IMPACT OF SERVICE CHARGES CHARGED BY PUBLIC SECTOR BANKS WITH

SPECIAL REFERENCE TO COIMBATORE CITY

G.SANTHANA RAJEE*, K.KARPAGAMBIGAI**

*M.PHIL (Research Scholar), Dr.SNS Rajalakshmi College of Arts and Science, Coimbatore
** Asst. Professor, Department of Business Management, Dr.SNS Rajalakshmi Arts and Science
College Coimbatore

ABSTRACT: considers the deposit accepting and repayment

Now a days the usage of banking sector is functions only. The meaning of the bank can be
been increased compared to olden days. understood only by its functions just as a tree-is,
Anybody can use the banking service anywhere known by its fruits. As any other subjects, it has
at any time. But at the same there is some hidden its own origin, growth and progress. Let us
charges that is charged by the charged public briefly trace the evolution of Banking.
sector banks. Where that can be in terms of
service charges that is been charged for their 2. REVIEW OF LITREATURE
charges. Whether this can bring impact to the (Zeithmal etal., 1990)Productivity of
public this made the researcher to find out the banks and its progress of customer base are
impact of services charges charged by public interwoven. With growing competition in the
sector banks. To find out this various element is market, it is very vital for the banks to
used like awareness factor about the services, understand “How customers choose their
inconveniences faced by charging service are banks?” Thereafter, the banks can take proper
discussed detailed in the study. marketing efforts to increase client base.
Improper identification of true determinants of
KEYWORDS: Service Charges, Public Sector consumers' bank selection decision criteria may
Bank, Impact on Service Charges of Public result in poor results for marketing efforts.
Sector Bank Management's failure to categorize customers'
desire is also a kind of quality gap.
1. INTRODUCTION: Malhotra, Naresh K. et al. (1994) A study
The growth of 'Banking' is evolutionary for a valuation of the factors of service quality
in nature. There is no sole response to the between developed and developing countries. 10
question of what is banking, because a bank dimensions of service quality, suggested by
performs a multitude of tasks and services which Parasuraman et al. was used and assigned some
cannot be realized into a single definition. For a environmental factors such as economic and
public, a bank means a storehouse of money, for socio-cultural factors to each of ten dimensions.
a businessman it is an institution of finance and A main finding of the study was that the
for a worker it may be a depository for his customers in developed countries have higher
savings. It may be give details in brief as hopes and lower tolerance for ineffective
"Banking is what a bank does." But it is not clear services. On the other hand, customers in
enough to understand the subject in full. The developing countries tend to have higher
Oxford Dictionary defines a bank as "an acceptance levels and lower quality expectations.
establishment for the protection of money which Thwaites and Vere (1995) studied the
it pays out on a customer's order ". But this student buying performance of banking amenities
definition is also not enough, because it and concluded that students are not influenced
about the concept of financial supermarket and environment if an organization desires to
were more inclined to shop around for the best maintain market relationship.
offer. They were also found conducting business Mylonakis et al. (1998) concluded that
with more than one banking institution and were the most vital criteria for bank selection are
not particularly loyal. suitability, bank status, and quality of products &
The study conducted by Kangis, Peter et amenities, interest rates & fees, education &
al. (1997)'~focused on the service quality personnel links, facilities, branch environment,
opinions and opportunities of customers of services and after service satisfaction. The study
private and public banks in Greece. They likened on bank consumers of Greece showed that
the views of customers of public sector banks criteria like location, convenience and quality of
about the quality view and expectations of service (attention to the customer, personalized
services provided by the private banks and vice service, no queues) influence the bank selection
versa. The study considered five dimensions of and factors like Advertising did not seem to
service quality. One of the main finding of the inspiration bank consumers.
study was that the service offered by banks in the Nielson et al. (1998) conducted a survey
private sector has a more capable influence on of CEOs of corporate firms and banks to find out
actual perceptions of quality received than in the how well banking industry in Australia
case with the service from banks in the public understands the need of their business clients.
sector. Important changes were found for six factors,
Edris and Almahmeed (1997) conducted which business firms measured prior to
a study at Kuwait and concluded that the real establishing a banking relationship. Business
factors of bank choice decision made by business firms were found to place far more importance
consumers are more likely to be a function of on the banks readiness to accommodate their
both professed importance of bank features and credit wants, efficiency of banking processes and
the difference among banks in a given region the fact that banks have facts of their specific
with regard to each of these characteristics. business. On the other hand, banks felt it was
Huber et al. (1998) found that bank more vital for them to offer respectable prices,
consumers tend to be loyal provided they are full range of services and provide a personal
fulfilled with its services and they stick on to the banking relationship.
same bank for more than five to seven years on According to Kavita and Palanivelu
an average and change over only when they (2012), banking organizations bloom more on
move to a new home in an area outer their bank's charge old customers glad rather than getting
network. new consumers, no bank probably meet all the
Kandampully, Jay (1998) ~tried~ to scan needs of its consumers given to the assortment of
how a industries service workers develop the their needs.
emotional connection with customers which Sarangi and Srivastava (2012) Banking
leads to distinctive service and the ability to Sector in India has practiced tremendous changes
surpass consumer capacities. It revealed that a in its procedures during the last epoch. Due to
customer's trustworthiness and faith is added by the very competitive situation; it is pertinent to
the service people's commitment to seem less, note that banks need to differentiate themselves
steady and higher service, which establishes from each other. He measured the strength and
itself to the customer as service quality. On this impact of the organizational culture and
ground they argued that service quality precedes communication on facilitating employee
customer loyalty. They viewed service loyalty as engagement in Indian Private Banks.
a pre requisite in today's competitive
3. STATEMENT OF THE PROBLEM:
 The banking industry is the industry that 5.2: OBJECTIVE OF THE STUDY:
is been used by all the people. People use banks  To identify whether the respondents are
for various purposes like to save the money, to aware of service charges charged for their
get loans for education or for business service
development or for depositing amount. The  To identify the level of satisfaction of the
public sector banks introduce various types of respondents towards the service charges
service charges to their customers. But most of issued by the Public Sector Banks.
the customers are not having much knowledge  To identify the areas of major problems
about the service charges that is been charged by faced by the type of account holder due to
the banks. So, in-order to identify the problems the services charges issued by the Public
and inconvenience facing by the customers in Sector Banks.
charging the service charges by the public sector  To know whether the service charge is
banks. been charged in the beneficial manner

