20161203

Comparative Study of Public and Private Sector Banks

Chapter 6
       A Comparative Study of Public and Private Sector Banks




















Customers' Perception on E-Banking Services
Introduction
In India, Commercial banks are providing electronic services for their customers for few decades. In electronic channel, ATM, mobile, internet and phone banking are the major services. The main aims of these services are to reduce the cost, speedy transactions and paper less work for both bankers and customer's side. Under these services commercial banks are offering various facilities like balance checking, cash withdrawal, mini statement, utility bills payments, fund transfer etc. In the present scenario banks are providing compulsory ATM cum debit cards for their customers and also they can avail mobile, internet and phone banking channels according to their willingness. Therefore, the researcher intended to know the level of awareness, factors influencing and level of satisfaction of customers on E-Banking services.
In this chapter an attempt has been made to analysis of data and information collected for the study to expose the customers' perception on E-Banking services. The data has been collected through structured interview schedule which is designed to seven segments. Part one consists of demographic profile, part two contains banking details of customers, part three contains awareness level of core banking system and E-Banking channels, part four contains ATM banking services, part five contains mobile banking services, part six contains internet banking services and part seven contains phone banking services. Percentage analysis is applied to know the personal profile and bank details of customers. One sample T-test is used to identify the level of awareness, factors influencing and level of satisfaction on customers. Factor Analysis by principal component method is brought to bear on the customers' perception on identifying the predominant factors of ATM, mobile banking, internet banking and phone banking channels. One way analysis of variance is applied to know the factors influencing the customers on E-Banking services. Cluster Analysis is used to classify the customers of E-Banking users with various heterogeneous groups which are homogenous within them. A non parametric Chi-Square test is used to identify the association between various clusters of customers with respect to elements of ATM, mobile banking, internet banking and phone banking.

Demographic Profile and Banking Details of Customers
The demographic profile of the customer is closely associated with banking transactions. The banking transactions are differing from customer to customer. Therefore, it is important to study about the customers' demographic profile. The present study considers place of living, gender, age, educational qualification, occupation, marital status, income, type of family, number of family members, type of account, more than one account in another bank, duration of having account with commercial banks, purpose for having account with commercial banks, frequency of visiting branch and source of information of knowing E-Banking facilities in commercial bank, usage of ATM facility, frequency usage of ATM facility, usage of mobile banking facility, frequency usage of mobile banking facility, usage of internet banking facility, frequency usage of internet banking facility, usage of phone banking facility and frequency usage of phone banking facility. In this juncture, the researcher applied percentage analysis to ascertain the socio-economic profile of the customers.
Place of Living wise Categorization  
Rajasthan contains urban, semi-urban and rural areas. Commercial banks are spread in ten corporations of Rajasthan. Customers are divided into three categories on the basis of the place of living viz., (a) Urban, (b) Semi- Urban and (c) Rural. The following table reveals the distribution of customers by their place of living around E-Banking facility provided by the commercial bank.
Table No. 4.1
Place of Living wise Categorization
Place of Living
Number of Respondents
Percentage (%)
Urban
364
48.50
Semi- Urban
277
37.00
Rural
109
14.50
Total
750
100.00
Source: Primary Data
From the above table, it is found that the maximum of 48.50 % of customers are living in urban places followed by 37.00 % of customers in the semi urban. A minimum of 14.50 % of customers are living in rural area.
Gender wise Categorization
In a tradition bound society, men have to earn and women have to manage the family and also save money. But the modem trend is that both husband and wife want to be employed in order to earn and live comfortably. Normally, the attitude and interest will differ from male to female. Hence, customers are classified into two categories viz., (a) Male and (b) Female.
The following table exhibits that the distribution of customers by their gender about E-Banking facilities provided by commercial bank.
Table No. 4.2
Gender wise Categorization
Gender
Number of Respondents
Percentage (%)
Male
524
69.90
Female
216
28.80
Transgender
10
1.30
Total
750
100.00
Source: Primary Data
The above table expresses that the maximum of 69.90 % of customers are male and followed by 28.80 % of female customers. A minimum of 1.30 % is represented by the Trans gender.
Age wise Categorization  
Age is an important factor to decide the satisfaction level as well as convenience of the banking services. In present study the researcher considered the age groups (a) up to 30 (b) 31 to 40 (c) 41 to 50 and (d) above 51.
The following table reveals the distribution of customers by their age E-Banking provided by commercial bank.
Table No. 4.3
Age wise Categorization
Age
Number of Respondents
Percentage (%)
Up to 30
198
26.40
31 to 40
313
41.70
41 to 50
176
23.50
Above 50
63
8.40
Total
750
100.00
Source: Primary Data
Educational Qualification wise Categorization  
The above table indicates that a maximum of 41.70 % of customers are in the age group 31 to 40, followed by 26.40 % of customers in the age group 30, 23.50 % of customers are in the age group 41 to 50. A minimum of 8.40 % customers are in the age group above 51.
Education is one of the important factors to ascertain the wisdom of an individual. Any new schemes introduced by the government can reach the right person only. Educated people visit a number of places; work in many organizations and the read many newspapers, advertisement, etc. In the present research study, the researcher has considered the educational qualification namely (a) Illiterate, (b) school level, (c) U.G, (d) P.G, (e) Professional and (f) Others.
The following table reveals that the distribution of customers by their educational qualification who are involved in E-Banking.


