Banking Service and Customer Satisfaction

Baking in India traces its origin to as early as the Vedic period. It is popularly believed that the transition from money lending to banking must have occurred even before Manu, the great Hindu Jurist, who devoted a section of his work to deposits and advances and laid down rules relating to rates of interest. During the Mughal period, the indigenous bankers played a very important role in lending money and financing foreign trade and commerce. Later, during the rule of the East India Company, it was the turn of the agency houses to carry on the banking business. Significantly, the General Bank of India as the first Joint stock Bank to be established in the year 1786. Indian banking can be broadly categorized into nationalized banks (government owned), private banks and specialized banking institutions. The Reserve Bank of India acts as a centralised body and monitors any discrepancy in the shortcoming of the system. It is, hence, the foremost monitoring body in the Indian financial sector. The Reserve Bank of India and the government of India points out the importance of the supervision and regulation for healthy growth of the banking system in India as per Narasimham committee report of 1991. Further the policy of corporate governance for banks is aimed at protecting the interest of all stakeholders and in enhancing to professionalism in the functioning of banks. Against this backdrop, majority of the sectored banks have realized the importance of customer satisfaction as a strategic tool to survive and compete in the liberalized market. The private sector banks continue to enjoy formidable customer’s confidence, goodwill and reputation as well as friendliness that have been created significantly in the rural and semi-urban areas. The strengths of a modern-day private bank are product innovation, diversification and optimum use of Information Technology, high level of capitalization, customers focus, less Non Performing Assets and higher profit growth and a team of specialized and highly motivated personnel