COMPARITIVE STUDY OF CUSTOMER SATISFACTION IN XPERIENCE AND NON-

EXPERIENCE BRANCHES OF UNION BANK OF INDIA

A Final Semester Project Report

Submitted in partial fulfillment of the requirement for the

Award of Degree of Master of Business Administration

2012 – 2014

Under the guidance of: Submitted By:

Dr. SANGEETA MALIK VINCENT DANIEL CLEMENT

04114803912

DEPARTMENT OF MANAGEMNT

MAHARAJA AGRASEN INSTITUTE OF TECHNOLOGY

(Affiliated to G.G.S.I.P. University)

Sector-22, Rohini, Delhi-110086

An ISO 9001:2008 Certified Institute

AICTE NBA Accredited Institute

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DECLARATION

This is to certify that I, VINCENT DANIEL CLEMENT had completed the project titled

“Comparitive study of Customer Satisfaction in Xperience and Non-experience Branches of

Union Bank of India” under the guidance of Dr. Sangeeta Malik in the partial fulfillment of the

requirement for the award of degree of MBA from Maharaja Agrasen Institute of Technology

(Affiliated to G.G.S.I.P University), New Delhi. This is an original piece of work and I had

neither copied nor submitted it earlier elsewhere.

VINCENT DANIEL CLEMENT

MBA (Batch 2012- 2014)

Dated -

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CERTIFICATE FROM GUIDE

This is to certify that the project titled “COMPARITIVE STUDY OF CUSTOMER

SATISFACTION IN XPERIENCE AND NON-EXPERIENCE BRANCHES OF UNION

BANK OF INDIA” is an academic work done by VINCENT DANIEL CLEMENT submitted in

the partial fulfillment of the requirement for the award of the Degree of MBA from Maharaja

Agrasen Institute of Technology (Affiliated to G.G.S.I.P. University), New Delhi under my

guidance and direction. To the best of my knowledge and belief the data and information

presented by him/her in the project has not been submitted earlier.

Dr SANGEETA MALIK

(Professor)

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Acknowledgment

I hereby take this opportunity to thank Maharaja Agrasen Institute of Technology for

providing me an opportunity to do a Major Project on “Comparative Study of Customer

Satisfaction in Xperience and non-experience branches of Union Bank of India”.

I express my sincere gratitude to my mentor and guide, Dr. Sangeeta Malik who always

provided me with necessary inputs, guidance and direction to carry out this project. She

provided me access to different domains of knowledge from where I collected inputs for this

project.

Last but not the least, my million thanks to all the people including customers of the banks

whom I have conversed with and taken inputs from to move ahead and complete this

project.

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EXECUTIVE SUMMARY

The working of the customer's mind is a mystery which is difficult to solve and

understanding the nuances of what customer satisfaction is, a challenging task. This exercise in

the context of the banking industry will give us an insight into the parameters of customer

satisfaction and their measurement. Banking is a customer oriented services industry, therefore,

the customer is the focus and customer service is the differentiating factors.

The purpose of this paper is to compare the xperience and non-experienced branches of Union

Bank of India in terms of customer satisfaction and to find out the various reasons of difference

in customer satisfaction in both types of branches. The data was collected by getting the

questionnaire filled by the respondents who were using the banking services. There are a total of

310 respondents, which are divided in the ratio of 50:50 in Xperience and Non-experience

branches of Union Bank of India. It is an analytical research project in which both primary and

secondary data are used to reach to the conclusions.

After the above collected data was analyzed on the basis of “percentage”, and then presented in

tabular form, it was found out that the alternate hypothesis proved out to be true. Thus, it can be

concluded that there is higher level of customer satisfaction in Xperience branches of Union

bank of India as compared to the Non-experience branches. It is thus recommended that the non

experience branches should also be converted to give customers a rich and unique experience in

terms of their satisfaction.

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Table of Content

S.NO. PARTICULARS PAGE NO.

1. Chapter I – Introduction 7

2. Chapter II – Research Methodology 23

3. Chapter III – Analysis 27

4. Chapter IV – Limitations of the Study 35

5. Chapter V – Findings and Recommendations 37

6. Bibliography 40

7 Questionnaires 41

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CHAPTER I

INTRODUCTION

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OVERVIEW OF THE INDUSTRY

From the ancient times in India, an indigenous banking system has prevailed. The businessmen

called Shroffs, Seths, Sahukars, Mahajans, Chettis etc. had been carrying on the business of

banking since ancient times. These indigenous bankers included very small money lenders to

shroffs with huge businesses, who carried on the large and specialized business even greater than

the business of banks. The origin of western type commercial Banking in India dates back to the

18th century. The story of banking starts from Bank of Hindustan established in 1770 and it was

first bank at Calcutta under European management. In 1786 General Bank of India was set up.

Since Calcutta was the most active trading port in India, mainly due to the trade of the

British Empire, it became a banking center. Three Presidency banks were set up under charters

from the British East India Company- Bank of Calcutta, Bank of Bombay and the Bank of

Madras. These worked as quasi central banks in India for many years. The Bank of Calcutta

established in 1806 immediately became Bank of Bengal. In 1921 these 3 banks merged with

each other and Imperial Bank of India got birth. It is today's State Bank of India. The name was

changed after India's Independence in 1955. So, State bank of India is the oldest Bank of India.

In 1839, there was a fruitless effort by Indian merchants to establish a Bank called Union Bank.

