lead employees to deliver quality service. Establish clear service quality goals that are
challenging, realistic and explicitly designed to meet customer expectations. Clarify which job tasks have
the biggest impact on quality and should receive the highest priority. Ensure that employees understand
and accept goals and priorities. Measure performance and provide regular feedback. Reward managers
and employees for attaining quality goals. 

Gap 3 Prescription: Ensure That Service Performance Meets Standards 

Clarify employee roles. Ensure that all employees understand how their jobs contribute to customer
satisfaction. Match employees to jobs by selecting for the abilities and skills needed to. Perform each job
well. Provide employees with the technical training needed to perform their assigned tasks effectively.
Develop innovative recruitment and retention methods to attract the best people and build loyalty. Build
teamwork so that employees work well together, and use team rewards as incentives. Treat customers as
partial employees; clarify their roles in service delivery; and train and motivate them to perform well in
their roles as co-producers. 

Gap 4 Prescription: Ensure that Communication promises are Realistic 

Seek inputs from operations personnel when new advertising programs are being created. Develop
devising campaigns that feature real employees performing their jobs. Allow service providers to preview
advertisements before customers are exposed to them. Get sales staff to involve operations staff' in face-
to-face meetings with customers. Develop internal educational, motivational, and devising campaigns to
strengthen links among marketing, operations, and human resource departments. Ensure that consistent
standards of service are delivered across multiple locations. Ensure that devising comment accurately
reflects those service characteristics that are most important to customers in their encounters with the
organization. Manage customers' expectations by setting them know what is and is not possible and the
reasons why. Identify and explain uncontrollable reasons for shortcomings in service performance. Offer
customers different levels of service at different prices, explaining the distinctions. 

Gap 5 Prescription: Debriefing and Offering of Tangible Evidence 

The perceptions gap-recognizes that customers do not always correctly understand what the service has
done for them. This situation is particularly likely to occur with credence services, for which it is difficult to
judge performance even after delivery. Some service personnel make it a point to not only keep
customers informed during service delivery but also debrief them at the end and, sometimes, offer
tangible evidence. 

Gap 6 Prescription: Pre-testing of Communication Materials in Advance of Publication 

The interpretation gap-communication specialists in the firm need to pre-test all advertising, brochures,
telephone scripts, and website contents before they are published. Pre-testing, widely used by advertising
agencies, involved presenting communication materials to a sample of customers in advance of
publication. 

Gap 7 Prescription: Ensure That the Customer Expectations and Perceptions of the Service Are Matched 
There is need to end the service gap. Closing service quality gaps is an essential step to maximize
customer satisfaction in the service industries. It is commonly said that what is not measured is not
managed. Without measurement, managers can't be sure whether service quality gaps exist, let alone
what types of gaps, where they exist, and what potential corrective actions should be taken. And, of
course, measurement is needed to determine whether goals for improvement are being met after
changes have been implemented. 

Analysis and Interpretation 

In line with the objective of the study, the main areas of questioning and analysis concerned perceptions
of service quality and its dimensions: tangibility, reliability, responsiveness, assurance and empathy. As
stated, perceptions were measured on a seven point strongly agree to strongly disagree scale. Mean
differences between service quality perceptions of banks and respective customers were calculated
separately for SBI and ICICI. The results obtained from this computation are presented below in Tables 1
to 6. 

Overall Service Quality 

The analysis of Table-6 clearly shows that there exists wide perceptual difference among Indian (public
sector) banks regarding overall service quality with their respective customers, whereas the said
perceptual difference in private banks is narrows. 

The high mean difference of SBI (20.68) shows that there is a significant difference in the quality of
service being delivered by SBI with the quality of service as perceived by their respective customers. In
other words, service quality delivered by banks such as SBI does not match the expectations of their
respective customers. Though, ICICI Bank is also below its assessment of delivering quality service to its
customers, yet the perceptual difference is narrow (4.91) when compared with SBI. 

