SERVICES OFFERED BY PUBLIC AND PRIVATE SECTOR BANKS - CUSTOMERS AWARENESS IN TIRUPUR DISTRICT

SERVICES OFFERED BY PUBLIC AND PRIVATE SECTOR BANKS - CUSTOMERS AWARENESS IN TIRUPUR DISTRICT V.Dhavamani, Research Scholar, PG and Research Department of commerce, Government Arts College, Udumalpet. Tamil nadu, India. DR S.Sivagnanam, Assistant Professor of Commerce, Department of commerce, Government Arts College, Autonomous, Coimbatore, Tamil Nadu, India. ABSTRACT The empirical study aims to identify the factors that determine the customers level of awareness towards various services offered by the public and private sector bank functioning in in Tirupur district.a sample of 420 banks customers were chose from the four public sector banks and three private sector banks functioning in Tirupur district.the study observed that the sample consumers have exhibited higher degree of awareness towards various banking services offered by the public sector in Tirupur region in comparison to the services offered by the private sector banks. Further, the study has observed that the sample customers possess adequate knowledge on the services: agency services, credit card /debit card facility, teller facility, e banking, interest rate option/fixed and floating rate on loan, electronic clearance system, over draft, rate of interest on various deposits, insurance product, jewel loan, vehicle loan, educational loan, NRI deposit, ATM facility, ombudsman scheme, online banking, electronic fund transfer, personal loan and net banking services offered by the banks operating in India. Thus, it is suggested to the private sector banks to start focusing on servicing the banking service need of customers living in tier III cities and its surrounding semi-urban or rural region, like Tirupur District. As these days technology is considered as the easy mode of reaching customers in any remote login area, private sector banks have to efficiently use internet and mobile base 3G or 4G technologies to reach their clients and spread knowledge about their banking functions. Introduction The banking sector is the life line of Indian modern economy. are one of the oldest financial intermediaries of Indian financial system. The banking sector is very dominant in India as it accounts for more than half of the assets of the financial sector. They play an important role in the mobilisation of deposits and disbursement of credit to various sector of the economy. The banking sector reflects the financial and economic health of the country. Since independence of Indian economy in 1947, the banking service was offered as facility provider to customers to protect their saving in the most effective mode. were never concentrated on profit as a business but with the changing time and with the highly growing economic condition the role of banking is also been changed instead of only Facility provider it has also become a profit maker with new attractive face. If, rightly said since liberalisation of Indian economy the banking industry has experiences several changes. The inflow of foreign banks, emerging of private sector banks has become a big competition for the financial institutions and banking sector in India. The traditional banking has changed to new banking products and services banking. Customer Service is the primary motto of the banker. In the present scenario, major task of banks are to satisfy their customer s financial needs. To attract the customers banking products and services are customised like: deposits, loans, mobile banking, online banking, ATMs, credit cards, foreign exchange, etc. Similarly, to beat the rising competitive from the entry of new generation banks various marketing strategic plans are drafted by the domestic public and private sector banks to stay ahead of the competition in term of effective branding and image building process. This change in banking practices is the outcome of the bankers realisation of the fact that customer service is not only a critical function but is also becoming a key posture for the banking business. Moreover, it is true 60