4. SCOPE OF THE STUDY: 5.3: SAMPLE DESIGN

Geographically Scope: The study was  Convenient sampling method is used
conducted in public sector banks in Coimbatore
were it will create more awareness about the 5.4: SAMPLE SIZE:
service charges charged by the banks because  240 sample are used for the study
Coimbatore is the vibrant city with lots of inputs.
Theoretical scope: The study was guided by the 5.5: DATA SOURCE
service charges that is been charged by the public This research descriptive in nature were the
sector through which it will create the impact on major tool used is questionnaire were questions
the respondents and it may guide the public were prepared and distributed to respondents and
sector banks to know about their customers. data are collected.
Time scope: The study on service charges of the In the study both primary and secondary data is
public sector banks and its impact was conducted been used.
on June 2017-nov 2017 and it also contains
secondary data that is been collected based on 5.6: TOOLS
the study.
 Descriptive
Content scope: The study majorly concentrated
 Ranking test
on the impact, inconveniences that is been faced,
 Fired man ranking
level of satisfaction, level of likely service
towards the service charges that is been charged  Chi-square
by the public sector banks and its relationship
with the demographic factor 5.7: LIMITATION OF THE STUDY
 The survey was conducted only in
5. RESEARCH METHODOLOGY Coimbatore. Hence, the results arrived
from the study may or may not be
5.1: POPULATION OF THE STUDY practical to other district in Tamil Nadu.
The population considered for present study is all Further, the survey method which was
persons of Coimbatore who is been using public adopted for collecting the data in this
sector bank services. The sample is been pick study has got its own limitations.
from Coimbatore city chosen widely accepted  For primary data, non-response mistake
characteristics cannot be governed out.
6. DATA ANALYSIS & INTERPRETATION:

6.1: DESCRIPTIVE
PARTICULARS Frequency Percentage Mean Std Dev
SB 76 31.7
TYPE OF CURRENT 55 22.9
2.5 1.3
ACCOUNT OD 23 9.6
SALARY 86 35.8
18-25 54 22.5
26-35 101 42.1
AGE 36-45 38 15.8 2.4 1.1
46-55 40 16.7
55 & ABOVE 7 2.9
MALE 108 45.0
GENDER 1.6 2.6
FEMALE 132 55.0
ILLETRATE 32 13.3
GRADUATE 84 35.0
EDUCATION
POST GRADUATE 85 35.4 2.6 .9
QUALIFICATION
PROFESSIONAL 37 15.4
OTHERS 2 8.0
BUSINESS 77 32.1
EMPLOYED 120 50.0
OCCUPATION PROFESSIONAL 11 4.6 2.1 1.2
RETIRED 75 2.9
OTHERS 2 10.4

