CUSTOMER AWARENESS REGARDING BANKING SERVICES

CUSTOMER AWARENESS REGARDING BANKING SERVICES The analysis of the customer survey conducted for the present study starts with this chapter. The chapter has been organised into two sections. The first section presents the demographic profile of the respondents from rural and urban branches separately, and the second section comparatively analyses the level of awareness with respect to banking services between the customers of rural and urban branches in Punjab. 5.1 Demographic Profile of the Respondents The initial phase of the analysis of any customer survey is to describe a profile of the respondents involved in the study. This section presents a profile of the respondents in terms of the background information relating to their personal characteristics such as gender, age, education, occupation, annual income and location. The purpose of this profile is to obtain a visualisation of the bank customers responding to the questionnaire. The demographic profile of the rural and urban bank customers has been presented separately as well as on aggregate basis in Table 5.1. The table provides profile analysis both by count and percent as part of the overall profile. The gender wise analysis shows that the percentage of males in rural branches has been found to be 73.33% and the percentage of females has been 26.67% whereas in urban branches gender of the respondents has been found near to the balanced with 56.47% of the replies being from males and 43.53% given by females. The overall sample is comprised of 64.90% of males and 35.10% of females. Age wise analysis of the respondents shows that in case of rural branches, the major chunk of the respondents (27.84%) are from the age group of 40-50 years followed by above 50 years (27.06%). In case of urban branches, the largest group of the respondents i.e. 44.71% falls in the age group of 20-30 years. Overall age wise analysis shows that the major chunk of the respondents is from the age group of 20-30 years i.e. 29.80% followed by the 30-40 years age group of respondents who account for 24.33% of the total respondents. The age group in the 40-50 years represents 22.16% of the respondents while 50 and above age category represents 19.41% of the respondents of which a major chunk of the respondents have been from rural branches. The under 21 years of age category of respondents constitutes the smallest number of replies (4.31%). 93

Table 5.1 Demographic Profile of Respondents Gender Age in Years Educational Background Occupation Income (per annum in ) Demographics Location Rural Percentage Urban Percentage Total Percentage Male 187 73.33 144 56.47 331 64.90 Female 68 26.67 111 43.53 179 35.10 Total 255 100.00 255 100.00 510 100.00 Upto 20 10 3.92 12 4.71 22 4.31 20-30 38 14.90 114 44.71 152 29.80 30-40 67 26.27 57 22.35 124 24.31 40-50 71 27.84 42 16.47 113 22.16 Above 50 69 27.06 30 11.76 99 19.41 Total 255 100.00 255 100.00 510 100.00 Upto Middle 57 22.35 19 7.45 76 14.90 Matric to 10+2 135 52.94 69 27.06 204 40.00 Bachelor's degree 44 17.25 78 30.59 122 23.92 Master's degree 18 7.06 64 25.10 82 16.08 Doctorate degree 1 0.39 25 9.80 26 5.10 Total 255 100.00 255 100.00 510 100.00 Student 17 6.67 22 8.63 39 7.65 Housewife 35 13.73 20 7.84 55 10.78 Service 30 11.76 108 42.35 138 27.06 Business 52 20.39 54 21.18 106 20.78 Profession 26 10.20 22 8.63 48 9.41 Agriculture 69 27.06 2 0.78 71 13.92 Retired 16 6.27 11 4.31 27 5.29 Any other 10 3.92 16 6.27 26 5.10 Total 255 100.00 255 100.00 510 100.00 No own income 52 20.39 42 16.08 94 18.43 Less than 1,50,000 100 39.22 117 45.88 217 42.55 1,50,001 to 3,00,000 3,00,001 to 5,00,000 81 31.76 69 27.06 150 29.41 20 7.84 23 9.02 43 8.43 Above 5,00,000 2 0.78 5 1.96 7 1.37 Total 255 100.00 255 100.00 510 100.00 94

As set out in Table 5.1, the largest number of respondents i.e. 30.59% in urban branches has completed their bachelor s degree whereas in rural branches majority of the respondents (52.94%) are matriculate or 10+2. Overall, the largest group of respondents includes those who have completed high school or 10+2 (40.0%) followed by respondents with a bachelor s degree from college has made up the second largest group of 23.92% followed by 16.08% of the respondents who have post graduate degree. The smallest group (5.10%) comprises of those who have Doctor of Philosophy degree (5.10%) followed by the respondents who have not completed high school i.e. 14.90%. Therefore, it has been found that 45.10% of the total respondents (both rural and urban) are at least graduates. The occupation wise analysis shows that in urban branches, a major chunk of the respondents is from salaried class (42.35%) followed by business class (21.18%) whereas in rural branches, the largest number of respondents is agriculturists (27.06%) followed by businessmen (20.39%) and housewives (13.73%). Occupation wise, the smallest group of respondents in rural branches includes daily wagers whereas in urban branches the smallest group includes agriculturists. The overall (both rural and urban) results show that the largest group of respondents is from service class (27.06%) followed by business class (20.78%) and agriculture (13.92%). Income wise analysis reveals that in case of both rural and urban branches, the majority of the respondents are from the income group of less than 1,50,000 per annum (p.a.) followed by 1,50,001 p.a. to 3,00,000 p.a. Similarly, in case of overall income wise analysis, the respondents in less than 1,50,000 p.a. category of income represent the largest group at 42.55%. Those respondents who are earning 1,50,001 p.a. to 3,00,000 p.a. represent the second largest group at 29.41%. The third largest group is the respondents having no own income i.e. they are either students or housewives, at 18.24%. The 3,00,001 p.a. to 5,00,000 p.a. income group is fourth. The smallest group is in the income group of Above 5,00,000 p.a. at 1.37%. 95