that the commercial banks purvey offer financial services and therefore, they have to keep in view the service orientation while taking any management decision. In all management decisions, the commercial banks have to place an overriding emphasis on the interests of their customers. The banks goal of satisfying their customers and retaining them for long period would be possible only if the customers have gained greater awareness towards the various services offered by the bank. This study aims to analyse the customers level of awareness towards various services offered by the public and private sector banks in Tirupur district of Tamil Nadu Statement of Problem As stated above since the liberalisation of Indian economy in 1991, the service industry is attaining greater importance compared to manufacturing industry, banking has evolved as a prime sector providing financial services to growing needs of the economy. Banking industry has undergone a paradigm shift from just providing ordinary banking services in the past to easy provider of complicated and crucial services like: merchant banking, housing finance, bill discounting etc. The Indian banking sector has become more active with the entry of new players like private and foreign banks. It has also evolved as a prime builder of the economy by understanding the needs of the same and encouraging the development by way of giving loans, providing infrastructure facilities and financing activities for the promotion of entrepreneurs and other business establishments. For a fast developing economy of India, presence of a sound financial system to mobilise and allocates savings of the public towards productive activities is necessary. The scheduled commercial banks play a crucial role in this regard. The banking sector in recent years has incorporated new products in their businesses, which are helpful for its growth. The banks have started to provide fee-based services like, treasury operations, managing derivatives, options and futures, acting as bankers to the industry during the public offering, providing consultancy services, acting as an intermediary between two-business entities etc. At the same time, the banks are reaching out to other end of customer requirements like: insurance premium payment, tax payment etc. It has changed itself from transaction type of banking into relationship banking, where customers find friendly and quick service suited to their need and on-time demand. All the services offered by the banks can be efficiently managed and reframed with more innovations only when the customers of the banks have a greater degree of awareness. Based on the above discussion this study aims to analyse the customers awareness towards the banking services offered by public and private sector banks in Tirupur district of Tamil Nadu. Objectives of the Study To study the demographic and socio-economic status of public and private sector bank customers hailing in Tirupur district. To identify the factors that determines the customers level of awareness towards various services offered by the public and private sector bank functioning in in Tirupur district. Research Methodology Current study is more of descriptive in nature. A sample of 420 banks customers were chose from the four public sector banks and three private sector banks functioning in Tirupur district. With the application of convenience sampling technique, samples of 30 respondents were chosen from two bank branches each of each bank category that was summed to 420. Results and Discussion Empirical analysis and interpretation of the data collected has been briefly discussed in this section of the study. TABLE: 1 DEMOGRAPHIC PROFILE OF THE RESPONDENTS Sl. No. Variables No. of Respondents Percentage Gender 1. Male 253 60.24 2. Female 167 39.76 Age 1. Below 25 Years 113 26.90 2. 26 35 Years 118 28.10 3. 36 45 Years 149 35.48 4. 46 55 Years 27 6.43 5. Above 55 Years 13 3.10 Educational Qualification 1. Up to HSC 61 14.52 2. Under Graduate 210 50.00 3. Post Graduate 118 28.10 4. Diploma 31 7.38 61

