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1. A STUDY ON PERCEPTION OF CUSTOMERS TOWARDS BANKING SERVICES: A CASE OF SBI
Dr. Shalini Dubey1
(Associate Professor), Kanika Verma2
(Research Scholar)
1, 2
Department of Applied Business Economics, Faculty of Commerce
Dayalbagh Educational Institute (Deemed University)
Dayalbagh, Agra, U.P., India
Abstract-. Nowadays banking industry is one of the
largest service sectors in India. Its main aim is to
attract the Asian market in terms of investment. The
prime function of banking sector is to provide
efficient services to its customers. It consist public
and private sector financial banks whose objective is
to serving people for their banking, financial and
economic needs. This paper highlights the impact of
service quality on individual customers of Indian
banking sector. This study is a type of descriptive
research using non-probability sampling technique
and the sample of 50 individual clients has been
taken according to the convenience of the researcher.
For this purpose the questionnaire based on service
quality dimensions was prepared which has two parts
i.e. Expectations and perception. The various
statistical tools have been used accordingly to
compile the result. This paper make several
suggestions and contributions regarding further
studies related to service quality in banking industry.
Keywords: Service Quality Dimension, Banking
Services, Customer Satisfaction.
1. INTRODUCTION
In India, banking industry plays a pivotal role in the
economic development and form the core of the
money market in growth of country. Among all,
banking sector is one of the huge service sectors in
India and strongest driver to Indian economic growth.
In the present scenario, it is running in a dynamic
challenge concerning both customer base and
performance so as to provide efficient services to its
customers. Banks are trying hard to win customer
satisfaction by providing better quality services.
Today banks interest has shifted from customer
acquisition to their satisfaction and retention. In
today’s competitive environment, banking services
plays a dominant role in customer satisfaction and
service quality has emerged as one of the important
aspect.
The paper highlights the impact of service quality on
individual customers of Indian banking sector by
analyzing the gap between their expectations and
perceptions regarding the services consumed.
2. SERVICE QUALITY AND CUSTOMER
SATISFACTION IN INDIAN BANKING
INDUSTRY
Service quality and customer satisfaction are very
foremost concepts that banking industry must
understand in order to remain competing in business.
It is very crucial to know how to measure these
factors from the consumers’ prospects in order to
understand their demands and to make them satisfy.
Banking Services are considered very important
because it leads to higher customer satisfaction,
reduced cost, profitability, customer loyalty and
retention.
According to Parsuraman, Zeithaml & Berry (1985)
[1] “Service quality is the difference between the
service expectation and service actually received by
the customer”. Service quality is a vital and essential
tool for attaining operational efficiency and improved
business performance which helps to satisfy and
retain customers. Customer satisfaction is seen as
difference between customer’s expectations and
customers experience or perceptions after getting the
services. Customer satisfaction depends on such
factors like reliability, assurance tangibles, empathy
and responsiveness. Customer satisfaction is related
with the type of service quality, if the quality of
service provided by the service provider is good then
this leads to the higher satisfaction. For measuring
the service quality, it is necessary that the service
provider with respect to the customer expectation as
well as the customer perception should understand
the service quality parameters. This will help in
getting the better service and provide greater level of
customer satisfaction. The customer expectation with
reference to various quality parameters differs from
person to person. Such change in perception can
affect the customer satisfaction.
3. SERVICE QUALITY DIMENSIONS
Parasuraman et al. (1988) [2] identified five
dimensions of service quality (viz. reliability,
responsiveness, assurance, empathy, and tangibles)

2. that link specific service characteristics to
consumers’ expectations.
Table1: Service Quality Dimensions
Dimensions Factors
Reliability Ability to perform the promised service
dependably and accurately.
Assurance Knowledge and courtesy of employees
and their ability to convey trust and
confidence.
Tangibles Appearance of the physical facilities,
equipment, personnel and
communication materials.
Empathy Caring and individualized attention to
customers.
Responsiveness Willingness to help customers and to
provide prompt services.
Source: Parsuraman (1988) [2]
In table 1, service quality dimensions have been
explained which was investigated by Parsuraman
(1988) [2]. As per the gap model given by
Parsuraman & Zeithaml there exists a gap between
the customer perception & customer expectation.
