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Commercial banking in India
began in 1770 with the estab-
lishment of the first joint stock bank named the Bank
of Hindustan, by an English Agency in Calcutta (now Kolkata). In fact,
the real beginning of modern commercial banking in the country
was made with the establishment of the Bank of Bengal in 1806. In
1881, the first purely Indian Bank, i.e., Oudh Commercial Bank, came
into existence. This was followed by the setting up of the Federal Bank of
India (now Reserve Bank of India in 1935). The banking sector
gathered further momentum with the establishment of the State Bank of
India (SBI) in 1953. Presently, the SBI together with its seven associates,
19 other nationalized banks (New Bank of India was merged
with Punjab National Bank in September 1993), 17 major private banks,
10 foreign banks and a large number of Regional Rural Banks (RRBs)
and Cooperative Banks are operating in India.
Public sector banks offer various types of services to their
customers. The services rendered by them can be broadly classified as traditional
services and innovative services. Traditional services include deposit
accounts; grant of advances; collection of cheques, drafts and bills of
exchange; safe deposit lockers; providing different types of loans like
personal loan, housing loan, vehicle loan, educational loan, etc. The
innovative services offered by the public sector banks include telephone
banking; Internet and mobile banking; automatic teller
machine (ATM), electronic fund transfer; core banking
solutions; selling insurance policies, gold coins, debit card, credit card
and smart card facilities, etc.
The public sector banks no longer enjoy their coveted position of
the past. This is because during the last few years, tremendous changes
have taken place in the banking environment. There has been a massive
expansion of foreign and private sector banks in the country.
Distribution, once the most important differentiator for public sector
banks through their extensive branch networks, has become redundant in
the face of new servicing channels such as ATMs and net banking. In
short, competition to public sector banks has grown manifold. Therefore,
they have to emphasize more on providing qualitative and timely service
to customers in order to retain them and increase their market
share. Against this backdrop, this article attempts to study customer
satisfaction with regard to the services provided by public sector banks in India. |
