Banking—the intermediation mechanism between savers and investors of capital—is an essential instrument for the smooth conduct of not only national economy but also of the world. That is precisely why banking has been attracting the best of attention of nations and their administrators all along. It is of course a different matter that today banks and bankers are receiving global attention, to be precise, the flak from the public and leaders for transferring inestimable amount of risk across the national borders through their indiscriminate selling of financial products that ultimately led to the global economic `meltdown'.

That aside, banks, by virtue of their pivotal role in mopping up savings from its customers and transferring them as investable capital to entrepreneurs in the form of loans and bonds, heavily depend on their customers for their very existence. Thus, customers constitute one of the core assets of a bank, which it has to not only necessarily preserve but also expand (i.e., its customer base). The obvious way of retaining customers is by satisfying the felt and unfelt needs of the existing as well as prospective customers. With the advent of technological innovations—convergence in computation and communication technologies—Customer Relationship Management (CRM) has emerged as one of the most innovative and state-of-the-art tools to create customer base and exploit it to reduce the distance between the customer and the bank. It indeed enables a bank to undertake customer and market analysis, and customer profitability analysis, and helps in the acquisition of new customers, sales development, assessment of risk associated with customers, fraud detection, reduction in operating cost and the overall improvement in its operational efficiency in rendering satisfactory services to the customer.

Against this backdrop, the author, John Mylonakis, of the first article in the issue, "Customer Relationship Management Functions: A Survey of Greek Bank Customer Satisfaction Perceptions", has studied the CRM functions as applied in the banking sector from the marketing perspective and presented his interesting findings. The author carried out a study in Athens, Greece, in 2007, to assess bank customer views on banking institutions, the way they were catering to satisfy the customer needs, as also the new initiatives launched by the banks to satisfy the growing customer demands, through a structured questionnaire. The study revealed that a majority of the customers were satisfied with their banks. Customers were also of the opinion that new technologies were quite helpful in their communication with the banks, while, of course, the aged customers found it too difficult to transact with banks through new technologies. Many satisfied customers felt that the financial services offered by their banks were not covering their needs fully, for they had to approach different banks for different services. It was also found that CRM tool enabled banks to cross-sell their products and thereby improve their operating margins. By and large, it was found that young customers backed by high educational qualifications were more satisfied with their banks.

Looking at the ongoing financial crisis, the need for efficient functioning of the financial sector needs to be hardly stressed here. And that is what the next article of the issue—"Determinants of Cost Efficiency of Commercial Banks in India"—talks about. The authors, Siva Reddy Kalluru and Sham Bhat K, have attempted to estimate the cost efficiency of commercial banks in India during the period 1992-2006, using Stochastic Frontier Approach and Tobit regression technique. Their results indicate that the efficiency of banks in India has decreased during the study period. However, among the three ownership groups, it is the foreign banks that appear to be relatively efficient, followed by private domestic banks. Incidentally, big banks with relatively big assets are found to be less efficient. The authors also claimed that the Frontier model results force them to conclude that cost efficiency of Indian banks is all set to increase in the future. Based on their empirical study and findings, the authors have also made certain recommendations for improving the performance of the Indian banks, which are likely to throw open new avenues for research.

In the light of the importance of banks in the national economy, Central Banks constantly monitor and measure the performance of the banks using CAMEL ratings. The authors, Manish Mittal and Aruna Dhade, have assessed the awareness level of bank employees about CAMEL rating and their efforts in improving the ratings of their respective banks, and presented their findings in the next article of the issue—"Awareness and Perception of CAMEL Rating Across Banks: Some Survey Evidence". The findings of the study reveal that there is a higher degree of awareness (83%) among public sector banks, followed by private sector banks (73%). However, there is a glitch in the study: the population sample for carrying out such a study should constitute the top management rather than employees from the operating units, for the employees at the branch level being more concerned with day-to-day operations obviously will pay least attention for management functions such as evaluation and ratings.

Small and Medium Enterprises (SMEs) are playing a significant role in providing employment in small towns of India because of which the Government of India has institutionalized credit supply to them. The authors, P Vasantha Lakshmi and M Sakthivel Murugan, of the article, "A Market Study on Bank Credit Facilities to Small and Medium Enterprises", have carried out a survey among the Chennai-based SMEs to assess the awareness among these institutions about the credit facilities offered by various banks and the difficulties faced by them in availing credit. The study reveals that most of the respondents are aware of the credit facilities being offered by banks. It is also revealed that SMEs prefer to have easy documentation, followed by low interest rates, quick response to credit requests, and long repayment schedules.

In the recent past, Internet banking has emerged as a competitive tool for banks to deliver services efficiently and effectively. In the light of these developments, the authors, Rohaya Shaari and Hafizi Muhamad Ali, have examined the perception of bank managers about strategic and operational issues underlying Internet banking and presented their findings in the last article of the issue—"Demographic Influences on Internet Banking in Malaysia". The survey reveals that Internet banking is perceived by the bankers in Malaysia as a sound strategy to increase service quality. There are, however, significant difference in bankers' perceptions about operational issues under Internet banking. It has, however, thrown open new lines of research for even among the Indian banks, for we are increasingly moving towards integration of financial services delivery leveraging on technology.

- GRK Murty
Consulting Editor