JournalofBusinessManagement&SocialSciencesResearch(JBM&SSR)ISSNNo:23195614

Volume2,No.3,March2013
_________________________________________________________________________________

Customer Relationship Management as a Corporate

Strategy in Indian Banking Sector: A Comparative Study
of Private and Public Sector Banks
Dr. Richa Sinha, Assistant Professor, Joseph School of Business Studies, Sam Higginbottom Institute of
Agriculture, Technology & Sciences, Deemed University, Allahabad, India
Dr. Nishi Tripathi, Associate Professor, Department of Psychology Chitamber School of Humanities, Social
Sciences & Education, Sam Higginbottom Institute of Agriculture, Technology & Sciences, Deemed University
Allahabad, India

ABSTRACT
The paper aims to analyse the aspect of Complaint Handling in the area of Customer Relationship Management
in Banking sector in India. The various types of problems faced by customers in Banking services in both the
public and private sectors, the frequency of making complaints and reasons for not making complaints and the
expectation levels of customers regarding the ability of the customer service provider in handling complaints
are the main issues of discussion in the paper. The paper is based on primary data. The paper identifies certain
behavioural factors that are associated with complaint issues in the banking services of public and private
sector.
The paper has a practical implication both for the academicians and for the readers in terms of their concern
with the aspect issues regarding complaint management in order to enhance customer relationship by the
banking sector. The highlights of the paper can be used for further research purpose and provides knowledge
base to the readers. The paper is original in nature. This paper provides historical context for recent
developments in the area of Complaint management in banking sector. It can help in improving the complaint
management process in banks.
Key words: Complaint Handling, Complaint Management, Customer Relationship Management

Introduction
In todays marketplace the customer expectations
and demands are increasing because of high variety
products and services available in the market.
Maintaining customer relationships has become an
important part of every business. Handling
customer complaints has become an integral part of
Customer Relationship Management (CRM). An
effective system of Customer Relationship
Management required effective handling of
complaints received and a proper follow up in
order to sole those complaints. Timely and efficient
complaint handling system is the need of the hour.
The CRM should provide channels to its consumers
in order to effectively deal with consumer
complaints in order to track the complaints quickly
and resolve them to achieve customer loyalty. The
paper aims to analyse the aspect of Complaint
Handling in the area of Customer Relationship
Management in Banking sector in India. The
various types of problems faced by customers in
Banking services in both the public and private
sectors, the frequency of making complaints and
reasons for not making complaints and the
expectation levels of customers regarding the
ability of the customer service provider in handling
complaints are the main issues of discussion in the
paper. The paper is based on primary data. The
paper identifies certain behavioural factors that are

associated with complaint issues in the banking

services of public and private sector.

Review of Literature
Bhaskar (2004) analyzed that when good service is
extended to a customer, a loyal customer will work
as an ambassador to the bank and facilitate growth
of business. Hasanbanu (2004) stated that rural
customers do not have any idea as to how much
time is required for any type of bank services. The
rural customers are not aware of the purpose
availability of loan and how they can be availed,
since they do not know the complete rules and
regulations and procedures of the banks, and as
such, bankers reserve them for themselves and do
not find interest in educating the customers. Singh
(2006) focused on customer management in banks.
He stated that management aims to target the
customer with a view to gain customer insight and
provide value added products and services. Berry,
L.L., Zeithaml, V.A. and Parasuraman, A. (1985)
and Bitner (1996) indicated that service quality
consists of five dimensions: tangibles (appearance
of physical facilities, equipment, personnel and
written materials), reliability (ability to perform the
promised service dependably and accurately),
responsiveness (willingness to help customers and
provide prompt service), assurance (knowledge and

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JournalofBusinessManagement&SocialSciencesResearch(JBM&SSR)ISSNNo:23195614
Volume2,No.3,March2013
_________________________________________________________________________________
courtesy of employees and their ability to inspire
trust and a confidence), and empathy (caring and
individual attention the firm provides its
customers).