Table No. 4.4
Educational Qualification wise Categorization
Education
Number of Respondents
Percentage (%)
Illiterate
21
2.80
School level
103
13.70
U.G
197
26.30
P.G
263
35.10
Professional
136
18.10
Others
30
4.00
Total
750
100.00
Source: Primary Data
From the above table, it is clear that the maximum of 35.10 % of customers are post graduates followed by 26.30 % of graduate customers, 18.10 % is represented by the professional customers, 13.70 % customers educated up to the school level, 4.00 % is represented by the customers with other qualifications and a minimum of 2.80 % are illiterate customers.
Occupation wise Categorization  
Occupation is one of the important factors which influence the level of satisfaction of an individual. Now-a- days, most of the employees are drawing their salary through the bank and they do not find time to go to bank during working hours. Therefore, they may wish to have E-Banking facility. In the present study, the researcher considered different occupation namely, (a) Government employee (b) Private employee (c) Farmer (d) Business (e) Professional (f) Student and (g) Others.
The following table reveals the distribution of customers by their occupation who is involved in E-Banking provided by commercial banks.


Table No. 4.5
Occupation wise Categorization
Occupation
Number of Respondents
Percentage (%)
Govt employee
154
20.50
Private employee
253
33.70
Farmer
26
3.50
Business
131
17.50
Professional
110
14.70
Student
44
5.90
Others
32
4.20
Total
750
100.00
Source: Primary Data
From the above table, it expresses that maximum of 33.70 % of customers are working in private enterprises followed by 20.50 % of customers in the government offices, 17.50 % is represented by the customer who are businessmen, while 14.70 %is represented by the customers who are professionals, 5.90 % is represented by the customers are students. 4.20 % of customers in the others occupations. A minimum of 3.50 % is represented by farmers.
Marital Status wise Categorization  
Marital status establishes the rights and obligations between spouse, children and family members. Hence, in the present study, the researcher considered marital status namely (a) Married and (b) Unmarried.
The following table reveals the distribution of customers by their marital status among E-Banking customers.



