INTORODUCTION
Indian Banking System
Structured Banking system in India was developed through past few centuries. Bank of Hindustan wasthe first bank established in India, in 1770, by European management at Culcutta. From that time onwards, the British East India Company had set up various banks to support their expansion plans in India. They established three presidency Banks- Bank of Culcutta, which was renamed later as Bank of Bengal in 1806, Bank of Bombay in 1840 and Bank of Madras in 1843. These presidency Banks were amalgamated to form Imperial Bank of India in 1921. In 1955, Imperial Bank of India was nationalised and renamed as State Bank of India.
The presidency Banks and later the Imperial Bank of India were functioning as Central Bank of the 1country. Reserve Bank of India (RBI) was established in 1935, with the RBI Act 1934, and had taken over the functions of the Central Bank.
Banking sector reforms had started immediately after independence with nationalisation of Imperial Bank of India. Nationalisation of Banks was the revolutionary step undertaken by the Government towards taking Banking to the mass. Seven subsidiaries of Sate Bank of India were nationalized via the Stat Bank of India (Subsidiary Banks) Act 1959. Fourteen major commercial banks were nationalized In 1969. This was followed by second phase of nationalization in 1980 with 6 more banks nationalized. The nationalization of Banks had given enhanced trust for the common people in the Banking system as the major shareholder of he banks was the Government of India.
In 1991, the era of financial Liberalization, Privatization and Globalization (LPG) was embarked and banking sector was an integral part of this revolution. The changes got momentum with recommendations of Chakravarthy committee (1985), Vaghul Committee (1987), and Narasimham Committee (1991). The liberalised norms for private bank licences had opened a sea of competition in the banking sector. Recently, Reserve Bank of India had given in principal approval for 11 Payment banks and 10 small finance banks to start operations.
The changes in the banking sector from the liberalisation era are visible from the following table showing particulars of Scheduled Commercial Banks in India:
YEAR
2009 2014
No of Banks 170 151
No.of branches 80547 117280
Deposits (in crore) 3834100 7913400
Advances 2775500 6139000
As can be seen the business of the Scheduled Commercial Banks have increased manifold during the past two decades. This causes opportunities as well as challenges for the Banks.
Customer Expectations With numerous banking choices at his/her disposal for a customer to select, he/she is at the winning end as far as the choice of a bank is concerned. In India, since, there are different segments of banks- Co-operative Banks , Regional Rural Banks, Old generation Private Banks, New Generation Private Banks, State Bank of India and Associate Banks and Nationalised Banks have offered a large array of choices to select from. This has caused intense competition among the operating banks.
The liberalisation has changed the face of banking in India with Computerised work environment, plastic money, technology laden products like ATM, Internet banking, SMS banking, electronic fund transfers, core banking and inter bank banking and so on. The existing banks too set on a branch network expansion and automation.
These options have left the customers with a wide range of banks to select. What helps him in this selection? A range of functions apart from the traditional functions of receiving deposits and lending loans- a basket of tech savvy products, which enable the customer to bank even without being present in a bank! Any and every transaction like travel, entertainment is now possible any time by access to one’s bank account, from anywhere, anytime. The flagship tech product, the ATM is accessible by any and everyone, less educated and even illiterate with biometric ATMs. When technology and competition go hand in hand, how customers select their bank and what is/are his/her priority areas for such selection. Whether it is branch networking, access, brand value, cost of service like remittance charges and processing charges, forex facilities, rate of interest, as well as deposit rate, ambience, staff attitude and knowledge or dependability ? This study will focus on the aspects of such priorities by the customers.
The state of Kerala and especially the financial centre of Kerala, Ernakulam metropolitan area has become an active centre of Banks including those of foreign origin. As per statistics available as on 31/03/2012, there are 832 bank branches in the district with a deposit base of Rs.40465.00 crore.
The present studies have mainly focused on the concerned Bank’s point of views of customer service and customer ecstasy. However, the customers are rarely approached for an unbiased opinion or expressing their actual expectations from their Banks. That’s a reason, why although there are numerous hi-tech Banks operate, the number of dissatisfied customer are also on the rise. This study will concentrate the niche retail customers in Ernakulam metropolitan area to find out variables affecting the core issues of dependable banking for customers.