It failed within a decade. Next came Allahabad Bank which was established in 1865 and working

even today. The oldest Public Sector Bank in India having branches all over India and serving

the customers for the last 145 years is Allahabad Bank. Allahabad bank is also known as one of

India's Oldest Joint Stock Bank. The Oldest Joint Stock bank of India was Bank of Upper India

established in 1863 and failed in 1913. The first Bank of India with Limited Liability to be

managed by Indian Board was Oudh Commercial Bank. It was established in 1881 at Faizabad.

This bank failed in 1958. The first bank purely managed by Indian was Punjab National Bank,

established in Lahore in 1895. The Punjab national Bank has not only survived till date but also

is one of the largest banks in India. However, the first Indian commercial bank which was wholly

owned and managed by Indians was Central Bank of India which was established in 1911.

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The first bank in India, though conservative, was established in 1786. From 1786 till today,

the journey of Indian Banking System can be segregated into three distinct phases:

Early phase of Indian banks, from 1786 to 1969

Nationalization of banks and the banking sector reforms, from 1969 to 1991

New phase of Indian banking system, with the reforms after 1991

Phase1

The first bank in India, the General Bank of India, was set up in 1786. Bank of Hindustan and

Bengal Bank followed. The East India Company established Bank of Bengal (1809), Bank of

Bombay (1840), and Bank of Madras (1843) as independent units and called them Presidency

banks. These three banks were amalgamated in 1920 and the Imperial Bank of India, a bank of

private shareholders, mostly Europeans, was established. Allahabad Bank was established,

exclusively by Indians, in 1865. Punjab National Bank was set up in 1894 with headquarters in

Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara

Bank, Indian Bank, and Bank of Mysore were set up. The Reserve Bank of India came in 1935.

During the first phase, the growth was very slow and banks also experienced periodic failures

between 1913 and 1948. There were approximately 1,100 banks, mostly small. To streamline the

functioning and activities of commercial banks, the Government of India came up with the

Banking Companies Act, 1949, which was later changed to the Banking Regulation Act, 1949 as

per amending Act of 1965 (Act No. 23 of 1965). The Reserve Bank of India (RBI) was vested

with extensive powers for the supervision of banking in India as the Central banking authority.

During those days, the general public had lesser confidence in banks. As an aftermath, deposit

mobilization was slow. Moreover, the savings bank facility provided by the Postal department

was comparatively safer, and funds were largely given to traders.

Phase2

The government took major initiatives in banking sector reforms after Independence. In 1955, it

nationalized the Imperial Bank of India and started offering extensive banking facilities,

especially in rural and semi-urban areas. The government constituted the State Bank of India to

act as the principal agent of the RBI and to handle banking transactions of the Union government

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and state governments all over the country. Seven banks owned by the Princely states were

nationalized in 1959 and they became subsidiaries of the State Bank of India. In 1969, 14

commercial banks in the country were nationalized. In the second phase of banking sector

reforms, seven more banks were nationalized in 1980. With this, 80 percent of the banking sector

in India came under the government ownership.

Phase3

This phase has introduced many more products and facilities in the banking sector as part of the

reforms process. In 1991, under the chairmanship of M Narasimham, a committee was set up,

which worked for the liberalization of banking practices. Now, the country is flooded with

foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to

customers. Phone banking and net banking are introduced. The entire system became more

convenient and swift. Time is given importance in all money transactions.

The financial system of India has shown a great deal of resilience. It is sheltered from crises

triggered by external macroeconomic shocks, which other East Asian countries often suffered.

This is all due to a flexible exchange rate regime, the high foreign exchange reserve, the not-yet

fully convertible capital account, and the limited foreign exchange exposure of banks and their

customers.

The Banking Structure in India

The commercial banking structure in India consists of scheduled commercial banks and

unscheduled banks. Scheduled banks constitute those banks that are included in the Second

Schedule of Reserve Bank of India (RBI) Act, 1934. As on June 30, 1999, there were 300

scheduled banks in India having a total network of 64,918 branches. The scheduled commercial

banks in India comprise State Bank of India and its associates (8), nationalised banks (19),

foreign banks (45), private sector banks (32), co-operative banks, and regional rural banks.

Before the nationalization of Indian banks, the State Bank of India (SBI) was the only

nationalized bank, which was nationalized on July 1, 1955, under the SBI Act of 1955. The

nationalization of seven State Bank subsidiaries took place in 1959.

After the nationalization of banks in India, the branches of the public sector banks rose to

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approximately 800 percent in deposits and advances took a huge jump by 11,000 percent.

Nationalization Process

1955: Nationalization of State Bank of India

1959: Nationalization of SBI subsidiaries

1969: Nationalization of 14 major banks

1980: Nationalization of seven banks with deposits over Rs 200 crore

Banks in India

In India, banks are segregated in different groups. Each group has its own benefits and

limitations in operations. Each has its own dedicated target market. A few of them work in the

rural sector only while others in both rural as well as urban. Many banks are catering in cities

only. Some banks are of Indian origin and some are foreign players.

Banks in India can be classified into:

Public Sector Banks

Private Sector Banks  

Cooperative Banks

Regional Rural Banks

Foreign Banks

One aspect to be noted is the increasing number of foreign banks in India. The RBI has shown

certain interest to involve more foreign banks. This step has paved the way for a few more

foreign banks to start business in India.

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Reserve Bank of India (RBI)

The central bank of the country is the Reserve Bank of India (RBI). It was established in April

1935 with a share capital of Rs 5 crore on the basis of the recommendations of the Hilton Young

Commission. The share capital was divided into fully paid shares of Rs 100 each, which was

entirely owned by private shareholders in the beginning. The government held shares of nominal

value of Rs 220,000.

The RBI commenced operation on April 1, 1935, under the Reserve Bank of India Act, 1934.