Table No. 4.6
Marital Status wise Categorization
Marital Status
Number of Respondents
Percentage (%)
Married
482
64.30
Unmarried
268
35.70
Total
750
100.00
Source: Primary Data
From the above table, it is identified that maximum of 64.30 % of customers married and 35.70 % are unmarried.
Family Income wise Categorization  
Income is the most important factor that enables a person to determine to open an account in the bank, when the income increases, their needs and wants also increases. In the present study, the researcher considers family income namely (a) Up to Rs.10, 000 (b) RS.10, 001 to Rs.20, 000 (c) Rs. 20,001 to RS.30, 000 and (d) Above Rs.50, 000.  The following table reveals the distribution of customers by their family income among E-Banking customers.
Table No 4.7
Family Income wise Categorization
Family Income
Number of Respondents
Percentage (%)
Not earn Income
41
5.50
U to RS.1 0000
178
23.70
RS.1 0001 to RS.20000
312
41.60
RS.20001 to RS.30000
155
20.70
Above RS.50000
64
8.50
Total
750
100.00
Source: Primary Data
It has been extracted from the above table that maximum of 41.60 % of customers' family income is Rs. 10001 1 to Rs.2000, followed by 23.70 % from the respondents family income is up to Rs.10, 000, 20.70 % of the customers family income is Rs.20, 001 to Rs.30, 000, 8.50 % the customers family income is above Rs.50, 000. A minimum of 5.50 % is represented by customers who do not have any source of income.
Type of Family wise Categorization  
The family composition in India is generally, based on an undivided joint family system. When literacy increases, the members of a family pursue different jobs in different parts of the country or the start their own business in various places which leads to nuclear families. For the purpose of this study, the types of family are consider two heads viz., (a) Joint family and (b) Nuclear family.
The following table reveals the distribution of customers by their type of family involved in E-Banking.
Table No. 4.8
Type of Family wise Categorization
Type of Family
Number of Respondents
Percentage (%)
Joint
410
54.70
Nuclear
340
45.30
Total
750
100.00
Source: Primary Data
It is clear from the above table that maximum of 54.70 % of customers are joint families and a minimum of 45.30 % are from nuclear family.
Family Size wise Categorization  
Number of members in the family is an important factor that determines the level of awareness about E-Banking. When the family has more number of members, there is a possibility to interact often. At the same time, information can be shared by each other. Customers are classified into three categories on the basis of number of members in the family viz., (a) Below 3 (b) 4 to 6 and (c) Above 7.
The following table reveals the distribution of customers by their number of family members among E-Banking customers.
Table No. 4.9
Family Size wise Categorization
Family Size
Number of Respondents
Percentage (%)
Below 3
274
36.50
4 to 6
376
50.10
Above 7
100
13.30
Total
750
100.00
Source: Primary Data
The above table expresses that maximum of 50.10 % of customers are from the family consisting of 4 to 6 members, followed by 36.50 %customers are from the family size of below 3. A minimum of 13.30 %is represented by number of family members above 7.
Type of Account wise Categorization  
Customers are having different types of account based on their source of income. Based on the types of accounts they are classified into three groups viz., (a) savings account (b) Current account and (c) Both.
The following table exhibits the 'data of customers are having various types of account with commercial banks.



Table No. 4.10
Type of Account wise Categorization
Types of Account
Number of Respondents
Percentage (%)
Savings Bank Account
453
60.40
Current Account
162
21.60
Both
135
18.00
Total
750
100.00
Source: Primary Data
From the above table, it shows that 60.40 % of customers are having savings bank account, 21.60 % of customers are having current account and only 18.00 % of customers are the holders of both accounts.
More than one Account in another Bank wise Categorization  
The following table displays the information about customers regarding more one account for which they are having account with another bank including public sector, private sector and foreign banks. They are classified into two group’s viz., (a) Yes and (b) No.
Table No. 4.11
More than one Account in another Bank wise Categorization
More than one
Number of
Percentage
Account
Respondents
(%)
Yes
414
55.20
No
336
44.80
Total
750
100.00
Source: Primary Data
From the above table, it indicates that 55.20 % of customers are having accounts in other bank and only 44.80 % of customers are not having other bank accounts.