This gap is called as the customer gap. Customer
Expectation represents the actual expected service &
Customer Perception reveals the actual received
service. In this study the researcher studies the impact
of service quality offered by Indian banking industry
on individual customers by using this customer gap
of expectation and their perception.
4. VARIABLES
Independent Variables: Individual Customers.
Dependant Variables: Service Quality Dimensions.
5. LITERATURE REVIEW
Tazreen S. (2012) highlights the implication of
SERVQUAL model for measuring service quality in
terms of the differences between the customer
expectations and their perceptions regarding the
service offered. The finding reveals the gap between
expectation and perception of service quality
dimensions regarding customer services.
Responsiveness shows a highest gap scores while
four remaining dimensions shows the comparatively
smaller gap scores.
Agathee U. S. (2010) this study show huge gap
between customers’ perception and expectation for
reliability and responsiveness. This study highlights
the need for bankers to gear customer service and
quality improvements efforts towards components of
reliability and responsiveness.
Arasli H., Katircioglu S.T., Smadi S. M. (2005)
purpose of this was to analyze and compare service
quality in the commercial banking sector and to
investigate the relationship between overall bank
customer satisfactions. Research revealed that the
expectations of customers in both areas were not met
and the largest gap was found in the empathy
dimension. Whereas assurance had the highest impact
on customer satisfaction and overall satisfaction of
customers.
Ismail A., Bootwala and Gokhru A. (2012) in their
study service quality issue are critically examines
from the perspectives of customers with respect to a
developing economy India. In addition, it also
examined the impact of various demographic
variables on selection of banks.
Ahmed K. and Chowdhury T. A. (2013) in his
study found that nationalized commercial banks and
private commercial banks are almost equally reliable
but services of private commercial banks give more
assurance to the customers. The study revealed that
the performance of nationalized commercial banks
suffer in terms of empathy and tangibles. The
customers feel that private commercial banks are
performing better than nationalized commercial
banks. So Nationalized Commercial Banks needs to
take initiative for service quality improvements.
6. OBJECTIVE
The purpose of the study is to explore the basic
dimensions of service quality offered by Indian
banking industry and its impact on individual
customers by using the gap between the customer
expectations and perceptions regarding the services
offered by banking industry.
7. RESEARCH DESIGN AND METHODOLOGY
7.1 Sample Unit
Individual client of Agra and Meerut city having
bank account in SBI.
7.2 Hypothesis
There is no significant difference between the
expectations and perceptions of customers regarding
the services consumed.
7.3 Sample Size
50 individual customers who holding account in
branches of SBI in Agra and Meerut city has been
taken as sample size for the study.

3. 7.4 Sampling Procedure
The researcher follows non-probability sampling
method in the selection of sample as per the
convenience.
7.5 Primary Data
To achieve the objective, data has been collected to
know about the perceptions of customers related to
services offered by SBI through questionnaire which
is based on service quality dimensions.
7.6 Secondary Data
Secondary data have been collected through, different
researches, published research papers, thesis,
journals, articles, related websites etc.
7.7 Methodology
This study has been conducted on the individual
customers of State Bank of India. To evaluate the
dimensions of service quality, ten statements were
chosen from the structured service quality
questionnaire and then modified to make it specific
and best suitable for customers of banking sector.
Two sets of questionnaires were prepared including
ten identical statements. One set of questions ask
about the expectation of customers and the other set
asks their views and perception. A five point Likert
scale is applied to get the desired level of expectation
and perception associated with each service quality
dimensions. After conducting the survey,
questionnaires were collected for tabulation and
analysis. The test of significance has been applied on
the basis of the comparison of mean values of
expectation and perception.
8. ANALYSIS AND INTERPRETATION
For this’ study, data collected were duly edited,
classified and analyzed using T-test as statistical
techniques. The data were presented through simple
classification and tabular representation which
represents mean difference of each service quality
dimension and calculation table which represents the
comparison of expectation and perception of
customers regarding services. The calculated T-value
has been tested at 5% level of significance.