Source: Primary Data Out of 420 respondents surveyed, majority i.e., 60.24 per cent of the respondents are male and the remaining 39.76 per cent of the banks customers are female, respectively. Similarly it has been observed that 35.48 per cent of the respondents belong to the age group of 36-45 years and 28.10 per cent of the bank customers are aged between 26-35 years.followed by it has been observed that 50 per cent of the respondents are under- graduates and 28.10 per cent of the sample populations are have pursued post-graduation degree TABLE: 2 SOCIO-ECONOMICPROFILE OF THE RESPONDENTS Sl. No. Variables No. of Respondents Percentage Occupation 1. Government Employee 31 7.38 2. Private Sector Employee 57 13.57 3. Business 166 39.52 4. Professional 101 24.05 5. Retired Persons 3 0.71 6. Farmer 56 13.33 7. Others 6 1.43 Monthly Income 1. Below `.5000 29 6.90 2. `.5001-`.10000 144 34.29 3. `.10001-`.15000 156 37.14 4. `.15001-`.20000 39 9.29 5. Above `.20000 52 12.38 Marital Status 1. Married 310 73.81 2. Unmarried 110 26.19 Area of Residence 1. Urban 153 36.43 2. Semi Urban 156 37.14 3. Rural 111 26.43 Source: Primary Data It has been inferred that, 39.52 per cent of the bank customers are engaged in business and 24.05 per cent of the respondents are professionally qualified experts.from the above data analysis it has been observed that 37.14 per cent of the respondents monthly earning ranges between`.10001-`.15000 and 34.29 per cent of bank customers monthly earning varies between `.5001-`.10000. The above description infers that majority i.e., 73.81 per cent of the respondents are married and the remaining 26.19 per cent of the respondents are found to be unmarried. Further it has been observed that 37.14 per cent of the respondents live in semi-urban areas and 36.43 per cent of the sample populations reside in the urban areas of Tirupur District. Customers Level of Awareness towards the Banking Services It is evident from the empirical data analysis that, most of the banks customers are found to be well aware of the banking Ombudsman Scheme that enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks, it is ranked in first place with the mean score of 3.12. Followed by the sample bank customers have gained awareness on the banking services like: NRI deposit, insurance product, rate of interest on various deposits, interest rate option/fixed and floating rate on loans offered by the respective banks. These variables are ranked in second, third, fourth and fifth position with the mean score of 2.98, 2.88, 3.75 and 2.72, respectively. Similarly the respondents have stated that they possess reasonable knowledge on the banking services such as: electronic fund transfer, electronic clearance system, agency services, e banking, personal loan, net banking and ATM facilityoffered by the banks. These factors are ranked in sixth, seventh, eighth, ninth, tenth, eleventh and twelfth place with an average score of 2.66, 2.59, 2.42, 2.3, 2.27, 2.25 and 2.24, accordingly. From the empirical data analysis it has been observed that the respondents have slight knowledge on the services like: mobile banking, agriculture loan, housing loan, educational loan and online banking services offered by the banks. These variables are ranked in 2.21, 2.20, 2.15 and 2.10. Whereas the respondents do not have adequate knowledge on the banking facilities such as: vehicle loan, jewel loan, credit card /debit card facility, over draft and teller facilities offered by the banks. These factors are ranked in eighteenth, nineteenth, twentieth, twenty first and twenty second place with an average score of 2.08, 1.75, 1.65, 1.60 and 1.48, respectively. 62

Discriminant Function Analysis Discriminant analysis is used to determine the customers level of awareness towards the banking services offered by public and private sector banks. Predictor variable considered for the analysis includes the following: X 1 = Over draft,x 2 = Agriculture loan, X 3 = Educational loan, X 4 = Jewel loan, X 5 = Housing loan, X 6 = Vehicle loan, X 7 = Personal loan, X 8 = NRI Deposit, X 9 = Insurance product, X 10 = Interest rate option/fixed and floating rate on loan, X 11 = Rate of interest on various deposits, X 12 = Agency services, X 13 = Electronic Fund Transfer, X 14 = Electronic clearance system, X 15 = Teller facility, X 16 = Mobile banking, X 17 = Online banking, X 18 = Net banking, X 19 = E banking, X 20 = Credit card /Debit card facility, X 21 = ATM facility and X 22 = Ombudsman scheme. TABLE:3 PRIVATE SECTOR BANKS (GROUP MEAN SCORE) Category of Banker Particulars Public Sector Private Sector Mean SD Mean SD X 1 = Over Draft 4.522.811 4.286.845 X 2 = Agriculture Loan 3.700.768 3.892.831 X 3 = Educational Loan 3.928.950 3.770.921 X 4 = Jewel Loan 4.353.933 4.141.946 X 5 = Housing Loan 3.768.693 3.826.820 X 6 = Vehicle Loan 4.014.889 3.831.758 X 7 = Personal Loan 3.749.785 3.709.858 X 8 = NRI Deposit 3.116 1.350 2.934.877 X 9 = Insurance Product 