5.2 Customer Awareness regarding Banking Services The knowledge and understanding of a purchaser regarding products/services/ or institution/company providing the said products or services is termed as customer awareness. It deals with whether the customer is aware of or not aware of the products or services, their characteristics, substitutes, quality, price, producer/service provider etc. Awareness regarding products/ services makes the customer capable to get most from what he buys, get more choices, more understanding and safety. Consumer awareness refers to a buyer's knowledge of a particular product or company and it allows the buyer to get the most from what he buys. 1 Customer awareness is a market function that influences how individuals make choices between comparable goods and services. Therefore, if the customer is aware of the products/services and their producer/service provider, he comes to know what to buy from the available choices which can satisfy his needs. As far as banking services are concerned banks provide financial services to the customers. They have greater responsibilities to safeguard the personal or corporate funds on one hand and to perform the services in the interest of society and nation on the other. Due to liberalization and increasing competition, Indian banking industry is becoming buyer s market and hence, the banks have started to extend their customer base to the areas which were left unattended earlier. Therefore, whether the area is urban or rural, banks are focusing on diversifying their products and services to the masses and customers should also be aware of these services so that they can make a choice and avail the services without any fear and hesitation. Today s customer is presumed to be aware of all kinds of financial services offered by the various financial institutions (Arora, 2005). But due to lower literacy level and scarce sources of information in rural areas, the customers do not possess sufficient knowledge about the services offered by the banks. A large chunk of Indian population does not even know the significance of the bank account; for them, a bank account does not play any role other than safe-keeping of money (Dhrupad Buch, 2010) 2. Therefore, this section of the chapter analyses and compares the awareness level of rural and urban bank customers with respect to banking services in Punjab. The comparative analysis of sources of awareness has also been made in this section. 1 2 http://www.ehow.com/about_6137961_meaning-consumer-awareness_.html#ixzz1nudvzxxj http://ezinearticles.com/4254516?expert=dhrupad_buch 96

5.2.1 Comparative Analysis of Awareness Level of Rural and Urban Bank Customers The present section of this chapter has been designed to study and compare the awareness level of rural and urban customers with respect to selected personal banking services. For this purpose, a list of 30 services (adapted from the list given by Arora, 2005) grouped in six categories (Table 5.2) was provided to the customers and the customers were asked whether they were aware of the particular service. The data have been collected in the form of Yes or No from 510 customers (255 rural and 255 urban). Table 5.2 List of the Selected Banking Services A Deposit Services E E-banking Services 1 Savings A/c 20 Electronic Bill Payment 2 Fixed Deposit A/c 21 Phone/Tele Banking 3 Recurring Deposit A/c 22 Internet Banking 4 Current A/c 23 Debit/Credit Cards 5 NRI Deposit A/c 24 ATMs B Insurance and Mutual Funds 25 EFTs 6 Insurance F Other Services and Schemes 7 Mutual Funds 26 Home Banking C Fee based Services 27 Credit Information 8 Lockers 28 Schemes for Children 9 Issue/Collection of Drafts/Cheques/Bills 29 Schemes for Women 10 Issuing Travellers Cheques 30 Schemes for Retired and Old Persons 11 Insurance Premium Payment 12 Sale and Purchase of Securities 13 Foreign Money Change and Transfer D Loans 14 Consumer Loans for Durables 15 Education Loan 16 Car Loan 17 Auto Loan (other than Car Loan) 18 Home Loan 19 Agriculture Loan 97

5.2.1a Association between Location and Awareness Level of Customers For the analysis purpose, first of all, the responses have been cross tabulated in SPSS where the awareness of the customer with a particular service in the form of Yes and No has been taken in columns as dependent variable whereas the location i.e. Rural or Urban has been taken in rows as grouping variable. Therefore, the cross tabulations for various services have been made in the following manner: Location Awareness Yes No Total Rural Urban Total For analyzing the association between location and awareness level of customers regarding banking services, Pearson s Chi-square test of association has been deployed on the cross tabulated data, the results of which are given in the Table 5.3. The table shows that as far as Deposit Services are concerned customer awareness with Savings A/c is 100% in both rural and urban areas, hence, there is no association between the awareness level and location of bank branch regarding Savings A/c. Similarly in case of Fixed A/c and Current A/c, very minor differences have been found in awareness level of the two areas. But in case of Recurring Deposit A/c, the table shows that the awareness level of the rural customers is significantly lower than the urban ones as 53.73% of the urban customers are possessing knowledge regarding this whereas this %age is just 39.22 in case of rural customers. The value of Pearson s Chi-square comes to be 10.791 for Recurring Deposit A/c which is significantly higher (1%). But in case of NRI Deposit A/c, rural customers are found to have higher level of awareness as compared to urban ones and the value of Pearson s Chi-square for this association comes to be 3.942 which is statistically significant at 5% level. 98

