An Empirical Study on Efficient Banking System and Services: Reality or Myth

Abstract

In 1991-1992 Liberalisation has been initiated in Indian economy, and liberalization was incomplete without Globalization and Privatisation (LPG). All these initiatives have opened the doors for the private and foreign parties, who were interested in banking business. LPG has fastened the pace of growth in Indian economy, mobilizing the funds, immense infrastructure development, investment churning etc. From the customer perspective, services have been improved drastically, transaction time has been reduced, customers are empowered by technology driven banking. Earlier customers had to choose Public sector banks as an only option, to avail the banking services but after LPG there are many options to get banking services. Although private sector banks has given a intense competition to the PSU (Public sector units) banks but they joined the banking industry with a motive of profitability and wealth maximisation, a large number of complex products are introduced to meet the different requirements of the customer, but these products are not easily understood by the customers and leads to mis-selllling. In the name of the superior services, multiple and exorbitant charges are levied on the customers and erode the customer money. By arranging the modern looking facilities and maintaining physical appearance of the branch premises, higher Average balance is demanded from the customers. The services are based on the financial health of the customer. In this paper we briefly elaborate the post liberalization scenario and the bank practices with the provisions of the Customer service code 2018 (CSC, 2018) (Issued by Reserve Bank of India to take care of the customer interest by monitoring the customer services practices in banks). In this research we found that banks are lacking in providing services as per the commitments made by CSC and certain issues are raised by the customers regarding insufficiency in the services. Methodology- Structured questionnaire has been used to collect the data from private sector and public sector bank customers. So that, a representative data can be collected to draw the conclusions. Findings- In this research we found that banks are lacking in providing services as per the commitments made by CSC and certain issues are raised by the customers regarding insufficiency in the services. Practical Implication- This study provides an in-depth analysis of consumer’s problem and the level of unawareness among the customers about their rights. Hence, the apex banking authorities should take relevant steps to spread the awareness among the customer and take corrective actions, so that banking activities can be done as per the norms of customer service code. Originality- This research work is totally new in this field, researcher is able to collect only couple of studies in this field, rest are the literature is similar but not in the same field. It will add to the existing literature for further research. Keywords: Profit Motive, customer service code, Bank Practice, Customer Services