COMPARITIVE STUDY OF CUSTOMER

SATISFACTION IN XPERIENCE AND NONEXPERIENCE 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
1

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 -

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)

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.

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.

Table of Content
S.NO.

PARTICULARS

PAGE NO.

1.

Chapter I Introduction

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

Questionnaires

41

CHAPTER I
INTRODUCTION

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.

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
9

act as the principal agent of the RBI and to handle banking transactions of the Union government
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
10

subsidiaries

took

place

in

1959.

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

11

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.

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. Banks 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.

13

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 banks 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
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
14

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.

Growth & Performance

Total business of the Bank at the end of Dec08 stood at Rs. 2,22,625 crore registering a growth
of 28.33 % over Dec07.The banks 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 Dec08,registering a growth of 25.22%
over Dec07.
The Capital Adequacy Ratio of the Bank (BASEL I) is at 12.32% & BASEL II at 13.41 % as on
Dec08.The net interest margin of the Bank increased to 2.97% for the nine months period ended
Dec08.Return on average assets improved from 1.31% in Dec07 to 1.92% in Dec08(QoQ)
indicating more efficient use of Funds. The asset quality recorded a significant improvement
with steep reduction in Net NPAs from 0.35% in Dec07 to 0.14% in Dec08 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.

15

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.

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
16

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.

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.

17

Ingrid Fecikova, (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.

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 customers 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 customers 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 linea definition that may apply
just as well to public services.

18

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 thats more
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 customers 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

19

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
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
20

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.
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.

21

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.

22

23

CHAPTER II
RESEARCH
METHODOLOGY

OBJECTIVES OF THE STUDY

24

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

25

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
Type of research: Quantitative Research
26

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 nonexperience branches.

Tool of Primary Data Collection

The methods that were used to collect primary data are:

Questionnaires
Personal Interviews

27

CHAPTER III
ANALYSIS

28

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

FACTOR - 1
FACTOR
GENDER

MALE
FEMALE

72 %
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
FACTOR
AGE GROUP

LESS THAN 20
20-30
30-40
40-50
50-60
60-70
70-80

4%
24 %
20 %
25 %
15 %
9%
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
FACTOR
OCCUPATION

SERVICE
BUSINESS
SELF EMPLOYED
PROFESSIONAL
RETIRED
HOUSE WIFE
STUDENT
29

42 %
27 %
5%
1%
8%
11 %
6%

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
FACTOR
TYPE OF A/C

DEPOSIT
LOAN
LOCKER
CURRENT A/C

92 %
1%
1%
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
FACTOR
ANNUAL FAMILY INCOME

LESS THAN 1,50,000

1,50,000 3,00,000
3,00,000 5,00,000
5,00,000 8,00,000
8,00,000 12,00,000
ABOVE 12,00,000

34 %
30 %
17 %
8%
6%
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.

30

Customer Satisfaction Comparison b/w Xperience and Non-experience

Branches
FACTOR 1
EMPLOYEE
RESPONSIVENESS
EXCELLENT
GOOD
AVERAGE
POOR
DONT KNW

XPERIENCE BRANCH
27 %
56 %
10 %
2%
5%

NON EXPERIENCED
BRANCH
22 %
45 %
17%
7%
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
EXCELLENT
GOOD
AVERAGE
POOR
DONT KNW

XPERIENCE BRANCH
21 %
51 %
13 %
3%
12 %

Customer Orientation at the branch level includes the following:

Sitting arrangements for waiting customers

Ambience and overall atrractiveness
Arrangements for receiving complaints

31

NON EXPERIENCED
BRANCH
18 %
36 %
19 %
7%
20 %

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
ALWAYS
MOSTLY
RARELY
NEVER
DONT KNW

XPERIENCE BRANCH

NON EXPERIENCED
BRANCH

43 %
34 %
4%
4%
15 %

34 %
33 %
9%
6%
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
EXCELLENT
GOOD
AVERAGE
POOR
DONT USE PRODUCT

XPERIENCE BRANCH

NON EXPERIENCED
BRANCH

8%
14 %
8%
1%
69 %

8%
9%
2%
1%
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

32

69% people in Xperience branches dont use the new products and services whereas 80% people
dont 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 ?
YES
NO

XPERIENCE BRANCH

NON EXPERIENCED
BRANCH

35 %
65 %

30 %
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..)
EXCELLENT
GOOD
AVERAGE
POOR
DONT USE PRODUCT

XPERIENCE BRANCH

8%
16 %
13 %
1%
62 %

SPECIAL CUSTOMER CARE XPERIENCE BRANCHES

HOW OFTEN HELP FROM BRANCH ASSIST IS
REQUIRED ?
33

XPERIENCE BRANCH

OFTEN
SOMETIMES
NEVER

30 %
54 %
16 %

AVALIBILTY OF BRANCH ASSIST WHENEVER NEEDED

ALWAYS
SOMETIMES
NEVER

XPERIENCE BRANCH
72 %
23 %
5%

IS QUEUE MANAGEMENT SYSTEM HELPFUL ?