Table 2: The following tables represent the mean
difference between expectation and perception of
customers
Service Quality
Dimensions
Mean
Difference
Of Each
Statement
(P-E)
Mean
Difference
Of Each
Dimension
RELIABILITY
Statement 1 0.86 0.72
Statement 2 0.58
ASSURANCE
Statement 3 1.18 1.02
Statement 4 0.86
TANGIBLES
Statement 5 0.12 0.42
Statement 6 0.72
EMPATHY
Statement 7 0.66 0.75
Statement 8 0.84
RESPONSIVENESS
Statement 9 0.88 1.06
Statement 10 1.24
Source: Survey
In the table 2, the researcher finds the mean
difference of each dimensions regarding service
quality offered by SBI. This table shows the average
gap score between customer expectation and
perception. The average gap result and mean
difference for all the service quality dimensions are
showing positive values which indicates that the
customers expectation are lesser than their actual
perception which shows satisfaction in customers.
Mean difference for reliability, assurance, tangibles,
empathy and responsiveness are 0.72, 1.02, 0.42,
0.75 and 1.06 respectively for all the service quality
dimensions which represents higher satisfaction
regarding services. Responsiveness showing highest
negative gap score which represents that there is
needed to improve in this dimension whereas the rest
four dimensions show comparatively lesser gap that
represents higher customer satisfaction.
8.1 Hypothesis Testing
H0: There is no significant difference between the
customer expectations and their perceptions
regarding the services consumed.

4. Table 3: Comparison of expectation and
perception of customers regarding services
consumed
areas N M SD Cal
-t
Table
value
R
expec
tation
50 16.7
8
6.13
4.94 2.132
H0 is
rejecte
d
perce
ption
50 24.7
2
4.89
Source: Survey
In the Table 3, N stands for number of sample size,
M for mean, SD stands for standard deviation and R
stands for result. This clearly shows the t-value of the
service quality dimensions. As we know that when t-
value is exceeding the table value then the hypothesis
is rejected. The above analysis shows that the t -
value for service quality is 4.94 and table value at 5%
level of significance is 2.132 which clearly depicts
that calculated value of service quality dimensions is
greater than the table value therefore the above
Hypothesis is rejected which conclude that there is
significant difference between customer expectation
and their perception regarding the services offered by
the Indian banking sector.
9. LIMITATIONS
There are several limitations associated with this
study:
1. The geographic scope of the study is restricted to
Agra and Meerut city.
2. The study was only focused on service quality
and individual customers of Indian bank.
3. The result is based on primary data and
secondary data that have its own limitations.
4. The sample size and no. of actual respondents
are limited that does not represent the whole
population due to non- probability sampling
method.
5. Cost and time did not allow for more extensive
data collection.
10. CONCLUSION AND SUGGESTIONS
The aim of this study was to analyze the customers’
perceptions regarding service quality dimensions to
achieve the aforesaid objective. In this research, the
researcher examines the basic dimensions of service
quality and its impact on individual customers by
using the gap between the customers’ expectations
and their perception. This study concludes that
service quality is the most significant determinant
among the customers in SBI branches in Agra and
Meerut city. This research should be carried out in
order to enhance the better understanding regarding
service quality dimensions and customer retention
strategies also in terms of profitability and growth
this study may be replicated to other areas with a
large sample size so that generalized results should
be obtained. Hence to satisfy and retain customers,
the Indian banking sector needs to enhance the
quality of service for delivery banking facilities.
11. REFERENCES
1. Parasuraman & Valarie A. Zeithaml and L. L.
Berry (1985) “A Conceptual Model of Service
Quality & its Implications for Future Research”,
Journal of Marketing (fall 1985) vol. 49 Pg. 41-50
(ISSN: 0022-2429).
2. Parasuraman, A., Zeithaml, V.A. and Berry, L.L.
(1988) “SERVQUAL: A multiple-item scale for
measuring consumer perceptions of service quality”,
Journal of Retailing, spring, pp. 12-40.
3. Tazreen S. (2012) “An Empirical Study of
SERVQUAL as a tool for Service Quality
Measurement” IOSR Journal of Business and
Management (IOSRJBM) Vol.1, Issue: 5 pp 09-19
(ISSN: 2278-487X).