Graph 2 Banks: Rating the Types of problems

faced by the Respondents of the Private Sector
30
28

24

25
23
22

Research Methodology

20

The study was conducted into two phases namely

the Pilot study and The Main study. The results
obtained from the pilot study were analyzed and on
the basis of the results the questionnaire was
modified as per the requirements of the main study.
The main study was now conducted over a sample
size of 100 people and both the private sector and
public sector banks were taken into consideration
for the purpose of the study. The results of the
primary stage were combined with descriptive
research.
The main study was conducted with the help of the
structured interview schedule which was provided
to each respondent to be filled up. The interview
schedule consisted of both open ended and closed
ended questions.

Results and Findings

The study aimed to identify the various problems
that the people under survey faced while utilizing
the services of the public and private sector banks.
In the study the problem prone areas which were
considered for the purpose of research included:
Representative behaviour related, Information
related, Payment related, Enquiry related,
Documents
related,
Delay
related
and
Representative absenteeism related areas.
As represented in Graph 1 and Graph 2 it was
found that most of the problems in the public sector
had been associated with the representative
behaviour related areas followed by the enquiry
problems having the maximum response of 41%
and 40% respectively. In the private sector banks
also these two aspects had been rated by the
respondents with a response of 18% and 23%
respectively. But, on a comparative basis the public
sector banks had more customer complaints than
the private sector banks.
Graph 1 Banks: Rating the Types of problems
faced by the Respondents of the Public Sector
45

41

40

40
35

33

31

30

33

31

30

29
27

26

25

Public Little

20

20
15

13

11

12

12 12

11

10
5

3
0

0
RepresentativeInformation Payment
behavior
related
related
related

2
Enquiry
related

Public Partially

15

13

10
5

Public Very little

24

24

Public Much

10

6
10

Public Very much

0

Documents Delay relatedRepresentative

related
absenteeism
related

19

20

19
18

18
17

Private Very little

15

Private Little

15

Private Partially

12

Private Much
10

10

Private Very much

10

6
5

5
5

3
1

1
0

1
0

1 1
0

0 0

0
Representative Information
behavior
related
related

Payment
related

Enquiry related Documents

related

Delay related Representative

absenteeism
related

In order to understand the complaint handling

system the respondents were also asked whether
they make complaints regarding the problems faced
by them or not. Further the reasons for not making
complaints were also recorded for the purpose of
the study. As shown in graph 3, the findings
showed that that people did not make complaints
about their problems in both the sectors which had
a response of 29% for public sector and 45% for
private sector.
Various cases had been noted during the research
work in order to identify the various complaints
made by respondents. The procedure of making
complaints had been noted and how the problem
was solved was also recorded. The respondents
were also asked about the reasons for not making
any complaints.
Practically everyone has horror stories to tell about
their horrid experience as a customer. Apart from
the few, who seek and get justice, most of them
find themselves helpless. Most disgruntled
customers do not know where or how to complain.
They do not even know what type of information to
include in their complaint or how to escalate the
complaint to a higher level when they do not get a
satisfactory response. Such complaints usually end
up at the wrong desk or are just ignored. As a
result, dissatisfied customers usually end up losing
interest in pursuing the customer complaint and just
do not make any further effort. Through detailed
interviews with actual respondents, the reasons
were recorded for not making complaints. Some of
the examples are:
Customers sometimes do not complain for
the fear that others will view them negatively, and
at times they feel sympathy for the frontline
workers.
At times customers are blamed for the
complaint

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JournalofBusinessManagement&SocialSciencesResearch(JBM&SSR)ISSNNo:23195614
Volume2,No.3,March2013
_________________________________________________________________________________
When there is no response after the
complaint is made.
When apologies are there but no step is
taken to solve the problem.
The service provider promises to correct a
mistake in a timely manner but does not follow it.
Many customers are handled brusquely;
basis politeness goes out the window. People are
insulted in extreme cases, etc.
Graph 3 Banks: Complaint Handling
Did u complain about the problem