Table 5.3 Location and Awareness Level of Customers S. No. Awareness with respect to A B C D E F Deposit Services %age of Rural Customers %age of Urban Customers 1 Savings A/c 100.00 100.00 Pearson's Chi-square 2 Fixed Deposit A/c 97.25 96.47 0.504 3 Recurring Deposit A/c 39.22 53.73 10.791 ** 4 Current A/c 70.20 74.51 1.186 5 NRI Deposit A/c 44.71 36.08 3.942 * Insurance and Mutual Funds 6 Insurance 42.75 57.25 10.737 ** 7 Mutual Funds 14.51 35.69 30.415 ** Fee based Services 8 Lockers 92.55 97.65 7.108 ** 9 Issue/Collection of Drafts/Cheques/Bills 86.67 93.33 6.696 * 10 Issuing Travellers Cheques 30.59 35.29 1.278 11 Insurance Premium Payment 44.31 56.47 7.538 ** 12 Sale and Purchase of Securities 22.35 39.22 17.015 ** 13 Foreign Money Change and Transfer 76.47 69.02 3.570 Loans 14 Consumer Loans for Durables 63.92 65.49 0.137 15 Education Loan 92.16 94.90 1.588 16 Car Loan 82.35 90.59 7.391 ** 17 Auto Loan (other than Car Loan) 74.12 74.51 0.01 18 Home Loan 98.82 94.12 8.293 ** 19 Agriculture Loan 96.47 81.18 30.042 ** E-banking Services 20 Electronic Bill Payment 41.18 49.41 3.49 21 Phone/Tele Banking 29.80 54.90 32.895 ** 22 Internet Banking 47.45 74.51 39.230 ** 23 Debit/Credit Cards 75.69 87.84 12.638 ** 24 ATMs 94.90 98.82 6.452 * 25 EFTs 45.88 42.35 0.644 Other Services and Schemes 28 Home Banking 19.61 35.69 16.478 ** 27 Credit Information 30.98 52.16 23.540 ** 28 Schemes for Children 31.37 41.18 5.301 * 29 Schemes for Women 33.33 38.82 1.666 30 Schemes for Retired and Old Persons 52.55 55.69 0.505 N Rural: 255 (50%), Urban: 255 (50%) Note: * significant at 5% and ** significant at 1 % level of significance. 99

In case of Insurance and Mutual Funds, there exist significantly higher differences in the awareness level of the customers from the two areas. Pearson s Chi-square values for these two items come to be 30.415 and 10.737 respectively which are both statistically significant at 1% (p 0.01). Thus, the awareness level of rural bank customers regarding Insurance and Mutual Funds has been found significantly lower than that of urban ones. The same is the case with Fee based Services where, this association has also been found statistically significant. High Pearson s Chi-square values have been found in case of Safety Lockers, Insurance Premium Payment, and Sale and Purchase of Securities which are arrived at 7.108, 7.538 and 17.015 respectively which are all statistically significant at 1%. In case of Issue/Collection of Drafts/Cheques/Bills, this value is found to be 6.696 which is significant at 5% level. The study reveals that in case of all the four items, as the percentages show, awareness level of urban customers is higher as compared to rural customers. But in case of Foreign Money Change and Transfer, 76.47% of the rural customers are found to be aware of this service as compared to 69.02% of urban customers though the difference has not been found statistically significant at 5% level. The reason of higher level of awareness among rural customers might be that in most of the rural areas, at least one person in one family (most of the families) is settled abroad and his/her family members get their remittances from abroad through money transfers (either run by banks or professionals). So far as Loan Services are concerned the study reveals that in case of Consumer Loans for Durables, Education Loan, Car Loan, Auto Loan and Home Loan, the awareness level of urban customers is found to be higher than rural customers though the association is statistically significant for two items only i.e. Car Loan (7.391, p.01) and Home Loan (8.293, p.01). But in case of Agriculture Loan, the study reveals that 96.47% customers of the rural bank branches are aware of it whereas this percentage is 81.18% in case of urban customers and the value of Pearson s Chi-square is 30.042 (p.0001). Because the rural people are more engaged in agriculture than urban ones and therefore, they use this service for financing their agricultural needs. In case of E-banking services, again the awareness level of rural customers has been found to be lower than urban customers except EFTs where 45.88 % of rural customers are aware of this as compared to 42.25% of urban customers though the difference has not been found 100

