Customer Retention Management (CRM) is perceived as a technique of banking companies to explore, retain and also increase the loyal customers in the competitive business era. This paper attempts to study the customers’ perspectives on CRM practices of commercial banks in India. A sample of 421 respondents from both public and private sector banks of Sivagangai district in Tamil Nadu was selected for the study. The study reveals that customers’ perception of CRM in banks does not vary with customers’ age, sex, education, occupation, income level, the bank in which customers have an account, type of account maintained, and the period of customers’ association with banks. The validity of the results have been tested statistically by applying techniques such as ANOVA, t-test and discriminant function analysis.

The Indian banking industry, which was operating in a bureaucratic style prior to 1991, had to undergo large-scale transformation with the opening up of the economy. The sector has been facing unprecedented challenges with the wave of liberalization, privatization and globalization of the Indian economy. The banks in India are under intense pressure in today’s volatile marketplace. Steep competition, globalization, growing customer/consumer demand and exposure to high credit risks are forcing the banks to find new ways for improving profitability. On the other hand, cost-cutting measures have forced banks to manage operations with a few customer relationship managers and product specialists. Industry consolidation also poses fresh challenges to this sector. The search for new strategies began to meet not only the high expectations of customers but also helped in retaining them. The competitive world has witnessed many banks participating in the race to optimize their profits. The banking sectors are implementing new innovative technology, and using it, a customer can accesses his requirement. Hence, all banks are for the adoption of advanced-centric approach to customer-centric approach. In such a scenario, the services have grown rapidly and the customer has been more often a purchaser of services rather than products. These changes are compelling banks to reorganize themselves to cope with the present conditions.

Though the banks are very keen on providing customer retention practices to satisfy the customers and retain them, customers’ satisfaction or at the least their expectations towards these practices is not known. A study of the perception of the customers towards the banks’ customer retention practices is essential to gain adequate information to satisfy customers further, retain them and provide continuous opportunities to suggest banks in the application of Customer Retention Management (CRM), etc. Hence, the present study tries to find out the perception level of the customers on CRM of the public and private sector commercial bank branches.