The Act (II of 1934) provides the statutory basis of the functioning of the Bank. The Bank was

constituted to meet the following requirements:

Regulate the issue of currency notes

Maintain reserves with a view to securing monetary stability

Operate the credit and currency system of the country to its advantage

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ABOUT THE ORGANIZATION

Union Bank of India was established on Nov 11 , 1919 and is head quartered in Mumbai. The

registered Office of the Bank was inaugurated by Mahatma Gandhi, father of the Nation in the

year 1921. Along with 13 other banks, Union Bank of India was nationalized in the year 1969 in

the first phase. Union Bank has the distinction of making profits consistently for the last 89

years since inception

BUSINESS OPERATIONS

Union Bank has huge and varied customer base approximating to 24 millions. Bank is targeting

customers from all demographic and economic profiles and introducing products and services to

meet their needs. The Bank Operates in all the areas including retail lending, personal banking,

corporate banking, international banking and investments & treasury. Bank’s lending also caters

to the rural and semi urban centers, financing Agriculture and allied activities, rural artisans,

micro & medium enterprises in these areas. Bank has opened 198 “Village Knowledge Centres”

to provide information to the local community on better agriculture practices, commodities,

marketing facilities and financial education.Bank also offers third party products like life and

general insurance, mutual funds, on- line trading, wealth management services through tie -up

with other FIs.

Bank places customer at the centre of all its operations and has transformed the process, people

and organizational structure. Bank has initiated a large scale transformation process named

“Nav Nirman” to address two critical aspects of growth- instilling the drive of sales & marketing

across bank staff and reconfiguration of bank’s business model. The transformation process

focuses on four key initiatives

a)Retail Asset ( marketing & processing)

b)SME marketing & processing)

c)Branch sales and services( improving the customer experience in the branch)

d) Centralisation of key processes

Bank has brought all its branches under Core banking solutions .Union Bank is the first large

bank to achieve 100 % CBS roll out. Bank has taken lead to establish alternate delivery channels

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in the form of ATMs, internet banking, phone banking and Mobile Banking . Bank has

introduced many technology based services like RTGS, online NEFT free of cost, on line

application for products and services and online redressal of grievances.

Network and distribution

The business is grouped under various Verticals and well defined “Business Strategic Units”

were formed, which will drive the growth. Bank has a network of more than 2500 service outlets

which includes specialized branches for MSME (SME SARALS), corporate credit , Union Loan

points for Retail Products etc. Bank has representative offices in Abu Dhabi and Shanghai and

is in the process of opening its office in Sydney, Australia. A full fledged overseas branch was

opened in Hong Kong. To serve the varied banking needs of the NRIs, Bank has placed number

of Marketing Officials at various centers in UAE and Shanghai. Bank has plans to deploy more

number of Marketing Officials at many other places. Bank plans to open 500 new branches in the

next six months for which it has received licences from RBI.The bank will accelerate its

presence in the global market space at key locations in the next two years as part of the Vision

strategy.

Diversification

Union Bank in partnership with Bank of India and Dai-Ichi of Japan has formed a subsidiary for

distribution of Life insurance products, which has started selling the products. Bank has signed

an agreement with Belgian KBC group for setting up a joint venture AMC in India. Union Bank

has signed MoU with NSIC for training and setting up Incubation cum Training centers to

promote first generation entrepreneurs in MSME segment. Bank has entered into MoU with

NCMSL for financing against warehouse receipts for agri. commodities kept at NCMSL

warehouses. Bank has announced opening 100 specialised Business Banking branches across the

country to focus exclusively on MSME sector with turn around time of 2 weeks for sanction of

proposals. Bank has launched Mobile banking facility “Umobile” which facilitates limited

transactions and other services through mobile phones.

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Growth & Performance

Total business of the Bank at the end of Dec’08 stood at Rs. 2,22,625 crore registering a growth

of 28.33 % over Dec’07.The bank’s total deposits as on 31 St Dec ’08 reached a level of

Rs.1,29,647 crore from Rs.99227 crore as on Dec’ 07 ,an increase of 30.66%. Gross advances of

the Bank reached a level of Rs.92,978 crore as on 31s t Dec’08,registering a growth of 25.22%

over Dec’07.

The Capital Adequacy Ratio of the Bank (BASEL I) is at 12.32% & BASEL II at 13.41 % as on

Dec’08.The net interest margin of the Bank increased to 2.97% for the nine months period ended

Dec’08.Return on average assets improved from 1.31% in Dec’07 to 1.92% in Dec’08(QoQ)

indicating more efficient use of Funds. The asset quality recorded a significant improvement

with steep reduction in Net NPAs from 0.35% in Dec’07 to 0.14% in Dec’08 and the Gross

NPAs from 2.10% to 1.68%

THE UNION XPERIENCE

The 'Union Xperience' was launched by the Bank in 2011 and has been rolled out so far in ten

cities viz Mumbai, Delhi, Hyderabad, Bangalore, Ahmedabad, Jaipur, Lucknow, Pune, Chennai

and Kolkata.

Recently, Union Bank customers in Ernakulam, Surat, Nasik and Chandigarh, have also started

experiencing the 'Union Xperience'. The long time vision is to roll out 'Union Xperience', to all

its Metro and Urban branches.

The existing branches have been remodelled to deliver superior customer experience. The thrust

is on automation of routine banking tasks viz passbook printing, cheque deposits etc. The sales

delivery model at these branches has also been re-designed.