statistically significant. But in case of Phone/Tele Banking, Internet Banking and Debit/Credit Cards, the awareness level of urban customers is found to be much higher than rural customers and it is reflected in high Pearson s Chi-square values which are 32.895, 39.233 and 12.638 (all are significant at 1% i.e. p.0001) respectively. The reasons may be the lower level of education and lack of adequate sources of information in rural areas. In case of ATMs, the association between awareness and location is statistically significant at 5% level. In case of Other Services and Schemes, the study reveals that regarding Home Banking, Credit Information and Schemes for Children the awareness level of rural customers is significantly lower than urban customers as reflected in Pearson s Chi-square values which are 23.540, 16.478 and 5.301 (p.0001, p.0001 and p.05) respectively. It can be concluded from the above analysis that rural customers have less awareness regarding banking services in comparison to their urban counterparts though the branch location in rural areas should have increased their awareness regarding banking services. It may be due to low level of education, lack of scarce resources of information, and lack of confidence and exposure among rural customers. Out of 30 services, the awareness level of rural and urban customers differs significantly on 18 services. In case of 17 services, urban customers show higher level of awareness as compared to rural customers and for only two services i.e. NRI Deposit A/c and Foreign Money Change and Transfer (but statistically insignificant), rural customers are more knowledgeable than urban ones. The reason of higher level of awareness among rural customers might be that as explained earlier, the siblings or relatives of majority of the rural customers have been settled abroad and they (customers) operate their NRI A/c in local banks. Moreover, his/her family members get his/her remittances from abroad through money transfers (either run by banks or professionals). Thus, the null hypothesis cannot be accepted that there is no association between location and level of awareness of the customers. 5.2.2 Educational Background and Awareness level of Customers During study period while collecting responses, it has been observed by the researcher that the educational background of the customer also influences the awareness level of customers regarding banking services. Therefore, the objective has been further bifurcated into following sub-objectives: 101

a. To check the association between educational background and level of awareness of rural bank customers; b. To check the association between educational background and level of awareness of urban bank customers and c. To check the association between educational background and level of awareness of rural and urban bank customers together. For analyzing the above objectives, first of all, the ordinal data on education level that had been collected in five categories, have been clubbed and converted into two categories i.e. undergraduates and graduates or above. Therefore, the ordinal data have been transformed into nominal data. As the Chi-square test is applied if both the variables are nominally scaled, the nominally scaled data for the two variables have been obtained and the technique has been used to check the association between customers education level and their awareness level (refer Chapter 3 for hypothesis). To perform this technique, first of all, the data have been cross tabulated in the following manner: Educational Background Undergraduates Graduates or above Total Awareness Yes No Total After performing cross tabulations, the Pearson s Chi-square test of association has been deployed to get inferences in each case. 5.2.2a Association between Educational Background and Awareness Level of Rural Customers To investigate the influence of educational background of the rural customer on his/her awareness level regarding banking services, the opinion of 255 customers has been comparatively analysed. Out of the total 255 customers in rural branches, 192 customers i.e. 75.19% are found to be undergraduates (low education level) and remaining customers i.e. only 24.71% are either graduates or above (higher education level). 102

S. No. Table 5.4 Educational Background and Awareness Level of Rural Customers Awareness with respect to %age of Undergraduates %age of Graduates or Above Pearson's Chi-square A Deposit Services 1 Savings A/c 100.00 100.00 2 Fixed Deposit A/c 96.88 98.41 0.42 3 Recurring Deposit A/c 31.25 63.49 20.687 ** 4 Current A/c 65.10 85.71 9.631 ** 5 NRI Deposit A/c 41.67 53.97 2.904 ** B Insurance and Mutual Funds 6 Insurance 33.33 71.43 28.128 ** 7 Mutual Funds 7.81 34.92 28.101 ** C Fee based Services 8 Lockers 90.63 98.41 4.172 * 9 Issue/Collection of Drafts/Cheques/Bills 84.90 92.06 2.109 10 Issuing Travellers Cheques 25.52 46.03 9.399 ** 11 Insurance Premium Payment 35.94 69.84 22.096 ** 12 Sale and Purchase of Securities 14.58 46.03 27.03 ** 13 Foreign Money Change and Transfer 71.35 92.06 11.306 ** D Loans 14 Consumer Loans for Durables 56.77 85.71 17.231 ** 15 Education Loan 90.10 98.41 4.53 * 16 Car Loan 78.13 95.24 9.559 ** 17 Auto Loan (other than Car Loan) 68.75 90.48 11.672 ** 18 Home Loan 98.96 98.41 0.121 19 Agriculture Loan 95.83 98.41 0.927 E E-banking Services 20 Electronic Bill Payment 33.33 65.08 19.737 ** 21 Phone/Tele Banking 21.35 55.56 26.522 ** 22 Internet Banking 37.50 77.78 30.862 ** 23 Debit/Credit Cards 68.75 96.83 20.318 ** 24 ATMs 93.23 100.00 4.495 * 25 EFTs 39.06 66.67 14.557 ** F Other Services and Schemes 26 Home Banking 14.06 36.51 15.161 ** 27 Credit Information 22.92 55.56 23.633 ** 28 Schemes for Children 26.56 46.03 8.351 ** 29 Schemes for Women 28.13 49.21 9.487 ** 30 Schemes for Retired and Old Persons 46.88 69.84 10.034 ** N Undergraduates: 192 (75.29%), Graduates or above: 63 (24.71%) Note: * significant at 5% and ** significant at 1 % level of significance. 103

