An Empirical Investigation of Perceptions of Customers About Quality of Services Offered by Public and Private Sector Banks

The objective of the present study is to compare and analyze the service quality perceptions of customers about the public sector and private sector banks. The study also seeks to find the relevant dimensions of the SERVQUAL/SERVPERF scale in banking industry in Indian context. A total of235 respondents completed the field survey, and survey was conducted in the Dehradun city of Uttrakhand state. Results of overall service quality perceptions show that public sector banks are rated high as compared to private sector banks. Exploratory factor analysis was used and five factors were extracted using the method of principal component analysis. Correlation coefficient ‘r’ values for all the dimensions range from 0.945 to 0.973. Regression results show that except tangibility dimension, beta coefficient values for other four dimensions of service quality namely; empathy, reliability, assurance, responsiveness are higher in case of public sector banks. Statistically beta coefficient values for reliability, assurance dimensions are higher in case of public sector banks as compared to private sector banks. Whereas only one dimension tangibility got statistically higher beta coefficient value for private sector banks. The present study was conducted under the null hypothesis that there is no significant difference in the service quality perceptions of public and private sector banks. Results of t-test rejected the null hypothesis, led to the inference that there is significant difference in the service quality perceptions of public and private sector banks. In all present study arrived at a conclusion that customers perceive better quality of service for public sector banks as compared to private sector banks.