3.213.663 3.033.748 X 10 = Interest Rate Option/Fixed/ Floating Rate on Loan 3.406.757 3.155.801 X 11 = Rate of Interest on Various Deposits 3.353.722 3.141.788 X 12 = Agency Services 4.000 1.258 3.169.835 X 13 = Electronic Fund Transfer 3.377.962 3.310.915 X 14 = Electronic Clearance System 3.585 1.251 3.249.926 X 15 = Teller Facility 3.961.934 3.563.928 X 16 = Mobile Banking 3.763.702 3.808 1.127 X 17 = Online Banking 3.947.976 3.859 1.115 X 18 = Net Banking 3.763.702 3.728 1.217 X 19 = E Banking 3.928 1.038 3.488 1.026 X 20 = Credit Card /Debit Card Facility 4.570.855 4.131.891 X 21 = ATM Facility 4.594.870 4.446 1.001 X 22 = Ombudsman Scheme 2.957 1.049 2.808 1.396 From the above data analysis it has been observed that the customers are found to be well aware of the banking services: over draft, educational loan, jewel loan, vehicle loan, personal loan, NRI deposit, insurance product, interest rate option/fixed/ floating rate on loan, rate of interest on various deposits, agency services, electronic fund transfer, electronic clearance system, teller facility, mobile banking, online banking, net banking, e banking, credit card /debit card facility and ATM facilities offered by public sector banks. Further it has been observed that the sample subjects have gathered information on the agricultural and housing loans offered by the private sector banks. 63

TABLE: 4 PRIVATE SECTOR BANKS (TEST OF EQUALITY OF GROUP MEAN SCORE UNVARIED ANOVA) Factors Wilk s Lambda F Sig X 1 = Over draft.980 8.464.004 X 2 = Agriculture loan.986 6.008.015 X 3 = Educational loan.993 2.980.085 X 4 = Jewel loan.987 5.335.021 X 5 = Housing loan.999.615.433 X 6 = Vehicle loan.988 5.187.023 X 7 = Personal loan.999.247.620 X 8 = NRI Deposit.994 2.690.102 X 9 = Insurance product.984 6.766.010 X 10 = Interest rate option/fixed and floating rate on loan.975 10.881.001 X 11 = Rate of interest on various deposits.981 8.236.004 X 12 = Agency services.867 63.939.000 X 13 = Electronic Fund Transfer.999.534.465 X 14 = Electronic clearance system.977 9.811.002 X 15 = Teller facility.956 19.194.000 X 16 = Mobile banking.999.232.631 X 17 = Online banking.998.733.392 X 18 = Net banking 1.000.134.715 X 19 = E banking.956 19.022.000 X 20 = Credit card /Debit card facility.940 26.457.000 X 21 = ATM facility.994 2.615.107 X 22 = Ombudsman scheme.996 1.523.218 Level of significance: 5 per cent Eigen value :.342 Percentage of Variation Explained : 100 per cent Wilk s Lambda :.745 Chi-Square :119.664 DF : 22 P :.000 Canonical Correlation :.505 Canonical Discriminate Function Fitted : D=-2.062+.174X 1 -.229X 2 +.004X 3 +.187X 4 -.290X 5 +.075X 6 -.187X 7 -.260X 8 +.467X 9 +.074X 10 -.067X 11 +.621X 12 -.609.X 13 +.250X 14 +.247X 15 -.404X 16 -.165X 17 -.120X 18 +.533X 19 +.187X 20 -.037X 21 +.069X 22 Classification of Individuals Using the discriminate function fitted and the observed predictors variables of individual, which classified and correct percentage is presented below TABLE: 5 PRIVATE SECTOR BANKS (DETERMINATION OF PERCENTAGE OF CORRECT CLASSIFICATION BY USING DISCRIMINATEFUNCTION ON THE DATA) Factors Public Sector Private Sector Total Public Sector 151(72.90) 56(27.10) 207(100) Private Sector 60(28.20) 153(71.80) 213(100) Source: Primary Data Relative Importance of Predictor Variable The relative importance of each predictor variables in discriminating between the two groups is obtained and the results are presented below: 64

TABLE: 6 PRIVATE SECTOR BANKS (RELATIVE IMPORTANCE) Factors Importance Value of the variables (I j ) Relative Importance (R j ) X 12 = Agency services.669 16.01 1 X 20 = Credit card /Debit card facility.430 10.29 2 X 15 = Teller facility.367 8.78 3 X 19 = E banking.365 8.73 4 X 10 = Interest rate option/fixed and floating rate on loan.276 6.60 5 X 14 = Electronic clearance system.262 6.27 6 X 1 = Over draft.243 5.81 7 X 11 = Rate of interest on various deposits.240 5.74 8 X 9 = Insurance product.218 5.22 9 X 4 = Jewel loan.193 4.62 10 X 6 = Vehicle loan.191 4.57 11 X 3 = Educational loan.144 3.45 12 X 8 = NRI Deposit.137 3.28 13 X 21 = ATM facility.135 3.23 14 X 22 = Ombudsman scheme.103 2.46 15 X 17 = Online banking.072 1.72 16 X 13 = Electronic Fund Transfer.061 1.46 17 X 7 = Personal loan.042 1.01 18 X 18 = Net banking.031 0.74 19 Note: Negative Scorings are not considered for Analysis From the detailed data analysis it has