Table 5.4 depicts the results of association between educational background and awareness level of customers in rural bank branches (refer Chapter 3 for hypothesis). As far as Deposit Services are concerned the table shows that except Savings A/c and Fixed Deposit A/c, for all the services, highly statistically significant associations have been found between educational background of customer and their awareness level. The awareness level of undergraduate customers has been found to be significantly lower than the customers who are either graduates or above. The Pearson s Chi-square values come to be 20.687, 9.631 and 2.904 for Recurring Deposit A/c, Current A/c and NRI Deposit A/c respectively which are all significant at 1% level i.e. p.01. In case of Insurance and Mutual Funds, significantly higher values of Pearson s Chisquare (28.128 and 28.101 respectively) have been obtained. The awareness level of the customers with higher education level has been found to be significantly higher than the customers with low education level. Similarly, in case of Fee based Services, the study reveals that in case of Insurance Premium Payment, only 35.94% of undergraduates are familiar with this service whereas the %age is 69.84 in case of graduates or higher qualified customers. The value of Pearson s Chi-square comes to be 22.096 which is statistically significant at 1% level. Likewise, in case of Sale and Purchase of Securities, Foreign Money Change and Transfer, Travellers Cheques, and Safety Lockers, the values of Pearson s Chisquare are arrived at 27.030 (Sig. at 1%), 11.306 (Sig. at 1%), 9.399 (Sig. at 1%) and 4.172 (Sig. at 5%) respectively. The study reveals that the awareness level of low education group regarding Loan Services is slightly higher as compared to their awareness level regarding the first three categories of the services. In case of Home Loan and Agriculture Loan, no statistically significant association has been found between educational background and awareness level of both the groups. But in case of Consumer Loans for Durables, Auto Loan, Car Loan and Education Loan, customers awareness level differs significantly on account of their education level. Only 56.71% of the undergraduate customers are familiar with Consumer Loans for Durables as compared to 85.71% of the customers who are either graduates or above. Pearson s Chi-square values for this service is recorded at 17.231, significant at 1% level followed by Auto Loan (11.672, p.000), Car Loan (9.559, p.001) and Education Loan (4.530, p.05). A huge difference has been found in awareness level of the two groups as far as E-banking Services are concerned. The table depicts that the values of Pearson s Chi-square for all E-banking Services are found to be higher and statistically significant at 1% level except ATM service where, this value is arrived at 104

4.495 which is significant at 5% level. Therefore, the analysis shows that the awareness level of undergraduate customers regarding E-banking services is significantly lower than the customers who are graduates or above. Similar is the case with Other Services and Schemes where highly statistically significant associations have been found in the awareness level of two groups. Awareness level of low education customers is found to be lower than that of higher education customers as shown by the percentages. Pearson s Chi-square values for all the services i.e. Credit Information, Home Banking, Schemes for Children, Schemes for Women, and Schemes for Retired and Old Persons have been found as very high i.e. 23.633, 15.161, 8.351, 9.487 and 10.034 respectively which are all statistically significant at 1% level of significance. Thus, from the above analysis it can be concluded that in rural bank branches, on 25 banking services, the awareness level of undergraduate customers is significantly lower than the awareness level of the customers who are either graduates or above. Thus, the null hypothesis cannot be accepted in this case also. 5.2.2b Association between Educational Background and Awareness Level of Urban Customers This part of the section analyses and compares the awareness level of urban customers regarding banking services on the basis of their level of education (refer Chapter 3 for hypothesis). A comparative analysis of 88 (34.51%) undergraduate customers and 167 (65.49%) customers who are graduates or above, has been made, the results of which have been depicted by Table 5.5. The table gives the picture of the awareness level of undergraduate and graduate or above urban customers in terms of percentages and the results of Pearson s Chi-square Test of Association between education level and awareness level as well. The table shows that as far as Deposit Services are concerned no association has been found in case of Savings A/c as 100% customers in both the groups are aware of this service. Similarly, no statistically significant association has been found in case of Fixed Deposit A/c between the two groups. But in case of other Deposit Services in this category, the awareness level of low education group of customers has been found to be significantly lower than that of higher education group. Pearson s Chi-square values in the table also confirm this finding which come to be 5.233 (sig. 5%) for Current A/c, 8.878 (sig. 1%) for Recurring Deposit A/c, 5.759 (sig. 5%) for NRI Deposit A/c. In case of Insurance and Mutual Funds, Pearson s Chi-square values are arrived at 11.632 (sig. 1%) for Mutual Funds and 6.244 (sig. 1%) for Insurance which show that statistically significant association exist between educational background and awareness level of rural customers. 105