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The brand and the promises

- OLD LOGO

- NEW LOGO

Bank has adopted a simple new logo for universal appeal and to aid top of mind recall. The new

logo symbolizes the qualities and values we stand for- Blue standing for the commitment and the

Red for the passion the Bank brings to the work. Union bank has promised 4 key deliverables to

customers based on the strength built in

1)Value for money

2)Committed turnaround time for delivery of products and services

3)Choice of banking channels for customers and

4)Transparency in product offerings and prices

Bank promises that YOUR DREAMS ARE NOT YOUR ALONE ,there is a bank that is ready to

fulfill the dreams of every one and thus ensuring that we remain GOOD PEOPLE TO BANK

WITH for all times to come.

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CUSTOMER SATISAFACTION

What constitutes Satisfaction?

The meaning of satisfaction: "Satisfied" has a range of meanings to individuals, but it

generally seems to be a positive assessment of the service.

The word "satisfied" itself had a number of different meanings for respondents, which can

be split into the broad themes of contentment/happiness, relief, achieving aims, achieving

aims and happy with outcome and the fact that they did not encounter any hassle.

Clearly then there is some variation in understanding of the term. Some of the interpretations fit

with the definitions used in much of the service quality and satisfaction literature, where

satisfaction is viewed as a zero state, merely an assessment that the service is adequate, as

opposed to "delight" which reflects a service that exceeds expectations. However, most

respondents have more positive interpretations of the term. These questions allow us to identify

priorities for improvement by comparing satisfaction with stated (overt) importance, comparing

satisfaction with modeled (covert) importance (from identifying key drivers of overall

satisfaction), as well as respondents' own stated priorities.

Ingrid FecÏikovaÂ, (2004) interpreted satisfaction as a feeling which results from a process of

evaluating what was received against that expected, the purchase decision itself and/or the

fulfillment of needs/want.

Satisfaction refers to achieving the things we want. If satisfaction interprets as "not going wrong"

the firm should decrease complaint which by its own is not sufficient. In order to satisfy

customers, company should improve its services and products. Customers with less expectation

are more satisfied: companies by adding innovative features would easily increase customer

satisfaction. In contrast, when customers are unaware of improvements but critical of losses in

existing quality are less satisfied and expect more.

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Customer satisfaction, a business term, is a measure of how products and services supplied by a

company meet or surpass customer expectation. It is seen as a key performance indicator within

business. In a competitive marketplace where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of business

strategy. Customer satisfaction is an ambiguous and abstract concept and the actual

manifestation of the state of satisfaction will vary from person to person and service to service.

The state of satisfaction depends on a number of both psychological and physical variables.

“The customer’s mind is still closed to us; it is a ‘black box’ that remains sealed. We can

observe inputs to the box and the decisions made as a result, but we can never know how

the act of processing inputs truly happens” -- John E. G. Bateson

Customer satisfaction can be experienced in a variety of situations and connected to both goods

and services. It is a highly personal assessment that is greatly affected by customer expectations.

Satisfaction also is based on the customer’s experience of both contact with the organization and

personal outcomes. Some researchers define a satisfied customer within the private sector as

“one who receives significant added value” to his/her bottom line—a definition that may apply

just as well to public services.

In today's competitive business environment marketing managers are more influenced from

customer expectation and meeting the demand for customer satisfaction is very important for

them. Every organization must define customer satisfaction regarding their market. So customer

satisfaction could not be defined only standard or quality of product. Customer satisfaction is

about relationships between the customer and product or service and the provider of a product or

service.

Customer satisfaction is a highly personal assessment that is greatly influenced by individual

expectations. Some definitions are based on the observation that customer satisfaction or

dissatisfaction results from either the confirmation or disconfirmation of individual expectations

regarding a service or product. To avoid difficulties stemming from the kaleidoscope of customer

expectations and differences, some experts urge companies to “concentrate on a goal that’s more

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closely linked to customer equity.” Instead of asking whether customers are satisfied, they

encourage companies to determine how customers hold them accountable.

Customer satisfaction is the degree to which a customer perceives that an individual, firm or

organization has effectively provided a product or service that meets the customer’s needs in the

context in which the customer is aware of and / or using the product or service. Satisfaction is

not inherent in the individual or the product but is a socially constructed response to the

relationship between a customer, the product and the product provider /maker. To the extent that

a provider / maker can influence the various dimensions of the relationship, the provider can

influence customer satisfaction

MEASURING CUSTOMER SATISFACTION IN THE   BANKING INDUSTRY

Banking operations are becoming increasingly customer dictated. The demand for 'banking

supermalls' offering one-stop integrated financial services is well on the rise. The ability of banks

to offer clients access to several markets for different classes of financial instruments has become

a valuable competitive edge. Convergence in the industry to cater to the changing demographic

expectations is now more than evident. Bancassurance and other forms of cross selling and

strategic alliances will soon alter the business dynamics of banks and fuel the process of

consolidation for increased scope of business and revenue. The thrust on farm sector, health

sector and services offers several investment linkages. In short, the domestic economy is an

increasing pie which offers extensive economies of scale that only large banks will be in a

position to tap. With the phenomenal increase in the country's population and the increased

demand for banking services; speed, service quality and customer satisfaction are going to

be key differentiators for each bank's future success. Thus it is imperative for banks to get

useful feedback on their actual response time and customer service quality aspects of retail

banking, which in turn will help them take positive steps to maintain a competitive edge.

The working of the customer's mind is a mystery which is difficult to solve and understanding

the nuances of what customer satisfaction is, a challenging task. This exercise in the context of

the banking industry will give us an insight into the parameters of customer satisfaction and their

measurement. This vital information will help us to build satisfaction amongst the customers and

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customer loyalty in the long run which is an integral part of any business. The customer's

requirements must be translated and quantified into measurable targets. This provides an easy

way to monitor improvements, and deciding upon the attributes that need to be concentrated on

in order to improve customer satisfaction. We can recognize where we need to make changes to

create improvements and determine if these changes, after implemented, have led to increased

customer satisfaction. "If you cannot measure it, you cannot improve it." - Lord William

Thomson Kelvin (1824-1907).

