The banking sector in India has made remarkable progress since the economic reforms in 1991. New private sector banks have brought the necessary competition into the industry and spearheaded the changes towards higher utilization of technology, improved customer service and innovative products. Customers are now becoming increasingly conscious of their rights and are demanding more than ever before. The recent trends show that most banks are shifting from a product-centric model to a customer-centric model as customer satisfaction has become one of the major determinants of business growth. In this context, prioritization of preferences and close monitoring of customer satisfaction have become essential for banks. Keeping these in mind, an attempt has been made in this study to analyze the factors that are essential in influencing the investment decision of the customers of the public sector banks. For this purpose, Factor Analysis, which is the most appropriate multivariate technique, has been used to identify the groups of determinants. Factor analysis identifies common dimensions of factors from the observed variables that link together the seemingly unrelated variables and provides insight into the underlying structure of the data. Secondly, this study also suggests some measures to formulate marketing strategies to lure customers towards banks.
The world order is undergoing significant changes. The winds of liberalization have opened up new
vistas in the banking industry. As a result, it generated intensely competitive environment. New ideas
and new economic thinking dominate the world today. Banking and financial services form the core of
the economic system of a country. The banking area has been almost flooded with new entrants
including private banks, foreign banks, non-banking finance companies, the merchant bankers, chit
funds, etc. The three major subgroups, the public sector, the private sector and foreign banks have
posted impressive increases in various broad parameters. The total income of the nationalized banks
increased by 7.7% compared to 2002-2003. Private sector banks have recorded a growth of 9.81% in
their total income while foreign banks increased it by 9.41% over the last financial year. Public sector
banks have registered a marginal downfall of 1.05% in their interest income. On the other hand, the
non-interest income in the case of public sector banks, has registered an increase of 14.05%. The
share of public sector banks in the deposits pie declined from 78 to 76% even as that of the private
sector banks increased from 16 to 18%. So, the competition is tough. Better service quality, innovative
products, better bargains are all greeting the Indian customers. |