Table 5.5 Educational Background and Awareness Level of Urban Customers S. No. A B C D E F Awareness with respect to %age of Undergraduates %age of Graduates or Above Deposit Services 1 Savings A/c 100.00 100.00 Pearson's Chi-square 2 Fixed Deposit A/c 95.45 97.01 0.407 3 Recurring Deposit A/c 40.91 60.48 8.878 ** 4 Current A/c 65.91 79.04 5.233 * 5 NRI Deposit A/c 26.14 41.32 5.759 * Insurance and Mutual Funds 6 Insurance 46.59 62.87 6.244 * 7 Mutual Funds 21.59 43.11 11.632 ** Fee based Services 8 Lockers 96.59 98.20 0.652 9 Issue/Collection of Drafts/Cheques/Bills 92.05 94.01 0.358 10 Issuing Travellers Cheques 27.27 38.92 3.442 11 Insurance Premium Payment 51.14 59.28 1.555 12 Sale and Purchase of Securities 26.14 46.11 9.643 ** 13 Foreign Money Change and Transfer 68.18 69.46 0.044 Loans 14 Consumer Loans for Durables 50.00 73.65 14.266 ** 15 Education Loan 95.45 94.61 0.085 16 Car Loan 87.50 92.22 1.503 17 Auto Loan (other than Car Loan) 67.05 78.44 3.942 * 18 Home Loan 95.45 93.41 0.434 19 Agriculture Loan 86.36 78.44 2.366 E-banking Services 20 Electronic Bill Payment 32.95 58.08 14.559 ** 21 Phone/Tele Banking 40.91 62.28 10.626 ** 22 Internet Banking 60.23 82.04 14.432 ** 23 Debit/Credit Cards 77.27 93.41 14.059 ** 24 ATMs 97.73 99.40 1.389 25 EFTs 35.23 46.11 2.794 Other Services and Schemes 26 Home Banking 23.86 41.92 8.183 ** 27 Credit Information 35.23 61.08 15.434 ** 28 Schemes for Children 29.55 47.31 7.505 ** 29 Schemes for Women 28.41 44.31 6.136 * 30 Schemes for Retired and Old Persons 54.55 56.29 0.071 N Undergraduates: 88 (34.51%), Graduates or above: 167 (65.49%) Note: * significant at 5% and ** significant at 1 % level of significance. 106

In case of Fee based Services, a very little difference has been observed in the percentages of the two groups except Sale and Purchase of Securities. Pearson s Chisquare values for all other services explain that the associations are not statistically significant. In case of Sale and Purchase of Securities, 26.14% customers of the low education group have been found to be aware of this service as compared to 46.11% of the higher education group and Pearson s Chi-square value comes to be 9.643 which is statistically significant at 1% level. Likewise, in case of Loan Services only for two services i.e. Consumer Loan for Durables and Auto Loan, statistically significant associations have been found in the education level and awareness level of customers. For rest of the Loan Services education level of the customer does not make any difference in his/her level of awareness regarding banking services. As far as the E-banking Services are concerned the table reveals that the awareness level of urban customers significantly differs on account of their education level as shown by their percentages in the table. Pearson s Chi-square values for Electronic Bill Payment, Phone Banking, Internet Banking and Debit/Credit Cards are arrived at 14.559, 10.626, 14.432 and 14.059 respectively which are all statistically significant at 1% level. Awareness level of both the groups regarding EFTs has been found to be low where 35.23% customers of low education group and 46.11% customers of higher education group are familiar with this service. Therefore, it can be said that awareness level of higher education group with respect to E-banking Services is significantly higher than that of low education group. While talking about Other Services and Schemes, it is found that 35.23% customers of the low education group are aware of Credit Information service provided by the banks as compared to 61.08% customers of higher education group. Pearson s Chi-square value for this service comes to be 15.434 which is statistically significant at 1% level. Likewise, we get significantly higher values for Home Banking, Schemes for Children and Schemes for Women which are 8.183 (sig. 1%), 7.505 (sig. 1%) and 6.136 (sig. 5%) respectively. Thus, for these three services under this category, higher education group of customers have shown higher level of awareness than low education group. But for Schemes for Retired and Old Customers, we do not find any statistically significant association between education and awareness level of urban bank customers. 107

Therefore, the analysis concludes that in urban bank branches too, the awareness level of customers differs on account of their education level though it is little more than that of rural branches (refer Table 5.4). For 26 services, out of total 30 provided to the customers, the level of awareness of higher education group is higher than that of low education group of customers and the differences are found to be statistically significant for 16 services. Thus, the null hypothesis cannot be accepted. 5.2.2c Association between Educational Background and Awareness Level of all the Customers The present part of the section deals with the comparison of customers awareness level with respect to banking services on account of their educational background. This comparison has been done for all the 510 customers (rural and urban customers taken together) on the basis of their education level. By categorizing the customers on this basis, we get 280 (54.90%) customers who are undergraduates and remaining 230 (45.10%) are either graduates or above. Table 5.6 shows that in case of Deposit Services, the awareness level of higher education group regarding Current A/c and Recurring Deposit A/c is significantly higher than the customers with low education level. The Pearson s Chi-square values for these are found to be 15.190 and 37.057 respectively which are statistically significant at 1% level. Customers of both the groups have shown 100% awareness regarding Savings A/c. No statistically significant association has been found as far as Fixed Deposit A/c and NRI Deposit A/c are concerned. As far as Insurance and Mutual Funds are concerned the awareness level of higher education group of customers is significantly higher than that of low education group customers as shown by their percentages. For Insurance and Mutual Funds, the Pearson s Chi-square values have been arrived at 55.431 and 28.804 respectively both of which are statistically significant at 1% level. In case of Fee based Services, the study reveals that except Foreign Money Change and Transfer, the awareness level of higher education group of customers is significantly higher than that of low education group as shown by percentages, and higher and statistically significant Pearson s Chi-square values. 108