Duration of having Account wise Categorization  
The following table shows that information about regarding the duration of holding accounts by customers in commercial banks. The duration is classified into four group’s viz., (a) Up to 1 year (b) 2 to 3 years (c) 4 to 6 years and (d) Above 6 years.
Table No. 4.12
Duration of having Account wise Categorization
Duration of having
Number of
Percentage
Account
Respondents
(%)
Up to 1 year
120
16.10
2 to 3 years
315
42.10
4 to 6 years
168
22.40
Above 6 years
147
19.60
Total
750
100.00
Source: Primary Data
The above table highlights that 42.10 % of customers are operating their account between the period 2 to 3 years, 22.40 % of customers are operating their account between the periods of 4 to 6 years, 19.60 % of customers are operating their account for more than 6 years and only 16.10 % of customers are operating their account within 1 year.
Purpose for having Account wise Categorization  
The following table displays the information about customers regarding the purpose for which they are having account with commercial banks. The purpose is classified into five group’s viz., (a) Personal (b) Business (c) Professional (d) All and (e) Others.



Table No. 4.13
Purpose for having Account wise Categorization
Purpose
Number of Respondents
Percentage (%)
Personal
327
43.60
Business
172
22.90
Professional
111
14.80
All
109
14.50
Others
31
4.10
Total
750
100.00
Source: Primary Data
The above table shows that 43.60 % of customers are having bank account for their personal purpose, 22.90 % of customers are having bank account for their business purpose, 14.80 % of customers are having bank account for their professional purpose, 14.50 % of customers are having bank account for general purpose and only 4.10 % of customers are having bank account for other purposes.
Frequency of Visiting Branch wise Categorization  
The following table reveals data regarding the frequency of customers to visiting branches. The frequency is classified into four group’s viz., (a) Daily, (b) weekly (c) Monthly and (d) Rarely.
Table No. 4.14
Frequency of Visiting Branch wise Categorization

Frequency
Number of Respondents
Percentage (%)
Daily
88
11.70
Weekly
312
41.60
Monthly
133
17.70
Rarely
133
17.70
Total
750
100.00
Source: Primary Data
From the above table, it is depicted that a maximum of 41.60 % of customers visit the branch weekly once, 17.70 % of customers visit the branch monthly once and rarely and a minimum of 11.70 % of customers visit the branch daily.
Source of Information of knowing E-Banking Facilities wise Categorization  
The following table displays information about customers regarding the sources of information which promoted them to know about E- Banking facility in commercial banks. The source is classified into six groups’ viz.; (a) By own interest (b) Internet (c) News paper magazine (d) Television and Radio (e) Bank staff (f) Friends and Relatives.
Table No. 4.15
Source of Information of knowing E-Banking Facilities wise Categorization
Sources
Number of Respondents
Percentage (%)
By own Interest
143
19.10
Internet
202
26.90
News paper Magazine
80
10.70
T.V and Radio
77
10.30
Bank staff
198
26.40
Friends and Relatives
50
6.70
Total
750
100.00
Source: Primary Data
The table shows that 26.90 % of customers have come to know out E-Banking through internet, 26.40 % of customers have come to mow about E-Banking through bank staff, 19.10 % of customers know out E-Banking by own interest, 10.70 % of customers have come to know about E-Banking through news papers and magazine, 10.30 % of customers know about E-Banking through Television and Radio and only 6.70 % customers have come to know about E-Banking through friends and relatives.

Usage of ATM Facility wise Categorization  
The following table displays the information about customers regarding the -age of ATM facility provided by commercial banks. The period of usage is classified into three group’s viz., (a) Up to 2 years (b) 3 to 5 years and (c) Above 5 years.
Table No. 4.16
Usage of ATM Facility wise Categorization
Usage
Number of Respondents
Percentage (%)
Less than 2 years
271
36.10
3 to 5 years
332
44.30
Above 5 years
147
19.60
Total
750
100.00
Source: Primary Data
The above table shows that 44.30 % of customers are using ATM facility less than 2 years, 36.10 % of customers are using the ATM for the past 3 to 5 years and 19.60 % of customers are using ATM for more than 6 years.
Frequency usage of ATM Facility wise Categorization  
The following table shows that the information about customers regarding the frequency of ATM facility. The frequency is classified into six groups viz.
(a) Daily
(b) Once in a week
(c) Once in a month
(d) Occasionally
(e) During urgency and
(f) When need occurs.
Table No. 4.17
Frequency usage of ATM Facility wise Categorization
Frequency of ATM Facilities
Number of Respondents
Percentage (%)
Daily
52
6.90
Once in a week
201
26.80
Once in a month
147
19.60
Occasional
112
14.90
During urgency
129
17.20
When need occurs
109
14.50
Total
750
100.00
 Source: Primary Data
From the above table, it is clear that 26.80 % of customers use ATM ices once in a week, 19.60 % of customers use it once in a month, 17.20 cent of customers use ATM services during emergencies, 14.90 % of customers use ATM services occasionally, 14.50 % of customers use ATM services when need occurs and only 6.90 % of customers use ATM services
Usage of Mobile Banking Facility wise Categorization  
The following table displays the information about customers regarding the usage of Mobile banking facility provided by commercial banks. The period of usage is classified into four groups viz.
(a) Not usage
(b) Up to 6 months
(c) Up to 9 months and
(d) Above 1 year