6.1.1: INTERPRETATION female is at 55% have mean level at 1.6 and

standard deviation 2.6. Education qualification
From the above table we have found the respondents of illiterate is at 13.3%, graduate is
descriptive statistics for demographic variables at 35%, post graduate is at 35.4% , professional
here type of account have of SB account at is at 15.4%, others(housewivies,students) is at
31.7%,current account at 22.9%,OD account at 8% has mean level at 2.6 and standard deviation
9.6%,salary at 35.8% were mean level at 2.5 and .9.Occupations respondents of business is at
standard deviation. Age of respondents of 18-25 32.1%, employed is at 50%, professional is at
is at 22.5%,26-35 is at 42.1%,36-45is at 15.8 , 4.6%, retired is at 2.9%, others (like house wives,
46-55 is at 16.7, 56 & above 2.9% they have students) is at 2.9% and mean level at 2.1 and
mean level at 2.5 and standard deviation 11. standard deviation 1.2.
Genders of respondents of male is at 45%,
 6.2: CHI-SQUARE

6.2.1: GENDER & AWARENESS OF THE SERVICE CHARGES CHARGED

AWARENEES OF SERVICE
GENDER FREQUENCY/ TOTAL PERCENTAGE
CHARGES CHARGED
PERCENTAGE
YES NO
MALE FREQUENCY 105 3 108
45
PERCENTAGE 97.2 2.8 100
FEMALE FREQUENCY 129 3 132
55
PERCENTAGE 98 2 100
TOTAL 234 6 240 100

6.2.2: CHI-SQUARE FOR GENDER & AWARENESS OF THE SERVICE CHARGES

CHARGED
Asymp. Sig.
Factor Chi-square Value DF Table Value S/NS
(2-sided)

not
GENDER 0.062 1 3.841 0.803
Significant

6.2.3: INTERPRETATION
It is marked from the above table that the calculated chi-square value is less than the table
value and the result is not significant. Hence, the hypothesis “gender of the respondents and awareness
level of service charges charged by public sector banks. From the analysis, it is concluded that there is
no relationship between the gender of the respondents and awareness level of service charges charged
by public sector banks.

6.3: ACCOUNT TYPE & INCONVIENCE FACED

INCONVENIENCES FACED
INTERNET
PARTICUALRS ATM& NEGOTIABLE ALL THE
LOAN /MOBILE
FREQUENCY CDM INSTRUMENT ABOVE
BANKING
A/C TYPE YES NO YES NO YES NO YES NO YES
CURRENT FREQUENCY 42 7 27 22 9 40 23 25 29
OD FREQUENCY 28 11 28 9 33 4 10 23 24
SALARY FREQUENCY 13 1 4 9 13 0 6 3 15
SAVINGS FREQUENCY 53 8 32 29 9 52 38 23 25
6.3.2: CHI-SQUARE FOR INCONVIENCE FACED & ACCOUNT TYPE:

ASYMP.
CHI-SQUARE TABLE
FACTOR DF SIG. (2- S/NS
VALUE VALUE
SIDED)
INCONVIENCE Not
5.432 3 7.815 0.143
ATM Significant
INCONVIENCE
9.492 3 7.815 0.23 Significant
LOAN
INCONVIENCE
Significant
NEGOTIABLE 82.556 3 7.815 0
at 5% level
INSTRUMENT
ICONVIENCE
Significant
INTERNET/MOBILE 9.837 3 7.815 0.02
at 5% level
BANKING

INCONVIENCE ON Significant
10.748 3 7.815 0.013
ALL THE ABOVE at 5% level

INTERPRETATION:

It is marked from the above table the calculated chi-square value is lesser than the table value
and the result is not significant. From the analysis, it is concluded that there is relationship between the
account type and inconveniences on ATM & CDM.
It is marked from the above table the calculated chi-square value is lesser than the table value
and the result is significant. From the analysis, it is concluded that there is relationship between the
account type and inconveniences on Loan.
It is marked from the above table the calculated chi-square value is greater than the table value
and the result is significant. From the analysis, it is concluded that there is no relationship between the
account type and inconveniences on Negotiable instrument.
It is marked from the above table the calculated chi-square value is greater than the table value
and the result is significant. From the analysis, it is concluded that there is relationship between the
account type and inconveniences on Mobile/Internet banking.
It is marked from the above table the calculated chi-square value is greater than the table value
and the result is significant. From the analysis, it is concluded that there is relationship between the
account type and inconveniences on all the factors.
 6.4: FIREDMAN RANK TEST