Table 5.6 Educational Background and Awareness Level of all the Customers S. No. Awareness with respect to %age of Undergraduates %age of Graduates or Above Pearson's Chi-square A Deposit Services 1 Savings A/c 100.00 100.00 2 Fixed Deposit A/c 96.43 97.39 0.385 3 Recurring Deposit A/c 34.29 61.30 37.057 ** 4 Current A/c 65.36 80.87 15.19 ** 5 NRI Deposit A/c 36.79 44.78 3.354 B Insurance and Mutual Funds 6 Insurance 37.50 65.22 38.804 ** 7 Mutual Funds 12.14 40.87 55.431 ** C Fee based Services 8 Lockers 92.50 98.26 8.99 ** 9 Issue/Collection of Drafts/Cheques/Bills 87.14 93.48 5.636 * 10 Issuing Travellers Cheques 26.07 41.30 13.264 ** 11 Insurance Premium Payment 40.71 62.17 23.662 ** 12 Sale and Purchase of Securities 18.21 46.09 46.04 ** 13 Foreign Money Change and Transfer 70.36 75.65 1.786 D Loans 14 Consumer Loans for Durables 54.64 76.96 27.53 ** 15 Education Loan 91.79 95.65 3.119 16 Car Loan 81.07 93.04 15.471 ** 17 Auto Loan (other than Car Loan) 68.21 81.74 12.101 ** 18 Home Loan 97.86 94.78 3.506 19 Agriculture Loan 92.86 83.91 10.176 ** E E-banking Services 20 Electronic Bill Payment 33.21 60.00 36.563 ** 21 Phone/Tele Banking 27.50 60.43 56.1 ** 22 Internet Banking 44.64 80.87 69.647 ** 23 Debit/Credit Cards 71.43 94.35 44.488 ** 24 ATMs 94.64 99.57 10.068 ** 25 EFTs 37.86 51.74 9.87 ** F Other Services and Schemes 26 Home Banking 17.14 40.43 34.247 ** 27 Credit Information 26.79 59.57 55.861 ** 28 Schemes for Children 27.50 46.96 20.679 ** 29 Schemes for Women 28.21 45.65 16.65 ** 30 Schemes for Retired and Old Persons 49.29 60.00 5.838 * N Undergraduates: 280 (54.90%), Graduates or above: 230 (45.10%) Note: * significant at 5% and ** significant at 1 % level of significance. 109

In case of Loan Services, higher Pearson s Chi-square values have been found for Consumer Loans for Durables, Car Loan and Auto Loan which are 27.530, 15.471 and 12.101 respectively which are all statistically significant. Percentages also confirm that for these three loan services, the awareness level of low education group of customers is significantly lower than that of higher education group. But in case of Agriculture Loan, 92.86% customers of low education group are aware of it whereas this percentage is 83.91 in case of higher education group and the difference is statistically significant at 1% level. The reason of the higher awareness level of the low education group is that a large chunk of the low education group comes from the rural areas and the rural customers have agriculture as their primary occupation. So, they are very well familiar with one of the financing pattern of their agricultural needs i.e. Agriculture Loan. Similarly, their awareness level regarding Home Loan is also higher though the difference is not statistically significant. Customers awareness significantly differs on account of their education level as far as E-banking Services are concerned. For all the services under this category, the awareness level of low education group customers is found to be significantly lower as compared to the awareness level of higher education group as shown by percentages and Pearson s Chi-square values in the table. Likewise, for Other Services and Schemes, education level of the customers plays a very important role in customer awareness regarding banking services. The percentages of the low education group of customers are found to be very low as compared to the percentages of higher education group. For all the services and schemes under this category, higher and statistically significant Pearson s Chi-square values have been arrived i.e. 34.247 for Home Banking, 55.861 for Credit Information, 20.679 for Schemes for Children, 16.65 for Schemes for Women, and 5.838 for Schemes for Retired and Old Persons. Thus, from the above analysis it can be concluded that education level of the customers is significantly associated with their awareness level regarding banking services irrespective of their location. The customers with higher education level have shown higher level of awareness with respect to 27 services as compared to the customers with low education level, especially regarding E-banking, and Other Services and Schemes. Moreover, on 24 services statistically significant differences have been 110

observed in the awareness level of the two groups together. Thus, the null hypothesis cannot be accepted that there is no association between level of awareness and educational background of the customers. 5.2.3 Sources of Customer Awareness regarding Banking Services Customers use a number of personal and impersonal sources to get the information regarding banking products/services/schemes. Here, the opinion of rural and urban bank customers on the sources of awareness has been comparatively analysed by using Independent Samples T- test. The respondents were asked to rate the sources from which they get information regarding banking services and it was measured at 5 point scale (Likert Scale) ranging from 5 to 1, 5 Very Important and 1 for Not Important. This analysis has been done to check whether there is any difference between rural and urban customers regarding the importance of sources of awareness with respect to banking services. To test the null hypothesis (refer Chapter 3 for hypothesis), Independent Samples T- test has been performed, the results of which are shown by Table 5.7. The table depicts the descriptive statistics (Mean and Standard Deviation), the mean difference in the opinion of rural and urban customers and t value of the differences together with the level of significance. The first source of information on banking services is Friends/Relatives/Colleagues as shown in the table. The prospective customers use this source of information even before opening an account with the bank. This source provides information not only about the service but also about its reliability. The study reveals that there exists statistically significant difference in the opinion of rural and urban bank customers as far as the information from Friends/Relatives/Colleagues is concerned. Rural customers average rating to this source is 4.22 which is the highest in the analysis and lies in 4 to 5 i.e. Important to Very Important whereas urban customers rate this source at 3.95 which is also a high rating. Therefore, it has been the most popular source of information among the customers of both the groups. Higher and positive t value shows that rural customers reliance on this source is significantly higher than that of urban ones. 111