observed that out of 22 variables took for analysis nineteen variables are considered as important determinant. It has been found that the customers possess adequate knowledge on the services: agency services, credit card /debit card facility, teller facility, e banking, interest rate option/fixed and floating rate on loan, electronic clearance system, over draft, rate of interest on various deposits, insurance product, jewel loan, vehicle loan, educational loan, NRI deposit, ATM facility, ombudsman scheme, online banking, electronic fund transfer, personal loan and net banking services offered by the banks operating in India. Whereas the sample subjects do not have adequate knowledge on the services like Agriculture loan, Housing loan and Mobile banking services offered by the public and private sector banks. Findings of the Study The study observed that the sample consumers have exhibited higher degree of awareness towards various banking services offered by the public sector in Tirupur region in comparison to the services offered by the private sector banks. Further, the study has observed that the sample customers possess adequate knowledge on the services: agency services, credit card /debit card facility, teller facility, e banking, interest rate option/fixed and floating rate on loan, electronic clearance system, over draft, rate of interest on various deposits, insurance product, jewel loan, vehicle loan, educational loan, NRI deposit, ATM facility, ombudsman scheme, online banking, electronic fund transfer, personal loan and net banking services offered by the banks operating in India. From the detailed data analysis it has been observed that techno-savvy private sector banks have been focusing their operations in more of metro and urban cities and they have failed to extend adequate services to the customers living in tier III cities and its surrounding semi-urban or rural region. Thus, it is suggested to the private sector banks to start focusing on servicing the banking service need of customers living in tier III cities and its surrounding semi-urban or rural region, like Tirupur District. As these days technology is considered as the easy mode of reaching customers in any remote login area, private sector banks have to efficiently use internet and mobile base 3G or 4G technologies to reach their clients and spread knowledge about their banking functions. It is very importance, because as, stated earlier the banks goal of satisfying their customers and retaining them for long period would be possible only if the customers have gained greater awareness towards the various services offered by the bank. Conclusion Bank s primary business is to make money (in the form of interest earnings) from its assets, which primarily are in the form of loans and advances. The bank cannot operate profitability and prove to be effective in productivity in term of business, profits and advances both from its branches and its employees, unless and until it have sufficient client bases and their continuous support to the bank. This is possible only if the consumer gain adequate awareness about various services offered by their bankers. Thus, it is suggested to the bankers to talk all possible measures to educate their customers about their services. The bankers are Rank 65

suggested to efficiently use internet and mobile base 3G or 4G technologies to reach their clients and spread knowledge about their banking functions Reference 1. Ismail A. Bootwala and Anjali Gokhru (2012), A Study on Customers' Perception on Services Provided by in the city of Ahmedabad, Pacific Business Review International, Volume.No.5, Issue.No.5,PP:109-121, November. 2. Mala.K and Maria John.S (2014), Commercial Banking and Marketing of Banking Services, International Journal of Pharmaceutical Sciences and Business Management,Volume.No.2, Issue.No.3, ISSN: 2310-6913, PP:5-13,March 3. Uttarwar V.R (2014), A Critical Study of Banking Services & Their Promotional Practices, Asian Journal of Management Sciences, Volume.No.2,Special Issue.No.3,PP:74-77, March. 4. A project report on awareness level of personal banking products of SBI bank, http://www.slideshare.net/babasabpatil/aproject-report-on-awareness-level-of-personal-banking-products-of-sbi-bank-13746662, July 24 th 2012 5. http://www.iamabanker.in/aam-banker/banking-products-and-services.html 66