Dimension-wise Analysis 

Tangibility: The data in Table-1 brings to light the high difference in the perceptions of the banks--SBI and
ICICI with their respective customers on tangibles. The data reveals that banks such as ICICI are
exceeding the perceptions of their respective customers, while SBI with a high mean difference of 5.28
fall much below the perceptions of their customers on this dimension of service quality. The element wise
analysis of tangibility shows serious short fall of perceptions among banks like SBI on up to date
equipments and physical facilities available in a bank as perceived by their respective customers. 

Reliability: The analysis of reliability dimension of service quality shows significant differences in the
perceptions of SBI with their respective customers. SBI (2.43) shows that they fall below the expectations
of their customers in delivering quality services, whereas ICICI bank is exceeding the perceptions of their
customers in this dimension. The element wise analysis of reliability shows that SBI is far below the
perceptions of their respective customers as far as keeping promise and being sincere in solving the
problems are concerned. 

Responsiveness: The data in Table-3 brings to light that there are significant perceptual differences on
the responsiveness dimension of service quality with their customers. High mean difference of SBI (3.65)
shows that the bank is far below the perceptions of their customers on the said dimension. The perceptual
difference on said dimension between ICICI and its customers is narrow (0.66). The element wise
analysis of this dimension shows that SBI is falling below the perceptions of their customers on
employees providing prompt services. 

Assurance: The perceptual difference between ICICI and its customers is high as is evident from the
mean difference. The respondents of SBI have given a low rating on assurance dimension to the bank.
The element wise analysis shows that ICICI is exceeding the perceptions of their customers as far as
trust worthiness and feeling safe in transacting with the bank are concerned. 
Empathy: The data analysis of Table-5 discloses the fact that banks such as SBI stand away from their
customers regarding delivery of quality services. There exists a wide gap between the perceptions of
banks such as SBI and their customers as is evident from the high mean difference (5.50). However, it is
surprising to note that ICICI is falling below the perceptions of their customers (4.09) on this dimension. 

Hypothesis Testing  

T-Test is applicable to compare the mean of two populations. 

The tabulated value with three degrees of freedom and level of significance as 0.5 is 0.878. 

The calculated value with same specifications is 0.706591. 

As the calculated value is less than the tabulated value (i.e., 0.726591 < 0.878), this denotes that
the alternative hypothesis is acceptable and there is significant difference between the quality perceptions
and customer satisfaction of public and private sector banks. 

Conclusion and Policy Implications 

The banking sector in India is undergoing major changes due to competition and the advent of
technology. The customer is looking for better quality services which enhance his/her satisfaction. This
study derives its basis from various research findings and is also in line with empirical findings with
respect to customer satisfaction by other researchers. To sum up, the results of the study lead us to the
following conclusion and policy implication: 

* The customer satisfaction in terms of service quality is a relational marketing paradigm. The

relationships are mostly viewed from the perspective of the firm providing services. For service firm in our
case the banks, building strong relationship is important for improving customer satisfaction through
service quality. 

* Public sector banks like SBI fall much below the perceptions of their customers on all dimensions of
service quality. Private Banks such as ICICI bank are exceeding the perceptions of their customers on
tangibility and reliability dimensions of service quality. 

* Banks like ICICI are closer as regards expectations of their customers. They are also not far away from
the perceptions of their customers as far as other dimensions of service quality are concerned. This
observation undoubtedly reveals the bleak reality that SBI does not meet the expectations of their
customers. In delivery of quality service in banks, what matter are speed, accuracy, promptness,
reliability, individualized attention, etc. Better results can be achieved through proper use of relevant
banking technology. These are the areas where our banks are still lagging behind. 

* The above findings suggest the need and relevance of heavy investment on tangibles particularly
computer based banking, internet and intranet services, tele-banking, 'anywhere and anytime banking',
etc., besides physical facilities and communication material. This will help in delivering quick and accurate
services to customers as well as reducing the workload of frontline staff and thereby providing ways to
employees to respond to customer requests. This investment will also ensure convenient banking
hours on which the services of our banks are perceived by the customers to be very low. 