Table No 4.18
Usage of Mobile Banking Facility wise Categorization
Usage
Number of Respondents
Percentage (%)
Not usage
91
12.10
Less than 6 months
398
53.10
Up to 1 year
202
26.90
Above 1 year
59
7.90
Total
750
100.00
Source: Primary Data
From the above table, it is found that that 53.10 % of customers are using mobile banking services less than 6 months, 26.90 % of customers are using for the past up to 1 year, 12.10 % of customers are not usage of mobile banking services and 7.90 % of customers are using for more than one year.
Frequency of Mobile Banking Facility wise Categorization  
The following table shows that the information about customers regarding the frequency of mobile banking facility. The frequency is classified into seven groups viz.
(a) Not usage
(b) Daily
(c) Once in a week
(d) Once in a month
(e) Occasionally
(f) During need and
(g) When need occurs.
Table No. 4.19
Frequency of Mobile Banking Facility Wise Categorization
Frequency of Mobile Banking Facility
Number of Respondents
Percentage (%)
Not usage
91
12.10
Daily
36
4.80
Once in a week
138
18.40
Once in a month
122
16.30
Occasionally
127
16.90
During urgency
133
17.70
When need occurs
103
13.70
Total
750
100.00
Source: Primary Data
From the above table, it shows that 18.40 % of customers are using mobile banking services once in a week, 17.70 % of customers are using mobile banking services emergency, 16.90 % of customers are using mobile banking services occasionally, 16.30 % of customers are using mobile banking services once in a month, 13.70 % of customers are using mobile banking services when need occurs, 12.10 % of customers are not using mobile banking services and only 4.80 % of customers are using mobile banking services daily.
Usage of Internet Banking Facility wise Categorization  
The following table displays the information about customers regarding the usage of internet banking facility provided by commercial banks. The period of usage is classified into four groups viz.
(a) Not usage
(b) Up to 2 years
(c) 3 to 5 years and
(d) Above 5 years.
Table No. 4.20
Usage of Internet Banking Facility wise Categorization
Usage
Number of Respondents
Percentage (%)
Not usage
98
               13.10            332                                  44.30                                     262                                  34.90                                       58                                      7.7
Up to 2 years
332
44.30
3 to 5 years
262
34.90
Above 5 years
58
7.70
Total
750
100.00
 Source: Primary data 
The above table shows that 44.30 % of customers are using internet banking facility up to 2 years, 34.90 % of customers use for the past 3 to 5 years, 13.10 % of customers not use internet banking facility and 7.70 %f customers use internet banking facility for more than 5 years.
Frequency of Internet Banking Facility wise Categorization  
The following table shows that the information about customers regarding the frequency of internet banking facility. The frequency is classified into seven groups viz.
(a) Not usage
(b) Daily
(c) Once in a week
(d) Once in a month
(e) Occasionally
(f) During urgency and
(g) When need occurs.
Table No. 4.21
Frequency of Internet Banking Facility wise Categorization
Frequency of Internet Banking Facility
Number of Respondents
Percentage (%)
Not usage
98
13.10
Daily
36
4.80
Once in a week
131
17.50
Once in a month
90
12.00
Occasionally
149
19.90
During urgency
143
19.10
When need occurs
103
13.70
Total
750
100.00