80
70

70

Was the problem solved after complaining

72

60
52

54
48

50

45

40
29

30

27

20

after the representative took help from others, their

problem was not solved, and 66% response when
other representative whose help was taken, were
also not able to solve the problem in the public
sector. The fact here is this that problem not getting
solved has a higher percentage value that the once
getting solved.
Similar is the case in the private sector also.
Although employees handled the queries and
complaints in a good way but in cases where other
representatives are referred to for solving
respondents problems, then 62% and 66%
responses showed that the problem does not get
solved in private sector banks.
Considering the scaling aspects as represented in
Graph 4.16 it can be said that the employees of
both the sectors were able to solve the queries
themselves but the level of getting the problem
solved ranged from partial to almost able.
Graph 4 Banks: Representatives Ability to
solve the problems of the Respondents

10

Able to solve

100

Public

91

Asked someone else to solve

80
66

70

Private

60

As represented in graph 4 and Graph 5, the

respondents were further asked to rate the
representatives ability to solve their problems in
order to identify the representatives effectiveness
in solving the respondents problems and
complaints. The findings showed the capability
levels of the employees in solving the queries of
the customers. It was found that most of the
representatives of the company were capable of
handling it themselves and some took the help of
their colleagues. The data of the public sector
showed that the problem or query handling or
complaint handling ability of the employees was
good but this was done mostly by taking help of
other colleagues. Whereas, in the private sector
most of the employees were able to handle the
complaints themselves. It was also found that the
degree of help taken by private sector employees
from others was less as compared to the public
sector. The findings showed 55% of the
respondents stated that their problem was solved by
the representative by asking others in public sector
banks, and 38% of the respondents stated that their
problem was solved by the representative by asking
others in private sector banks. 45% of the
respondents stated that the representative himself
solved their problem in public sector banks as
against 91% response in private sector banks.
The data also showed that 54% respondents agreed
with the fact that the service provider was not able
to solve their problem, 41% response when even

Asked someone else then solved

90

No
c o m p la in t
m ade

No

0
Yes

No

Yes

0
No
c o m p la in t
m ade

55

50

62

54

45

41

40

66

38
34

33

30
20
9

10
0
Yes

No

Yes

Public

No
Private

Graph 5 Banks: Rating the Representatives

Ability to solve the problems of the Respondents
Public Not at all
Public Partially

79

80

Public Can't say

70
Public Almost able
60
Public Very competent/ Total
help taken/Referred you to
someone else
Private Not at all

50
40

38

37

Private Partially

30

Private Can't say

20

15

14
10
0

56
1

5
0

Able to solve

9
2

10

768

00

Asked someone
else then solved

10 10
5
1
00

Asked someone
else to solve

Private Almost able

Private Very competent/ Total
help taken/Referred you to
someone else

Conclusion
On the basis of the study it can be said that the
major areas of concern for the banking sector in
order to maintain customer relations as a strategic

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JournalofBusinessManagement&SocialSciencesResearch(JBM&SSR)ISSNNo:23195614
Volume2,No.3,March2013
_________________________________________________________________________________
tool to retain and develop customers, are as
follows:
1.
Proper identification of Behavioural
considerations during a service interaction
2.
Dealing effectively with enquiry related
system
3.
Developing awareness tools
4.
Training behavioural skills of employees
5.
Proper development and implementation
of complaint handling system
It can be rightly said that Customer Relationship
Management is now a days gaining more and more
importance in each and every area of corporate
business. In the service sector Customer Relations
are developed for long term by making truthful and
honest commitments to the customers and fulfilling
them. Complaints should be properly handled as
they form a major part of maintaining customer
relations. An improper complaint handling can lead
to losses to the service provider not only in

financial terms but also at relational terms with the

customers. Thus customer relations forms a major
role player in the form of a strategic tool that helps
to hold on the customers for long term, and thus it
should be carefully handled in order to achieve
success.

References
[1] Berry, L.L., Zeithaml, V.A. and Parasuraman,
A. (1985), Quality counts in services, too,
Business Horizons, MayJune, pp. 4452.
[2] Bhaskar PV (2004). Customer Service in
Banks IBA Bulletin, 36(8): 9- 13.
[3] Hasanbanu S (2004). Customer Service in
Rural Banks: An Analytical Study of Attitude
of Different types of Customers towards
Banking Services IBA Bulletin, 36(8): 21-25.
[4] SinghS(2004).AnAppraisalofCustomer
ServiceofPublicSectorBanksIBABulletin,
36(8):3033.

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