The phenomenal changes taking place in the banking industry indicate that the new private sector banks have gradually won the market with their customer-centric approach. The depleting market share of the public sector banks poses a threat to them. This study mainly focuses on the primary opinion of the customers of these banks. The State Bank of India (SBI) is selected as the representative of the public sector banks and HDFC, ICICI, IDBI and UTI as representatives of the new private sector banks. The study is divided into three parts: the first part deals with customers' preferences while selecting the bank of their choice; the second part covers the satisfaction level of the customers; and the third part is an attempt to record the instances of customers shifting from one bank to another (competitor bank) due to dissatisfaction. It is evident from the study that the customers of private banks are more satisfied than those of the SBI. Customers of the SBI are more sensitive with regard to the processing time taken for account handling and technological updates. Dissatisfaction in those areas can lead to shifting to another bank, while in the case of private banks' customers, proximity to residence and sometimes delay in the processing time can be the likely reasons to change the existing bank with a new one.
Banking is a personalized service-oriented industry and hence provides services, which should satisfy the customer's need. The competition between public and private sector banks has put pressure on banks to improve their customer services and work for image building and brand equity. Banks are the most common institutions and media for transfer of funds and investments. Though a number of banks had been functioning for centuries in the Indian market, the real banking started only after the Banking Reforms in 1991. The liberalization policy of the Government of India permitted entry of private players into the banking industry, which witnessed the entry of nine new generation private banks during the period 1994-97.
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