The Need to Measure Customer Satisfaction:

Satisfied customers are central to optimal performance and financial returns. In many places in

the world, business organizations have been elevating the role of the customer to that of a key

stakeholder over the past twenty years. Customers are viewed as a group whose satisfaction with

the enterprise must be incorporated in strategic planning efforts. Forward-looking companies are

finding value in directly measuring and tracking customer satisfaction (CS) as an important

strategic success indicator. Evidence is mounting that placing a high priority on CS is critical to

improved organizational performance in a global marketplace.

With better understanding of customers' perceptions, companies can determine the actions

required to meet the customers' needs. They can identify their own strengths and weaknesses,

where they stand in comparison to their competitors, chart out path future progress and

improvement. Customer satisfaction measurement helps to promote an increased focus on

customer outcomes and stimulate improvements in the work practices and processes used within

the company.

 When buyers are powerful, the health and strength of the company's relationship with its

customers – its most critical economic asset – is its best predictor of the future. Assets on the

balance sheet – basically assets of production – are good predictors only when buyers are weak.

So it is no wonder that the relationship between those assets and future income is becoming more

and more tenuous.  As buyers become empowered, sellers have no choice but to adapt. Focusing

on competition has its place, but with buyer power on the rise, it is  more important to pay

attention to the customer.

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Customer satisfaction is quite a complex issue and there is a lot of debate and confusion about

what exactly is required and how to go about it. This article is an attempt to review the necessary

requirements, and discuss the steps that need to be taken in order to measure and track customer

satisfaction.

Service Quality and Customer Satisfaction:

There is a great deal of discussion and disagreement in the literature about the distinction

between service quality and satisfaction. The service quality school view satisfaction as an

antecedent of service quality - satisfaction with a number of individual transactions "decay" into

an overall attitude towards service quality. The satisfaction school holds the opposite view that

assessments of service quality lead to an overall attitude towards the service that they call

satisfaction. There is obviously a strong link between customer satisfaction and customer

retention. Customer's perception of Service and Quality of product will determine the success of

the product or service in the market.

If experience of the service greatly exceeds the expectations clients had of the service then

satisfaction will be high, and vice versa.. In the service quality literature, perceptions of service

delivery are measured separately from customer expectations, and the gap between the two

provides a measure of service quality.

Expectations and Customer Satisfaction:

Expectations have a central role in influencing satisfaction with services, and these in turn are

determined by a very wide range of factors lower expectations will result in higher satisfaction

ratings for any given level of service quality. This would seem sensible; for example, poor

previous experience with the service or other similar services is likely to result in it being easier

to pleasantly surprise customers. However, there are clearly circumstances where negative

preconceptions of a service provider will lead to lower expectations, but will also make it harder

to achieve high satisfaction ratings - and where positive preconceptions and high expectations

make positive ratings more likely. The expectations theory in much of the literature therefore

seems to be an over-simplification.

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CHAPTER II

RESEARCH

METHODOLOGY

OBJECTIVES OF THE STUDY

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1. To study the difference in satisfaction level of customers in two different types of branches i.e. Xperience and Non-experience branches.

2. To study the additional benefits being availed by customers of Xperience Branches as compared to Non-experience branches.

3. To study overall customer perception about Xperience and Non- experience Union Bank of India Branches.

HYPOTHESIS

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H0 (Null Hypothesis) – There is no difference in the satisfaction level of customers of Xperience

and Non-experience branches of Union Bank of India.

H1 (Alternate Hypothesis) – There is significant difference in the satisfaction level of customers

of Xperience and Non-experience branches of Union Bank of India.

Scope of Study

The scope of the study is confined in comparing the two types of branches in Union Bank of

India in terms of customer satisfaction. The study will be undertaken on the basis of sample

survey. The total number of respondents for the whole study is 310, out of which 155 are from

Xperience Branches and rest 155 from Non-experience Branches. The branches are as follows:

XPERIENCE BRANCHES

NOIDA (NCR)

SAMALKHA (NCR)

KIRTI NAGAR (DELHI)

VIKAS PURI (DELHI)

NON EXPERIENCE BRANCHES

MANGOLPURI (DELHI)

LODHI COLONY (DELHI)

AZADPUR (DELHI)

CHAKKARPUR (NCR)

KIRARI (DELHI)

METHODOLOGY

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Type of research: Quantitative Research

Quantitative research is ‘Explaining phenomena by collecting numerical data that are analyzed

using mathematically based methods’. In this study also, data collected was grouped together,

coded into numerical form and then analyzed through mathematical methods to reach to a

conclusion.

Research Design :Analytical

The research design is analytical in nature. In analytical research, the researchers uses facts

or information already available, and analyze these to make a critical evaluation of the

material. Similarly it was done in this project, data was first collected by primary sources

and then analyzed to reach to the conclusion.

Sources of Data Collection : Primary and Secondary Data

The report is based on “Primary” as well as “Secondary” data. Primary data was collected by

getting questionnaires filled from customers while they were using bank services in the bank

premises. Secondary data is collected from different sources online.

Sample Design and Sample Size

In the present study Convenience Sampling was used for selection of respondents. The total

sample size of the project is 310 respondents, 155 from xperience branches and 155 from non-

experience branches.

Tool of Primary Data Collection

The methods that were used to collect primary data are:

Questionnaires

Personal Interviews

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CHAPTER III

ANALYSIS

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The below given five factors described the respondents group into different categories based on

different criteria’s.

