Measuring Service Quality of Commercial Banks in an Underdeveloped Economy: A Study in Assam of North East India

Measuring Service Quality of Commercial Banks in an Underdeveloped Economy: A Study in Assam of North East India

M. P. Bezbaruah, Basanta Kalita
DOI: 10.4018/978-1-4666-5154-8.ch018
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In the post-reform era, quality delivery of the services has acquired centre point of the service industry around the globe. The banking sector being purely a service-related industry has been influenced more by the issue of providing quality service. With the entry of private banks, the banking sector has gone through many transformations including the way services are extended. In a backward state like Assam, this has arrived a little late, but the changes are gradually visible. The chapter captures the service quality standard of the Scheduled Commercial Banks (SCBs) and also for the different bank groups in order to make a comparison. The SERVPERF scale is used to study the replies of the customers in two cities, Guwahati and Tezpur, and some econometric tools are used to analyse the data. The study reveals that the private sector banks are far ahead of the public sector banks in terms of quality of service. The private banks influence the service quality of the SCBs the most among all the bank groups. Overall, the public sector banks, which are the dominant market players, will have to work hard to catch the level of the private banks.
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1. Introduction

In today’s globalised world of fierce competition, providing a quality service to the customers is the key for existence and success of any business. Service quality or quality of service is said to be a function of three variables, viz., expectation, perception and performance. The earlier literatures have defined service quality as a comparison of what a customer feels a service provider should offer (customer’s expectation) with how the provider actually performs and service quality is a measure of how well the service level delivered matches customer expectation (Sudhahar & Selvam, 2007). Wisner and Corney (2001) have defined service quality as a global judgment on attitude, relating to the superiority of service. Delivering a quality service means satisfying customer expectations on a continuous basis.

Key Terms in this Chapter

SERVPERF: The performance component of the Service Quality scale (SERVQUAL), which has been shown to measure five underlying dimensions corresponding to Tangibles, Reliability, Responsiveness, Assurance, and Empathy.

Service quality: A comparison of expectations with performance. A business with high service quality will meet customer needs whilst remaining economically competitive. Improved service quality may increase economic competitiveness. This aim may be achieved by understanding and improving operational processes, identifying problems quickly and systematically, establishing valid and reliable service performance measures, and measuring customer satisfaction and other performance outcomes.

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