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Article
Publication date: 9 November 2015

Koushiki Choudhury

The purpose of this paper is to explore how the different dimensions of service quality influence customers’ behavioural intentions in the private and public sector banks

2268

Abstract

Purpose

The purpose of this paper is to explore how the different dimensions of service quality influence customers’ behavioural intentions in the private and public sector banks, that is, in class and mass banking, respectively, and the implications for the service provider, consumer, society and consumer policy.

Design/methodology/approach

A contextually modified SERVQUAL instrument was used to capture customers’ perceptions of service quality followed by exploratory factor analysis to study the dimensionality of service quality in retail banking. Multiple regression was used to probe the influence of the dimensions of service quality on customers’ behavioural intentions.

Findings

The study revealed four dimensions of service quality in retail banking, namely, customer-orientedness, reliability, tangibles and convenience and showed that the service quality factor customer-orientedness comprising of the responsiveness and attitude of employees is most important in influencing customers’ behavioural intentions in the case of private sector banks and reliability of the service is most influential in the case of public sector banks.

Research limitations/implications

Future research can focus on “service excellence” being extended beyond assessment of the quality of services, towards evaluation of the quality of life outcomes, to which public organizations contribute, appraisal of the quality of public governance processes and quality of performance in meeting social objectives.

Practical implications

Retail bank managers must realize the importance of employees providing competent, reliable service in the case of public sector banks and their responsiveness and behaviour towards customers in the case of private sector banks, as the keys to foster a culture of service excellence.

Social implications

High-quality financial consumer policy must not only be able to increase customer satisfaction with financial services but also build security and trust in public administration through transparent processes and accountability. In this context, with public agencies being regarded as service providers and citizens as customers, the concept of quality must also visualize public agencies as catalysts of a responsible and active civic society.

Originality/value

This study explores the relationship between service quality and customers’ behavioural intentions in the private and public sector banks by linking both constructs at their dimensional level. It highlights major implications for the service provider, society, consumer and public policy based on the different needs, characteristics and requirements of customers of class and mass banking, that is, private and public sector banks.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 27 no. 5
Type: Research Article
ISSN: 1355-5855

Keywords

Article
Publication date: 13 April 2015

Poonam Gupta, Kalpana Kochhar and Sanjaya Panth

This paper aims to analyze, using the bank-level data for India from 1991-2007, the effect of financial sector liberalization on the availability of credit to the private

Abstract

Purpose

This paper aims to analyze, using the bank-level data for India from 1991-2007, the effect of financial sector liberalization on the availability of credit to the private sector. The authors specifically ask whether public and private banks deployed resources freed up by reduced state preemption to increase credit to the private sector.

Design/methodology/approach

The authors use bank-level data for India from 1991-2007 and difference in difference estimates to analyze how state ownership of banks affected the allocation of credit to the private sector post liberalization, and additionally how the size of fiscal deficit affected this allocation.

Findings

The authors find that post liberalization, public banks continued to allocate a larger share of their assets to government securities, or held more cash, than private banks. Crucially, public banks allocated more resources to hold government securities when fiscal deficit was high. The authors rule out profit maximization, need to hold safer assets or the lack of demand for private credit as the possible reasons for the preference of the public banks to hold government securities. The authors suggest that moral suasion or “laziness” is consistent with this behavior.

Originality/value

Our findings suggest that in developing countries, with fewer alternative channels of financing, government ownership of banks, combined with high fiscal deficit, may limit the gains from financial liberalization.

Details

Indian Growth and Development Review, vol. 8 no. 1
Type: Research Article
ISSN: 1753-8254

Keywords

Article
Publication date: 5 April 2013

Vinita Kaura

The purpose of this paper is to examine the effect of service quality, perceived price and fairness and service convenience on customer satisfaction. It also aims to…

4063

Abstract

Purpose

The purpose of this paper is to examine the effect of service quality, perceived price and fairness and service convenience on customer satisfaction. It also aims to compare multiple regression models between public and new private sector banks.

Design/methodology/approach

A cross‐sectional research on 445 retail banking customers through a questionnaire is conducted. The population of the study consists of valued retail urban customers of banks in Rajasthan, India, who frequently visit bank premises for transactions, have accounts in at least two banks and have availed of at least one information technology based services. Responses are analysed using regression analyses.

Findings

Dimensions of service quality are employee behavior, tangibility and information technology. Dimensions of service convenience are decision convenience, access convenience, transaction convenience, benefit convenience and post‐benefit convenience. For public sector banks, except tangibility, all antecedents have positive impact on customer satisfaction. For private sector banks except tangibility and benefit convenience all antecedents have positive impact on customer satisfaction. Significant difference in beta coefficient is found between public and private sector banks regarding employee behavior, decision convenience, access convenience and post‐benefit convenience.

Research limitations/implications

This study has taken into account a specific category of retail banking customers. Thus, it limits generalization of results to other banking populations.