* Banks should continually assess and reassess how customers perceive bank services so as to know
whether the bank meets or exceeds or is below the expectations of their customers. Such an appraisal,
however, is a tedious task because customer service is complex in nature and dynamic in action.
Moreover, it can vary greatly from one branch to another. Also, what is 'good service' today may become
'indifferent service' tomorrow and 'bad service' the next day. Frequent customer surveys, therefore, throw
light on ratification and refinement which will go a long way to improve the service quality in banks. 

* Customer service must match with marketing efforts, otherwise a customer would remain a dissatisfied
soul and all marketing efforts will go down the drain. The process of fulfilling customer needs, therefore,
requires tailoring bank services to what customers want, rather than making them accept whatever banks
can conveniently provide. The needs and expectations of the customer changes from time to time and, as
such, innovating of new services and refinement of existing services is imperative. Today, customers are
exposed to the standards of international banking and expect the same range of service quality from
Indian banks. If public sector banks fail to regulate the quality and efficiency of their financial services to
match or surpass those of private banks or foreign banks, time is not far away when they will lose
substantial market share to private and foreign banks. 

Banks must pay attention to potential failure points and service recovery procedures, which become
integral to employees' training. In other words, it amounts to empowering employees to exercise
responsibility, judgment and creativity in responding to customers' problems. 

Notes 

(1.) Lovelock, Cristopher, 2001, service Marketing: People, Technology, Strategy, 4the Edition, Prentic
Hall. 

(2.) Vimi Jham and Kaleem Mohd Khan, "Customer satisfaction in the Indian Banking Sector. A
Study" IIMB Management Review, Vol. 20 No. 1, March 2008. 

(3.) Narasimham Committee Report, 1997,--[Link]/enews/apr98.

pdf<[Link]

(4.) Jha, S. M. 2000, Bank Marketing Millennium Edition, Mumbai: Himalaya 

(5.) Jham, Vimi, 2005, "Insights into Customer Interactions in the Banking Industry--A Qualitative
Relationship Marketing Study", Review of Professional Management, Vol. 3, No. 1 pp 10-17. 

(6.) Bitner, MJ, and AR Hubbert, 1994, "Encounter Satisfaction versus overall Satisfaction versus
Quality", in Rust, R T and Oliver, R L (Eds), Service Quality: New Directions in Theory and Practice,
London: Sage. 

(7.) Oliver, R L, 1980, "Cognitive Model of the Antecedents and Consequences of satisfaction Decisions",
Journal of marketing Research, Vol. 17, No, pp 460-9 

(8.) East, R., 1997, Consumer Bhaviour: Advances and Applications in Marketing, London: Prentice--
Hall. 

(9.) Levesque, T, and GHG McDougall, 1996, 'Determinants of Customer Satisfaction in Retail Banking,'

International Journal of bank Marketing, Vol 14, No 7 pp 12-20 

(10.) A. Parasuraman, Valarie A. Zeithaml, and Leonard Berry, SERVQUAL: A Multiple Item Scale for
Measuring Customer Perceptions of Service Quality, Journal of Retailing 64 (1988). 

(11.) Anne M. Smith, "Measuring Service Quality: Is SERVQUAL Now Redundant?" Journal of Marketing
Management (Jan/Feb/Aril 1955) pp 257-276
Table 1: Comparative Perceptions of Banks and their Respective
Customers about Tangibility

State Bank
of India ICICI Bank
S. SERVQUAL
No. Dimension Group Mean Group Mean

1 Up to date equipment BO 5.63 BO 6.24

 BC 4.10 BC 6.53
2 Physical facilities BO 5.35 BO 6.28
BO 3.47 BC 6.58
3 Neatness of employees BO 6.16 BO 6.97
BC 5.18 BC 6.95
4 Communication material BO 5.99 BO 6.31
BC 5.11 BC 6.89
Tangibility(1+2+3+4) BO 23.13 BO 25.79
BC 17.84 BC 26.93