FACTOR - 1

FACTORGENDER MALE 72 %

FEMALE 28 %

Out of the total respondents (310), in both types of branches, 72% were male respondents and

28% of females. This shows that banking related activities are performed more by male members

of the family as compared to female members.

FACTOR - 2

FACTORAGE GROUP LESS THAN 20 4 %

20-30 24 %30-40 20 %40-50 25 %50-60 15 %60-70 9 %70-80 3 %

Maximum numbers of respondents lie in the age group of “40-50”, which is considered to be a

mature age group. Overall distribution of respondents as per age criteria shows that the total

responses is wide spread among different age groups and thus, can be said to be more accurate

for all age group of people.

FACTOR – 3

FACTOROCCUPATION SERVICE 42 %

BUSINESS 27 %SELF EMPLOYED 5 %PROFESSIONAL 1 %RETIRED 8 %HOUSE WIFE 11 %STUDENT 6 %

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42% of respondents are from service sector, this shows the rise in income of people and

inclination of people from this sector, towards banking facility as compared to other professions.

FACTOR – 4

FACTORTYPE OF A/C DEPOSIT 92 %

LOAN 1 %LOCKER 1 %CURRENT A/C 6 %

The maximum percentage of type of a/c among respondents is “Deposit a/c”. This shows the

pattern of a/c holders in the bank branches which are inclined towards a particular side. A

deposit account is a savings account, current account, or other type of bank account, at a

banking institution that allows money to be deposited and withdrawn by the account holder.

These transactions are recorded on the bank's books, and the resulting balance is recorded as a

liability for the bank and represents the amount owed by the bank to the customer. Some banks

may charge a fee for this service, while others may pay the customer interest on the funds

deposited.

FACTOR – 5

FACTORANNUAL FAMILY INCOME LESS THAN 1,50,000 34 %

1,50,000 – 3,00,000 30 %3,00,000 – 5,00,000 17 %5,00,000 – 8,00,000 8 %8,00,000 – 12,00,000 6 %ABOVE 12,00,000 5 %

When respondents are classified as per income criteria, there comes a balance between

respondents and majority of the respondents are from low and middle income group. It justifies

the above factor, as people of low and middle income group are more interested in “Deposit a/c”

as a facility of bank rather than locker or current a/c.

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Customer Satisfaction – Comparison b/w Xperience and Non-experience

Branches

FACTOR – 1

EMPLOYEE RESPONSIVENESS XPERIENCE BRANCH NON EXPERIENCED BRANCHEXCELLENT 27 % 22 %GOOD 56 % 45 %AVERAGE 10 % 17%POOR 2 % 7 %DON’T KNW 5 % 9 %

Employee Responsiveness includes the following as per the questionnaire:

Feeling of being welcomed in the branch

Product knowledge of branch staff

Getting attended promptly at the counter

Advice and guidance on suitable products and services

Encouraging usage of technology oriented products and services

The result shows that there is a big shift in employee responsiveness towards customers after

conversion to Xperience branch and this shift can be seen in form of customer response as 56%

customers feel good employee responsiveness in Xperience branches as compared to 45%

response in non-experience branches.

FACTOR – 2

CUSTOMER ORIENTATION AT THE BRANCH LEVEL

XPERIENCE BRANCH NON EXPERIENCED BRANCH

EXCELLENT 21 % 18 %GOOD 51 % 36 %AVERAGE 13 % 19 %POOR 3 % 7 %DON’T KNW 12 % 20 %

Customer Orientation at the branch level includes the following:

Sitting arrangements for waiting customers

Ambience and overall atrractiveness

Arrangements for receiving complaints

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There is a big shift in the customer orientation by the branch employees in Xperience Branches

(51%) than in non-experience branches(36%). Employees in the Xperience branches are trained

thoroughly to attend to the needs of the customers and this training is very beneficial, this is

evident from the figures given above.

FACTOR – 3

ADMINISTRATIVE AND SUPERVISORY EFFECTIVENESS

XPERIENCE BRANCH NON EXPERIENCED BRANCH

ALWAYS 43 % 34 %MOSTLY 34 % 33 %RARELY 4 % 9 %NEVER 4 % 6 %DON’T KNW 15 % 18 %

43% people in Xperience branches feel that administrative effectiveness always prevailed in the

branch whereas only 34% respondents feel the same in Non-experience branches. This shows the

shift in customer perception and employee responsiveness towars customers after conversion.

FACTOR – 4

OVERALL EXPERIENCE WITH NEW PRODUCTS AND SERVICES

XPERIENCE BRANCH NON EXPERIENCED BRANCH

EXCELLENT 8 % 8 %GOOD 14 % 9 %AVERAGE 8 % 2 %POOR 1 % 1 %DON’T USE PRODUCT 69 % 80 %

The above mentioned New Products and Services refers to:

Debit /ATM Card

Credit Card

Internet Banking

Mobile Banking

RTGS/NEFT

Demat Accounts

Third Party Products

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69% people in Xperience branches don’t use the new products and services whereas 80% people

don’t use it in Non-experience branches. This shows how people still attach a stigma to new

products like ATM, Credit Card facility and so on.

FACTOR – 5

DOES BANK AGGRESIVELY SELL ITS PRODUCTS AND SERVICES ?

XPERIENCE BRANCH NON EXPERIENCED BRANCH

YES 35 % 30 %NO 65 % 70 %

35% of people feel that bank aggressively sells its products in Xperience branches as compared to 30% in

non-experince branches. It shows that after conversion, employees are more aware about the needs of

customers and ways to attract them towards the new facilities avalaible.