Practical implications

This study highlights the importance of service quality, service convenience and price in satisfying customers. Bank managers can focus on these factors to satisfy customers.

Originality/value

The paper emphasizes the significance of service quality, price and SERVCON on customer satisfaction for Indian banking sector. It compares the multiple regression models for public and private sector banks.

Details

International Journal of Bank Marketing, vol. 31 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 11 July 2016

Sukhdev Singh, Jasvinder Sidhu, Mahesh Joshi and Monika Kansal

The purpose of this paper is to measure the intellectual capital performance of Indian banks and established a relationship between intellectual capital and return on…

2016

Abstract

Purpose

The purpose of this paper is to measure the intellectual capital performance of Indian banks and established a relationship between intellectual capital and return on assets (ROA). The paper also compared the intellectual capital performance of public sector and private sector banks.

Design/methodology/approach

This study is based on secondary data from the top 20 Indian banks. Ten banks were selected from each of the public and private sectors on the basis of paid-up equity capital. The analysis was made using the value added intellectual coefficient, the coefficient of variation, exponential growth rates, trend analysis, Yule’s coefficient, the coefficient of correlation, the F-test and the t-test.

Findings

The study revealed that private sectors have performed relatively better regarding the creation of total information coefficient (IC). However, the ROA was still below the international benchmark of > 1 percent. The major cause of the lower IC and the reduced ROA is disproportionate to the increase in capital employed and escalating non-performing assets in the Indian banking sector.

Practical implications

The study focussed on managers and identified the causes of lower performance. It proposed numerous strategies to improve the aggregate score of IC, which is closely related to bank profitability.

Originality/value

This is the first study to make a comparative analysis of intellectual capital performance in public and private sector banks in India and in addition to the traditional style of measuring sectoral performance. Further, the study employed new statistical tools, such as Yule’s coefficient of association, to establish the association between performance variables.

Details

Managerial Finance, vol. 42 no. 7
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 6 February 2017

Jacqueline Birt, Mahesh Joshi and Michael Kend

The purpose of this paper is to investigate the value relevance of segment information for both public and private sector banks in India. In doing so, this paper examines…

Abstract

Purpose

The purpose of this paper is to investigate the value relevance of segment information for both public and private sector banks in India. In doing so, this paper examines a rapidly developing economy and perhaps its most critical sector during this period of strong economic growth.

Design/methodology/approach

In this study uses the simplified Ohlson model, for a sample of 136 private sector and public sector banks for the period 2007-2010 in India.

Findings

The paper finds that public sector banks have higher share prices, higher earnings and more equity compared with private sector banks. Segment earnings data is highly value relevant for both sectors; however, segment equity data is only marginally value relevant for Indian banks. The number of segments is also value relevant and associated with higher share prices.

Originality/value

The results of this study contribute additional evidence to the literature on segment reporting by studying the effect of adoption of segment reporting in an emerging market. Findings from the paper are particularly relevant as India is currently in the process of changing its segment reporting requirements and moving to an IFRS-based segment standard.

Details

Asian Review of Accounting, vol. 25 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 14 November 2016

Prodyot Samanta and Mohinder Dugal

The aim of this paper is to assess the nature and characteristics of regulatory risk management reporting by private and public sector banks in India.

Abstract

Purpose

The aim of this paper is to assess the nature and characteristics of regulatory risk management reporting by private and public sector banks in India.

Design/methodology/approach

Using a sample of 38 banks, a content analysis of their Basel II disclosure reports for the year 2012-2013 is examined.

Findings

The assessment shows that while the majority of the disclosure across banks focuses on credit risk and capital adequacy ratios, the total quantity of disclosure varies significantly across banks. Of the three broad risk categories (market, credit and operational), operational risk disclosure is the least, with minimal to no disclosure on several key aspects of operational risk, suggesting that operational risk issues are likely to emerge as an area of concern among Indian banks. Further, for the sector as a whole, the authors observe that asset size and net income are positively correlated with the quantity of regulatory disclosure and negatively correlated with the variation of this disclosure, suggesting a possible precautionary behavior on the part of larger and more profitable banks toward excessive scrutiny by the regulators and a regulatory regime in which no institution is too big to fail.

Originality/value

As an exploratory research article to address the characteristics of regulatory disclosure of private and public sector banks in India, it is informative, particularly for those working in the area of banking regulation and compliance. Areas for further research are suggested.