Note: BO and BC denotes Bank officials and Bank customers respectively

Bank SBI ICICI

Numbers BC 75 75
BO 30 30

Table 2: Comparative Perceptions of Banks

and their Respective Customers about Reliability

Sr. No Servqual Dimension State Bank ICICI Bank

of India

Group Mean Group Mean

1 Promise to do something BO 6.06 BO 6.14

by a certain time BC 5.60 BC 6.42

2 Being sincere in BO 6.32 BO 6.97

solving problem BC 5.63 BC 6.46

3 Performing the service BO 6.13 BO 6.21

right the first time. BC 5.35 BC 6.57

4 Providing the service BO 6.02 BO 6.03

at the promised time. BC 5.7 BC 6.13

5 Keeping records BO 6.85 BO 6.97

correctly. BC 6.46 BC 6.99

Reliability(5+6+7+8+9) BO 31.37 BO 32.31

BC 28.94 BC 32.57

Note: BO and BC denotes Bank officials and Bank customers respectively

Bank SBI ICICI

Numbers BC 75 75
BO 30 30

Table 3: Comparative Perceptions of Banks and their

Respective Customers about Responsiveness

S. SERVQUAL Dimension State Bank ICICI Bank

No. of India

Group Mean Group Mean

 1 Telling customers exactly when BO 6.11 BO 6.21
the services will be performed. BC 5.39 BC 6.33

2 Employees providing prompt BO 5.86 BO 6.21

service to customers. BC 4.65 BC 6.11

3 Employees who are always BO 6.10 BO 6.79

willing to help. BC 5.18 BC 6.33

4 Employees who are never too BO 5.31 BO 6.28

busy to respond to customers BC 4.52 BC 6.04
requests.

5 Responsiveness(10+11+12+13) BO 23.38 BO 25.48

BC 19.73 BC 24.81

Note: BO and BC denotes Bank officials and Bank customers respectively.

Bank SBI ICICI

Numbers BC 75 75
BO 30 30

Table 4: Comparative Perceptions of Banks and their

Respective Customers about Assurance

Sr. No. SERVQUAL Dimension State Bank ICICI Bank

of India

Group Mean Group Mean

1 Employees who BO 6.04 BO 6.24

are trustworthy. BC 5.31 BC 6.15

2 Feeling safe in BO 6.88 BO 6.21

transacting with banks. BC 6.62 BC 6.11

3 Employees who are BO 6.12 BO 6.48

consistently courteous. BC 5.03 BC 5.78

4 Employees who have the BO 6.05 BO 6.24

knowledge to answer BC 5.24 BC 5.49
customers' questions.

5 Assurance (14+15+16+17) BO 25.09 BO 25.93

BC 22.19 BC 24.41

Note: BO and BC denotes Bank officials and Bank customers

respectively.

Bank SBI ICICI

Numbers BC 75 75
BO 30 30
Table 5: Comparative Perceptions of Banks and their
Respective Customers about Empathy

State Bank ICICI Bank

of India
Sr. No. SERVQUAL
Dimension Group Mean Group Mean

1 Bank that gives BO 6.02 BO 6.28

individual attention. BC 5.28 BC 6.29

2 Convenient operating BO 6.23 BO 7.00

hours. BC 4.85 BC 6.88

3 Employees who give BO 6.16 BO 6.21

personal attention. BC 5.17 BC 6.06

4 Bank which has your BO 6.24 BO 6.62

best interests at least. BC 4.99 BC 5.15

5 Employees who understand BO 5.98 BO 6.62

specific needs of the BC 4.84 BC 5.15
customer.

6 Empathy(18+19+20+21+22) BO 30.63 BO 33.10

BC 25.13 BC 29.02

Note: BO and BC denotes Bank officials and Bank customers

respectively.

Bank SBI ICICI

Numbers BC 75 75
BO 30 30

Table 6: Comparative perceptions of banks and their Respective

Customers about Overall service Quality in Banks

SERVQUAL State Bank of India ICICI Bank

Dimension
Group Mean Group Mean

Overall Service BO 133.52 BO 142.62

Quality BC 113.86 BC 137.36