Service Quality in Banking Sector in India – A Theoretical Framework

Abstract

The services sector is the most important sector, which contributes largely to the national economy. In India, the banking service is an important component of services sector. The share of banking and insurance sector within the services industry has burgeoned from 2.78 per cent of Gross Domestic Product in 1980-81 to 6.27 percent in 1997-98. It has been so due to the increased significance of financial services in post-reforms era. Inthe recent years the presence of a number of private sector and foreign banks has made the Indian Market more competitive. Increasing competition has forced the banks to think of better ways and means of generating revenues from different sources, other than conventional borrowing and lending services. The onset of competition from the private players and initiation of banking reforms since early 1990s have led to an increased emphasis on efficient customer service. Moreover, in the tough competitive arena in which these banks operate today, maintaining the quality of service is a pre-requisite for survival. Therefore, measurement of service quality has increasingly created an interestamong the banks and scholars alike.