Details

Journal of Financial Regulation and Compliance, vol. 24 no. 4
Type: Research Article
ISSN: 1358-1988

Keywords

Book part
Publication date: 10 November 2020

Neha Chhabra Roy and Viswanathan Thangaraj

This study gauges the profitability and performance of Indian commercial banks under the technology advancements. In this study, the authors identified three domains that…

Abstract

This study gauges the profitability and performance of Indian commercial banks under the technology advancements. In this study, the authors identified three domains that give advantage to banks due to technology incorporation, that is, increased sales revenue, reduced operating expenses, and increased employee productivity. The authors assess the effect of these domains on banks’ profitability and performance. This study is conducted for the period between the years 2003 and 2018 across 34 public and private banks for empirical analysis. The authors examined the impact of investment in technology on the profitability using panel data analysis and evaluated the long-term effect of technology investment using the vector error correction model. This study found that there is a mixed effect of technology spend on the profitability and performance of Indian banks, where private sector banks are more aggressive in technology investment as compared to the public sector banks. This study recommends an optimal technology-related strategy to gain improved productivity for the banking business, that is, planned technology reserves, customer awareness campaigns about technology-enabled products, and robust employee–customer motivation policy.

Details

Financial Issues in Emerging Economies: Special Issue Including Selected Papers from II International Conference on Economics and Finance, 2019, Bengaluru, India
Type: Book
ISBN: 978-1-83867-960-6

Keywords

Open Access
Article
Publication date: 4 August 2021

Varun Kumar Rai and Dharen Kumar Pandey

With a sample of 22 banks, this study examines the significance of the news contents about the privatization of two public sector banks in India. New information does…

3107

Abstract

Purpose

With a sample of 22 banks, this study examines the significance of the news contents about the privatization of two public sector banks in India. New information does impact the stock markets. This study provides evidence on how the privatization of public sector banks impacted the returns of the Indian banking sector.

Design/methodology/approach

This study employs the standard event study methodology with the market model for estimating the normal returns.

Findings

The statistical results indicate that while the private sector banks experienced positive average abnormal returns on the event day, the cumulative effect of the announcement is negatively significant for both private and public sector banks. The statistical results also provide evidence of information leakage, with significant results before the announcement date. The shorter event windows analysis exhibits significant positive returns in the 5-days [−2, +2] window for the private sector banks and the entire sample, signifying a positive short-term impact on the private sector banks.

Originality/value

The event study literature captures the impacts of many events. However, to the best of our knowledge, the impacts of the privatization of the Indian public sector banks have never been examined using the event study methodology. Hence, this study anticipates being the first-ever study to fill this gap and extend the available literature in finance. In addition, although we provide Indian evidence, future studies may be oriented to capture cross-country impacts.

Details

Asian Journal of Accounting Research, vol. 7 no. 1
Type: Research Article
ISSN: 2443-4175

Keywords

Article
Publication date: 4 July 2016

Justin Paul, Arun Mittal and Garima Srivastav

In today’s world, with increased competition, service quality has become one of the most popular areas of academic investigation. The purpose of this paper is to examine…

6144

Abstract

Purpose

In today’s world, with increased competition, service quality has become one of the most popular areas of academic investigation. The purpose of this paper is to examine the impact of various service quality variables on the overall satisfaction of customers and compare the private and public sector banks using a sample from India.

Design/methodology/approach

With the help of forward stepwise regression, the authors explain how a variety of variables are both negatively and positively influencing customer satisfaction. The authors collected data from 500 respondents in India; 250 of which were customers of private sector banks, and 250 of which were customers of public sector banks. The authors had a response rate of 65 percent.

Findings

In the case of private sector banks, knowledge of products, response to need, solving questions, fast service, quick connection to the right person, and efforts to reduce queuing time were found to be the factors that are positively associated with overall satisfaction. Assistance to the customer, appearance, and follow up are negatively associated with customer satisfaction. On the other hand, in the case of public sector banks, knowledge of the product and fast service are the factors which are associated positively and appearance is the only factor that is negatively associated.

Originality/value

The components of service quality that are positively associated are not the same in public sector banks as they are in private sector banks.

Details

International Journal of Bank Marketing, vol. 34 no. 5
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 5 February 2018

Ranjit Tiwari and Harishankar Vidyarthi

The purpose of this paper is to explore and explain the linkage between intellectual capital (IC) efficiency of banks and their performance.

Abstract

Purpose

The purpose of this paper is to explore and explain the linkage between intellectual capital (IC) efficiency of banks and their performance.

Design/methodology/approach

In total, 39 public and private banks listed in Bombay Stock Exchange from 1999 to 2015 were considered for the study. Panel fixed effects technique is used to draw inferences.

Findings

Results of the study provide evidence of positive association between IC and performance of banks; however, only human capital and structural capital have shown instances of significant positive linkage with banks performance. The results also indicate that the IC efficiency of private sector banks is better than public sector banks in India.

Practical implications

This study may enable Indian banking firms to measure their IC efficiency and develop policies to promote and improve upon their intellectual potential to enhance banks performance.

Originality/value

It is a novel study in Indian context that considers interaction variables in extending the prior understanding of the role of IC in enhancing banks performance, which may build sustainable advantage for banks in emerging economies like India.

Details

Journal of Accounting in Emerging Economies, vol. 8 no. 1
Type: Research Article
ISSN: 2042-1168

Keywords

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