4. Agathee U. S. (2010) “An Assessment on Service
Quality in the Mauritian Banking Sector”,
International Research Symposium in Service
Management, Le Meridien Hotel, Mauritius pp 24-27
August 2010 (ISSN: 1694-0938).
5. Arasli H., Katircioglu S.T. and Smadi S. M. (2005)
“A Comparison of Service Quality in the Banking
Industry: Some Evidence from Turkish- and Greek-
speaking areas in Cyprus”, International Journal of
Bank Marketing, Emerald vol.23. (ISSN: 0265-
2323)
6. Ismail A., Bootwala and Gokhru A. (2012) “A Study
on Customers’ Perception on Services provided by
banks in the city of Ahmadabad” Pacific Business
Review International Vol.5 Issue: 5 pp 109-121
(ISSN: 0974-438X)
7. Ahmed K. and Chowdhury T. A. (2013) “Measuring
Customer Satisfaction in Nationalized Commercial
Banks and Private Commercial Banks of Bangladesh
through SERVQUAL Model”, International Review
of Business and Social Sciences Vol.2 Issue: 4 pp 11-
22 (ISSN: 2226-4124).
8. Rust, R. and Zahorik, A. (1993) “Customer
Satisfaction, Customer Retention and Market Share”,

5. Journal of retailing Vol.69 Issue: 2, pp. 193-215
(ISSN: 0022-4359).
9. Sadeghi T.and Bemani A. (2011) “Assessing the
Quality of Bank Services by Using the Gap Analysis
Model” Asian Journal of Business Management
Studies Vol. 2 Issue: 1 pp 14-23 (ISSN 2222-1387)
IDOSI Publications, 2011.
10. Reena Roy, Dr. P. Vaijayanthi, and K.A.
Shreenivasan “Service Quality Gap of Foreign Banks
in India using PZB Service Quality Model – An
Empirical Study”. International Conference On
Software and Computer Applications IPCSIT vol.9.
12. BIBLIOGRAPHY
12.1Books
1. AMA Handbook for Customer Satisfaction: A
Complete Guide to Research, Planning and
Implementation.
2. A Handbook for Measuring Customer
Satisfaction and Service Quality.
12.2 Journals
1. SAJOSPS
2. Emerald Journal
3. Pacific Macmillan Journal
4. ApexJournal
12.3 Websites
1. http://www.emeraldinsight.com
2. http://www.academicjournals.org
3. http://economictimes.indiatimes.com
4. http://www.palgrave-journal.com
5. Http: //www.ssrn.in

6. APPENDIX
CUSTOMERS QUESTIONNAIRE
Dear Respondents,
All your information will remain confidential and used for an academic purpose only. Please answer all the
questions as honestly as possible and your full participation would greatly help the cause of the study.
Question below are based on a 1 to 5 point scale (1-Strongly Agree 2-Agree 3-Moderate 4- Disagree 5- Strongly
Disagree). Kindly read the question carefully before choosing your response for the question and tick (√) the
appropriate box as per you understanding, experience, and perception related to the service quality dimensions.
RESPONDENTS PROFILE
Name:
Education: Occupation:
(present status)
Address:
Email:
Age: Male ☐
Female ☐

7. DIMENSIONS STATEMENT
EXPECTATION PERCEPTION
SA A M D SD SA A M D SD
Reliability
1. The bank should bear all the services
within the promised deadlines.
2. You should feel secure in all your
transactions with the bank.
Assurance
3. The employees should be quick and
efficient in service delivery.
4. All the employees should have strong
knowledge to answer your queries
about the offerings and their
operations.
Tangibles
5. The bank should maintain all the
necessary modern equipment.(online
banking, ATM services, internet
banking etc.)
6. The branch should have convenient
sitting and waiting arrangement.
Empathy
7. The bank should maintain strong
relationship.
8. The bank should always inform you
about new and attractive schemes and
always suggest you for taking the
correct decision.
Responsiveness
9. Whenever you face any kind of
banking problems, the employee
should help you to resolve the
problem.
10. The bank should operate a regular
and efficient complaint handling
process.