Extra services available to “XPERIENCED BRANCHES” customers

The below mentioned factors describe the extra services avalaible to Xperience branch customers as compared to non-experienced branch customers.

ACCESSIBILITY AND QUALITY OF SERVICE – XPERIENCED BRANCHES

RATING OF SELF OPERATED SERVICES IN XPERIENCE BRANCHES (ATM, PHONE BANKING, CASH DEPOSIT MACHINE, SELF PASS BOOK PRINTER, CASH DEPOSIT MACHINE, POS TERMINAL, KIOSK, CHEQUE DEPOSIT MACHINE ETC..)

XPERIENCE BRANCH

EXCELLENT 8 %GOOD 16 %AVERAGE 13 %POOR 1 %DON’T USE PRODUCT 62 %

SPECIAL CUSTOMER CARE – XPERIENCE BRANCHES

HOW OFTEN HELP FROM “BRANCH ASSIST” IS REQUIRED ? XPERIENCE BRANCHOFTEN 30 %SOMETIMES 54 %NEVER 16 %

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AVALIBILTY OF BRANCH ASSIST WHENEVER NEEDED XPERIENCE BRANCHALWAYS 72 %SOMETIMES 23 %NEVER 5 %

IS “ QUEUE MANAGEMENT SYSTEM” HELPFUL ? XPERIENCE BRANCHYES 64 %NO 36 %

UNIQUE EXPERIENCE AFTER CONVERSION TO XPERIENCED BRANCHES

SPEED OF SERVICES XPERIENCE BRANCHMUCH BETTER 55 %SLIGHTLY BETTER 39 %SAME 6 %

RESPONSIVENESS AND COURTESY OF STAFF XPERIENCE BRANCHMUCH BETTER 55 %SLIGHTLY BETTER 39 %SAME 6 %

SPACE AND AMENITIES FOR CUSTOMER CONVENIENCE XPERIENCE BRANCHMUCH BETTER 45 %SLIGHTLY BETTER 49 %SAME 6 %

AMBIENCE AND LOOK XPERIENCE BRANCHMUCH BETTER 52 %SLIGHTLY BETTER 41 %SAME 7 %

OVERALL SATISFACTION WITH “UNION XPERIENCE” BRANCHES XPERIENCE BRANCHMUCH BETTER 40 %BETTER 55 %SAME 5 %

Overall 95% of people said that they find the Xperience Branch better than that of regular

branch. This shows the change in customer perception and satisfaction after conversion.

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OVERALL COMPARISON OF BOTH BRANCHES WITH OTHER BANKS

COMPARE CUSTOMER SERVICE OF THIS BANK WITH OTHER BANKS

XPERIENCE BRANCH NON EXPERIENCED BRANCH

MUCH BETTER 57 % 41 %SLIGHTLY BETTER 39 % 43 %SAME 3 % 12 %WORSE 1 % 3 %UNAWARE 0 % 1 %

HOW STRONGLY WILL THE CUSTOMER RECOMMEND THIS BANK TO KNOWN PEOPLE?

XPERIENCE BRANCH NON EXPERIENCED BRANCH

VERY STRONGLY 54 % 51 %PROBABLY 31 % 45 %NEVER 15 % 4 %

It is evident that customers are more satisfied after conversion and are more likely to recommend it to

their known relatives and friends. As after conversion 96% people say that Union Bank of India is better

than any other bank as compared to 84% such responses from Non-experience branches.

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CHAPTER IV

LIMITATIONS OF THE

STUDY

35

1. Research quality is heavily dependent on the individual skills of the researcher and more

easily influenced by the researcher's personal biases and idiosyncrasies.

2. Rigor is more difficult to maintain, assess, and demonstrate.

3. The volume of data makes analysis and interpretation time consuming.

4. It is sometimes not as well understood and accepted as quantitative research within the

scientific community

5. The researcher's presence during data gathering, which is often unavoidable in qualitative

research, can affect the subjects' responses.

6. Issues of anonymity and confidentiality can present problems when presenting finding.

7. Findings can be more difficult and time consuming to characterize in a visual way

This study is geographically restricted to Delhi and NCR only. The sample size is small (310

respondents) due to the specified reasons. Finding are based on sample survey through

questionnaires method. Hence there is a scope for the respondents to be biased or pretentious

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CHAPTER V

FINDINGS AND

RECOMMENDATIONS

FINDINGS

Customer satisfaction level is higher in Xperience Union Bank Branches as compared with the

Non-experience Union Bank Branches. Thus , our alternate hypothesis proves to be true.

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Reasons of Dissatisfaction in Non-experience Union Bank Branches

Behaviour and attitude of the staff is the first reason of customer dissatisfaction.

Time taken to process the transaction is the second reason of customer dissatisfaction.

Many of the services are not provided by the Non-experience Union Bank Branches

when compared to Xperience Union Bank Branches. e.g. Cash Deposit Machine, Self

passbook printer, phone banking etc. is not provided by Non Experience Branches of

Union Bank of India.

RECOMMENDATIONS

The staff should be adequately trained to deal with the customer on one to one basis in

Non-experience Branches.

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Many branches need to revive their infrastructure to have pace with the competing

environment.

Many of the services needs improvement in Non-experience branches.

Staff should be adequately trained to encourage face to face dealing in Non-experience

branches.

Staff should be friendly and approachable in Non-experience branches.

Clearly defined customer policy should be adopted by the branches.

Customer’s needs should be anticipated in advance so that they can be helped out in a

better way.

Treat your customers like your friends and they'll always come back.

Honour your promises.