6.4.1: RANKING THE AWARENESS ON SERVICE CHARGES

6.4.2: OVERALL AWARENESS LEVEL

S.No PARTICULARS MEAN SCORE RANK

1 ATM 2.01 I
2 CHEQUE/DEPOSITES 3.36 IV
3 LOAN 3.78 V
INTERNET
4 2.59 II
BANKING
5 MOBILE BANKING 3.26 III

6.4.3: CHI-SQUARE FOR RANKING

Table Asymp. Sig. (2-

Factor Chi-square Value DF S/NS
Value sided)

Significant
RANKING 188.277 4 9.488 0 at 5%
Level
 It is found that according to age, gender,
6.4.4: INTERPRETATION occupation, account type category of
respondents say that they are aware of the
It is marked from the above table that the service charges charged at 97.5% and 2.5%
calculated chi-square value is greater than the table say they are not aware of the respondents.
value and the result is significant. Hence, the  To identify the level of satisfaction of the
hypothesis “ranking of the respondents and respondents towards the service charges
awareness level of service charges charged by issued by the Public Sector Banks.
public sector banks. From the analysis, it is  It is found that according to age,
concluded that there is relationship between the occupation, and gender of respondents say
ranking of the respondents and awareness level of 11.25% are highly satisfied, 77.5% are
service charges charged by public sector banks. satisfied, 7.9% are neutral, and 3.3% are
dissatisfied.
7. FINDINGS  To identify the areas of major problems
faced by the type of account holder due to
 The findings are based on the objective that
is framed for the study. the services charges issued by the Public
 To identify whether the respondents are Sector Banks.
aware of service charges charged for their  It is found that according to the account
service type current account holder 54 say
 maximum inconveniences is ATM & on gender of the respondents female is
CDM, OD account type account holder 33 42.1%,educational qualification of the respondents
say maximum inconveniences is negotiable among them post graduate is 35.4%, based on the
instrument, Savings account holder 13 say occupation respondents among them employed is
maximum inconveniences is to ATM & at 50%.
CDM and negotiable instrument, saving
account holder say 53 maximum 8. CONCLUSION:
inconveniences to ATM & CDM. Based on this study, the view of the
 It is found that according to the age of the respondents among the public sector bank account
respondents at 18-25 say 37 say maximum holding customers based on the service charges
inconveniences is ATM & CDM, 26-35 say and its impact towards it are evaluated using
41 maximum inconveniences is ATM & appropriate statistical techniques such as Cross
CDM, 36-45 say 22 maximum tabulation analysis with Chi-square test, fired men
inconveniences is to ATM & CDM, 45-55 ranking in addition to descriptive statistics like
say 32 maximum inconveniences to ATM mean and standard deviation. It is concluded from
& CDM and age above 55 say 4 maximum the results of the study that major respondents are
inconveniences to ATM & CDM aware of the service charges that is been charged
 It is found that according to the Gender of for their transaction but they do not have much
the respondents of 66 male say maximum knowledge about the percentage that is been
inconveniences is ATM & CDM, 70 female charged. It is determined that the mainstream of
say maximum inconveniences is ATM & service users prefer service counter than internet
CDM. and mobile banking service. But when they use
 It is found that according to the occupation other type of transactions they do could not find
of the respondents 47 business respondents the service charges that is been made. It is
maximum inconveniences is negotiable concluded that majority of the Over Draft account
instrument, 65 employed respondents say holder face inconveniences in negotiable
maximum inconveniences ATM & CDM, 4 instrument and other account holder like saving,
professional say maximum inconveniences salary and current holder face inconvenience on
is to ATM & CDM, 4 retired respondents ATM & CDM & Mobile/Internet banking. It is
say maximum inconveniences to ATM & concluded that male face more inconveniences on
CDM and internet banking, 24 other(house loans and female face more inconveniences on
wife, students) respondents say maximum ATM & CDM. It is concluded that based on the
inconveniences to ATM & CDM ranking the ATM & CDM is given first rank and
 It is been summarized from above table the loan is given fifth rank. It is concluded that based
respondents has given first rank for ATM, likely level service charges that is charged is ok
second rank for internet banking, third rank among gender. From the above study it is
for mobile banking, fourth rank for concluded that the respondents are aware of the
cheques/deposits and fifth rank for loan service charges that been charged by the public
with related to awareness level for the sector banks but their satisfactory level is neutral
service charges charged. were they do not understand in what criteria the
charges are made.
7.1: DESCRIPTIVE
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