YES
NO

XPERIENCE BRANCH
64 %
36 %

UNIQUE EXPERIENCE AFTER CONVERSION TO XPERIENCED BRANCHES

SPEED OF SERVICES
MUCH BETTER
SLIGHTLY BETTER
SAME

XPERIENCE BRANCH
55 %
39 %
6%

RESPONSIVENESS AND COURTESY OF STAFF

MUCH BETTER
SLIGHTLY BETTER
SAME

XPERIENCE BRANCH
55 %
39 %
6%

SPACE AND AMENITIES FOR CUSTOMER CONVENIENCE

MUCH BETTER
SLIGHTLY BETTER
SAME

XPERIENCE BRANCH
45 %
49 %
6%

AMBIENCE AND LOOK

MUCH BETTER
SLIGHTLY BETTER
SAME

XPERIENCE BRANCH
52 %
41 %
7%

OVERALL SATISFACTION WITH UNION XPERIENCE

BRANCHES
MUCH BETTER
BETTER
SAME

XPERIENCE BRANCH

34

40 %
55 %
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.
OVERALL COMPARISON OF BOTH BRANCHES WITH OTHER BANKS
COMPARE CUSTOMER
SERVICE OF THIS BANK
WITH OTHER BANKS
MUCH BETTER
SLIGHTLY BETTER
SAME
WORSE
UNAWARE

XPERIENCE BRANCH

NON EXPERIENCED
BRANCH

57 %
39 %
3%
1%
0%

41 %
43 %
12 %
3%
1%

HOW STRONGLY WILL THE

CUSTOMER RECOMMEND
THIS BANK TO KNOWN
PEOPLE?
VERY STRONGLY
PROBABLY
NEVER

XPERIENCE BRANCH

NON EXPERIENCED
BRANCH

54 %
31 %
15 %

51 %
45 %
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.

35

CHAPTER IV
LIMITATIONS OF THE
STUDY

36

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

37

CHAPTER V
FINDINGS AND
RECOMMENDATIONS

38

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.
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.

39

RECOMMENDATIONS
The staff should be adequately trained to deal with the customer on one to one basis in
Non-experience Branches.
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.
Customers 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.

40

BIBLIOGRAPHY
Books:

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

41

QUESSTIONNAIRE NON- EXPERIENCE BRANCHES

Location & Accessibility of the branch (EXCELLENT/GOOD/AVERAGE/POOR/DNT
KNW)
Speed & Efficiency of Services (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)
Cash Transactions
Getting a cheque book
Getting the passbook updated
Obtaining a demand draft
Getting timely credit for cheques deposited
Opening/Closing/Renewal of Term Deposits Accounts
Opening of an account(SB/CA)
Operation of Locker
Employee Responsiveness (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)
Feeling of being welcomed in the branch
Product knowledge of branch staf
Getting attended promptly at the counter
Advice and guidance on suitable products & services
Encouraging usage of technology oriented products & services
Customer Orientation at the Branch Level
(EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)
Sitting arrangement for waiting customers
Ambience & overall attractiveness
Arrangement for receiving complaint/suggestion
Response to complaints made to branch officials
Display of interest rates & service charges
Display of requirement for opening of an account
Ofering non-banking transactions after business hours
Ofering uninterrupted customer service continuously
Administrative & Supervisory Efectiveness (ALWAYS/MOSTLY/RARELY/NEVER/DNT
KNW)
Availability of forms for transactions
Availability of brochures for schemes
Information in advance to customers about service charge & penalty deductions
Proper response from other branches in the core banking scenario
New Products & Services(y or n, if y then experienceEXCELLENT/GOOD/AVERAGE/POOR)
Debit/ATM Card
Credit Card
Internet banking
Mobile banking
RTGS/NEFT
Demat Account
Third Party Products
42

Does 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,advertisement
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/NEVER)
your suggestions for improving customer service in the bank/Any complaints
Customer profile
name of the customer
Account no.
customer since(appx. Years)
mobile no.
email id
Age
Sex
product /service being availed
Occupation
appx. 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 Transactions
Getting a cheque book
Getting the passbook updated
Obtaining a demand draft
Getting timely credit for cheques deposited
Opening/Closing/Renewal of Term Deposits Accounts
Opening of an account(SB/CA)
Operation of Locker
Employee Responsiveness (EXCELLENT/GOOD/AVERAGE/POOR/DNT KNW)
Feeling of being welcomed in the branch
Product knowledge of branch staf
Getting attended promptly at the counter
Advice and guidance on suitable products & services
Encouraging usage of technology oriented produucts & services
Customer Orientation at the Branch Level (EXCELLENT/GOOD/AVERAGE/POOR/DNT
KNW)
Sitting arrangement for waiting customers
Ambience & overall attractiveness
Arrangement for receiving complaint/suggestion
Response to complaints made to branch officials
Display of interest rates & service charges
Display of requirement for opening of an account
Ofering non-banking transactions after business hours
Ofering uninterrupted customer service continuously
43

Administrative & Supervisory Efectiveness (ALWAYS/MOSTLY/RARELY/NEVER/DNT

KNW)
Availability of forms for transactions
Availability of brochures for schemes
Information in advance to customers about service charge & penalty deductions
Proper response from other branches in the core banking scenario
New Products & Services(y or n, if y then experienceEXCELLENT/GOOD/AVERAGE/POOR)
Debit/ATM Card
Credit Card
Internet banking
Mobile banking
RTGS/NEFT
Demat Account
Third Party Products
Does 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,advertisement
rate the following self operated services in the branch
(EXCELLENT/GOOD/AVERAGE/POOR)
ATM
Phone Banking (union reach)
self service pass book printer
Cash deposit machine
cheque deposit machine
POS Terminal
Kiosk'( 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 services
responsiveness & courtesy of staf
Space & amenities for customer convenience
Ambience & look
what acc. To you is the uniqueness of "Union experience" branch
your 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 complaints
Customer profile
name of the customer
Account no.
customer since(appx. Years)
mobile no.
44

email id
Age
Sex
product /service being availed
Occupation
appx. Annual family income

45