BIBLIOGRAPHY

Books:

39

C R Kothari , Research Methodology, 2006

Dr FB Singh , Customer relationship management in banking sector

Dr Manoj Kumar Das, Measuring Customer Satisfaction in The Banking Industry

John, Joby, Fundamentals of Customer-Focused Management: Competing Through

Service . Westport, 2003

P N Varshney, Banking law and Practice, 2004

Raj Kumar, Political Economy Journal of India ,  Jan-June, 2008

Internet websites:

http://www.gktoday.in/brief-history-of-banking-in-india/

www.iba.org.in

www.rbi.gov.in

www.unionbankofindia.com/

http://en.wikipedia.org/wiki/Union_Bank_of_India

http://en.wikipedia.org/wiki/Customer_satisfaction

QUESSTIONNAIRE – NON- EXPERIENCE BRANCHES

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Location & Accessibility of the branch (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)Speed & Efficiency of Services (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)Cash TransactionsGetting a cheque bookGetting the passbook updatedObtaining a demand draftGetting timely credit for cheques depositedOpening/Closing/Renewal of Term Deposits AccountsOpening of an account(SB/CA)Operation of LockerEmployee Responsiveness (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)Feeling of being welcomed in the branchProduct knowledge of branch staffGetting attended promptly at the counterAdvice and guidance on suitable products & servicesEncouraging usage of technology oriented products & servicesCustomer Orientation at the Branch Level (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)Sitting arrangement for waiting customersAmbience & overall attractivenessArrangement for receiving complaint/suggestionResponse to complaints made to branch officialsDisplay of interest rates & service chargesDisplay of requirement for opening of an accountOffering non-banking transactions after business hoursOffering uninterrupted customer service continuously

Administrative & Supervisory Effectiveness (ALWAYS/MOSTLY/RARELY/NEVER/DNT KNW)Availability of forms for transactionsAvailability of brochures for schemesInformation in advance to customers about service charge & penalty deductionsProper response from other branches in the core banking scenarioNew Products & Services(y or n, if y then experience-EXCELLENT/GOOD/AVERAGE/POOR)Debit/ATM CardCredit CardInternet bankingMobile bankingRTGS/NEFTDemat AccountThird Party ProductsDoes the bank aggressively sell its products and services(y or n)if y , how : email ,telephone ,personal visit by a branch official,during your visit to branch,hoarding,advertisementCompare the customer service of this bank with other banks (MUCH BETTER/SLIGHTLY BETTER/SAME/WORSE/UNAWARE)How strongly will you recommend this bank to your friends and relatives (VERY STRONGLY/PROBABLY/NEVER)your suggestions for improving customer service in the bank/Any complaintsCustomer profile

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name of the customerAccount no.customer since(appx. Years)mobile no.email idAgeSexproduct /service being availedOccupationappx. Annual family income

QUESSTIONNAIRE – XPERIENCE BRANCHES

Location & Accessibility of the branch (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)Speed & Efficiency of Services (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)Cash TransactionsGetting a cheque bookGetting the passbook updatedObtaining a demand draftGetting timely credit for cheques depositedOpening/Closing/Renewal of Term Deposits AccountsOpening of an account(SB/CA)Operation of LockerEmployee Responsiveness (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)Feeling of being welcomed in the branchProduct knowledge of branch staffGetting attended promptly at the counterAdvice and guidance on suitable products & servicesEncouraging usage of technology oriented produucts & servicesCustomer Orientation at the Branch Level (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)Sitting arrangement for waiting customersAmbience & overall attractivenessArrangement for receiving complaint/suggestionResponse to complaints made to branch officialsDisplay of interest rates & service chargesDisplay of requirement for opening of an accountOffering non-banking transactions after business hoursOffering uninterrupted customer service continuously

Administrative & Supervisory Effectiveness (ALWAYS/MOSTLY/RARELY/NEVER/DNT KNW)Availability of forms for transactionsAvailability of brochures for schemesInformation in advance to customers about service charge & penalty deductionsProper response from other branches in the core banking scenarioNew Products & Services(y or n, if y then experience-EXCELLENT/GOOD/AVERAGE/POOR)Debit/ATM Card

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Credit CardInternet bankingMobile bankingRTGS/NEFTDemat AccountThird Party ProductsDoes the bank aggressively sell its products and services(y or n)if y , how : email ,telephone ,personal visit by a branch official,during your visit to branch,hoarding,advertisementrate the following self operated services in the branch (EXCELLENT/GOOD/AVERAGE/POOR)ATMPhone Banking (union reach)self service pass book printerCash deposit machinecheque deposit machinePOS TerminalKiosk'( for internet banking ,mobile banking ,etc)how often do you need help from 'Branch Assist'' (OFTEN/SOMETIMES/NEVER)Availability of 'Branch Assist ' whenever needed (ALWAYS/SOMETIMES/NEVER)Do you find ' Queue Management System"(QMS) helpful (YES/NO)Rating the branch functioning after conversion to "Union Experience" (MUCH BETTER/SLIGHTLY BETTER/SAME)Speed of servicesresponsiveness & courtesy of staffSpace & amenities for customer convenienceAmbience & lookwhat acc. To you is the uniqueness of "Union experience" branchyour overall satisfaction after conversion of branch to "Union Experience" (MUCH BETTER/ BETTER/ SAME)Compare the customer service of this bank with other banks (MUCH BETTER/SLIGHTLY BETTER/SAME/WORSE/UNAWARE)How strongly will you recommend this bank to your friends and relatives (VERY STRONGLY/ PROBABLY/ NEVR)your suggestions for improving customer service in the bank/Any complaintsCustomer profilename of the customerAccount no.customer since(appx. Years)mobile no.email idAgeSexproduct /service being availedOccupationappx. Annual family income

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