Source: Primary data
From the above table, it is clear that 19.90 % of customers are using internet banking services occasionally, 19.10 % of customers are using internet banking services during urgency, 17.50 % of customers are using internet banking services once in a week, 13.10 % of customers are not using internet banking services, 12.00 % of customers are using internet banking services once in a month and 4.80 % of customers are using internet banking services daily.
Usage of Phone Banking Facility wise Categorization  
The following table displays the information about customers regarding the sage of phone banking services facility provided by commercial banks. The period of usage is classified into four group’s viz., (a) Not usage (b) up to 2 years (c) 3 to 5 years and (d) Above 5 years.


Table No. 4.22
Usage of Phone Banking Facility wise Categorization
Usage
Number of Respondents
Percentage (%)
Not usage
112
14.90
Up to 2 years
343
45.70
3 to 5 years
235
31.30
Above 5 years
60
8.00
Total
750
100.00
 Source: Primary data
The above table shows that 45.70 % of customers are using phone banking services Up to 2 years, 31.30 % of customers are using for the past 3 to 5 years, 14.90 % of customers are not using of phone banking services and 8.00 % of customers are using phone banking services for more than 5 years.
Frequency of Phone Banking Services wise Categorization  
The following table shows that the information about customers regarding the frequency of phone banking services facility. The frequency is classified into seven groups viz.
(a) Not usage
(b) Daily
(c) Once in a week
(d) Once in a month
(e) Occasionally
(t) During urgency and
(g) When need occurs.

Table No. 4.23
Frequency of Phone Banking Services wise Categorization
Frequency of Phone Banking Facility
Number of Respondents
Percentage (%)
Not usage
112
14.90
Daily
14
1.90
Once in a week
89
11.90
Once in a month
129
17.20
Occasionally
111
14.80
During urgency
165
22.00
When need occurs
130
17.30
Total
750
100.00

Source: Primary data
From the above table it is clear that 22.00 % of customers are using hone banking services during urgency, 17.30 % of customers are using hone banking services when need occurs, 17.20 % of customers are using hone banking services once in a month, 14.90 % of customers are not using hone banking services, 14.80 % of customers are using phone banking services occasionally, 11.90 % of customers are using phone banking services once in a week and 1.90 % of customers are using phone banking services daily.
The percentage analyses elucidate the demographic profile and banking details of customers of commercial banks. All the questions posed to customers in optional type. The question options and contribution of the sample. Units are explained in simple percentage. Besides these optional type questions the Likert's five point scale has been used to analyze the opinion of customers about core banking system. Therefore, in this juncture the parametric one sample T-test is applied to ascertain the opinion of customers on perception of core banking system.

Customers' Opinion on Core Banking System
E-Banking channels are functioning through core banking system. In core banking system, a bank connects all the branches under single server. This system facilitates to perform transactions anywhere and any branch banking for the customers. Therefore, awareness on core banking system is essential for customers. The researcher ascertained the response on core banking system through five statements using deposit processing system, loan accounting system, customer information system, and general ledger and reporting tools. The customers expressed their opinion in Likert's five point scale which ranges from strongly agree to strongly disagree. In this juncture a parametric one sample T-test is applied to know the opinion of customers on E-Banking services and the following results were obtained.
Table No. 4.24
One Sample Statistics for the Level of Awareness on Core Banking System
Particulars
N
Mean
Std.
Deviation
Std. Error
Mean
Deposit processing system
750
3.01
2.060
0.75
Loan accounting system
750
3.95
2.044
0.75
Customer information system
750
3.92
2.013
0.74
General ledger
750
3.84
1.971
0.72
Reporting tools
750
3.79
1.884
0.69
The above table indicated that the mean values of core banking variables ranges from 1.79 to 2.01 and standard deviation varied from 1.884 to 2.060 respectively. This leads to the computation of one sample T-test statistics as allows.


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