Table 5.7 Comparative Analysis of Rural and Urban Customers on the basis of Sources of Awareness Sr. No. Sources Location WAS (Mean) SD Mean Difference df t Sig. 1 Friends/Relatives/Colleagues 2 Newspaper or other Print Media 3 Television 4 Radio 5 Bank Staff 6 Bank Brochures/Publications 7 Internet 8 Information through Phones/Mobiles Rural 4.22 0.75 Urban 3.95 1.01 Rural 3.70 1.10 Urban 3.87 1.15 Rural 3.83 0.84 Urban 3.90 1.09 Rural 2.64 1.22 Urban 2.47 1.26 Rural 3.74 1.31 Urban 3.66 1.16 Rural 2.35 1.05 Urban 3.06 1.25 Rural 2.20 1.01 Urban 3.12 1.43 Rural 2.21 1.03 Urban 2.84 1.31 0.27 468.184 * 3.4190 0.091-0.17 508-1.6921 0.388-0.07 478.163 * -0.8647 0.109 0.18 508 1.604 0.001 0.08 500.036 * 0.7166 0.474-0.71 494.469 * -6.9077 0.000-0.92 456.714 * -8.3835 0.000-0.63 480.058 * -6.0457 0.000 Note: * adjusted degree of freedom as Levene s test comes to be significant In case of Newspapers and Other Print Media as a source of information regarding banking services, it has been found that rural customers have given an average rating of 3.70 whereas the average rating given by urban customers is 3.87 which shows that the reliance of urban customers on Newspapers and Other Print Media is little more as compared to rural ones but the difference is not statistically significant as shown by insignificant t value (-1.6921). Low level of education in rural areas might be the reason for their lesser usage of Newspapers and Other Print Media as a source of awareness. Similarly, the usage of Television by urban customers as a source of awareness is slightly more than rural customers. Again the difference is not found to be statistically significant. But in case of Radio, it has been observed that reliance of rural customers on Radio as a source of awareness is little more than urban ones though the difference is found to be statistically insignificant. The reason being that while performing agriculture operations 112

and other external labour, rural customers keep their transistors with them and keep on listening it. Likewise, no statistically significant difference has been found in case of Bank Staff as a source of awareness but the rating of rural customers again is found to be little higher than urban ones. For rest of the sources i.e. Bank Brochures/Publications, Internet and Information through Phones/Mobiles, the table shows that rural customers do not use these sources as intensely as the urban customers do. It is confirmed by the higher and negative t values which are all significant at 1% level of significance. This is due to lower literacy level and lack of technology in the bank branches in rural areas which restraint the rural customers to get exposed to these sources of information. Therefore, it can be concluded from the analysis that there exist statistically significant differences in the opinion of rural and urban customers regarding the importance of sources of information affecting their level of awareness with respect to banking services. The dependence of rural customers on others to get information regarding banking services is more as compared to urban customers. It is because of low level of education, and lack of exposure and confidence among rural customers that they cannot get adequate information themselves. Hence, significantly lesser usage of Bank Brochures/ Publications, Internet and Information through Phones/Mobiles has been observed in rural areas as compared to urban. Thus, the null hypothesis cannot be accepted that there is no significant difference between the opinion of rural and urban bank customers regarding importance of sources of awareness with respect to banking services. Conclusion It can be concluded from the above analysis that overall, the majority of the respondents are males and from the age group of 20 to 30 years. A major chunk of the respondents has completed their education upto matric or 10+2. Occupation wise, the largest segment of the customers is from salaried class followed by business class and agriculture, and majority of them come in the income category of less than 1, 50,000 p.a. The comparative analysis of the demographic profile of the customers of rural and urban bank branches reveals that age wise, the major chunk of the rural respondents is above 30 years and in urban branches, the largest number of the respondents falls in the age group of 20-30 years. As per the educational background, in urban branches, major 113

chunk has completed their bachelor s degree whereas in rural branches, majority of the respondents are matriculate or 10+2. Income wise analysis reveals that in case of both rural and urban branches, the majority of the respondents are from the income group of less than 1,50,000 p.a. followed by 1,50,001 p.a. to 3,00,000 p.a. Occupation wise, the largest number of the respondents in rural branches is engaged in agriculture followed by businessmen and housewives whereas the major chunk of respondents in urban branches comes from salaried class followed by business class. Therefore, by selecting this sample, an attempt has been made to make the sample representative of the population of the study. The analysis of customer awareness reveals that location and educational background of the customers play a vital role in the awareness level of customers with respect to banking services. The customers of rural bank branches and the customers with low education level are found to have low level of awareness on almost all the selected personal banking services as compared to the urban customers and customers with higher education level respectively. Statistically significant differences have been found in the opinions of rural and urban customers regarding the sources of awareness they use to get information of the services offered by their bank branches. ****** *** * 114