The interest is largely driven by the realization that high service quality results in customer satisfaction and loyalty with the product or service, greater willingness to recommend someone else, reduction in complaints and improved customer retention (Zeithaml et al., 1996). Further, a satisfied customer is likely to be a loyal customer who will give repeating business to the bank (Heskett et al., 1994). Most importantly, the cost of retaining current customers by improving product and services is significantly lower than the cost of winning new customers. Because of the importance of the service quality and customer satisfaction as a route to competitive advantage and corporate profitability in banking, it has become difficult to identify a single bank which has not initiated some kind of service quality improvement
Thus, Khattak and Rehman (2010) concluded that it lead the bank to pay special observation to customer satisfaction. The quality of service is the only useful method bank can utilize in order to sustain in the market as in reality all the banks sell similar products (Stafford, 1996). Banks that provide excellence service quality have a competitive advantage as they will earn large market shares as stated by Bowen and Hedges (1993). Furthermore, it will raise the bank’s reputation and the increase number of new customers will definitely lead to increase in bank’s financial performance (Zeithmal et al, 1996). Yeung et al (2002) also bring up that it will reduce the cost of marketing as new customers are introduced by the existing customer into the bank by word-of mouth.
Termination of Bank Customer Relationship Bank and Customer relationship: The transactional relationship between a banker and a customer depends on the activities and the services provided the customers. Bank’s business depends much on the strong bondage with the customer. The most important factor in building healthy relationship between a banker and customer is trust. Sec.5(c) of Banking Regulation Act defines "banking company" as a company that transacts the business of banking in India. Since a banker or a banking company undertakes banking related activities we can derive the meaning of banker or a banking company from Sec 5(b) as a body corporate that: (a) Accepts deposits from public.
With the saying “money is one form of power, but what is more powerful is financial education” from the book Rich Dad, Poor Dad my passion for Accounting and Finance was ignited. It taught me that money comes and goes, but with the education about how money works, you gain power over it and can begin building wealth. Accounting is a language to all businesses that opens doors to many opportunities. Many do not understand it and are caught up in the “rat race”, working for money but those who are financially literate, are able to make money work for them instead. This opened up my eyes to the wonders of accounting and finance and fuelled my passion to pursue a degree in accounting and finance.
A number of studies have been conducted in India and abroad to study the various aspects of performance measurement in the banking sector. These studies have been reviewed critically with a view to understand the objectives of these studies, research methodology, research findings, etc. and to identify the gap that exists in the literature in this area. The analysis of banking performance has received a great deal of attention in the banking literature. A common framework used by supervisors is the CAMELS framework, which uses basic financial ratios to help evaluate a bank’s performance (Yue, 1992 various studies includes the use of financial ratios to analysis the banks’ performance appraisal, including Beaver (1966), Atman (1968), Maishanu
Institution’s generate trust from the profits created by lending funds at a higher rate than the return paid to depositors. Given that ultimate lenders are looking for low risk and security, trust and confidence in the bank is extremely important. In addition, financial Institution allow depositors access to funds under agreed terms, with a fixed rate of return and low costs, in the main. This security allows depositors to plan for the future with the knowledge of what to expect from their investment. Another benefit to the ultimate lender of financial intermediation is that they do not have to take on the risk of the financial concept known as Asymmetric Information.
You’re repeatedly spending time on inefficient processes such as re-entering information. You’re continuously hiring staff for accounting purposes and it would cause many costs. Chosen well, following are few advantages of using an accounting software for a business: • Speed of accounting– data entry onto the computer with its formatted screens and built-in databases of customers and supplier details and stock records can be carried out far more quickly than any manual processing. • Automatic document production – fast and accurate invoices, credit notes, purchase orders, printing statements and payroll documents are all done automatically. • Accuracy of accounting – there is less room for errors as only one accounting entry is needed for each transaction rather than two (or three) for a manual system.
The objective of banking companies is to have more efficient and effective utilization of resources where they can get maximum profits with lowest cost. Efficiency is a level of performance that describes the process of utilizing all resources production at lowest measure to produce a large sum of finished goods or services. The concept of efficiency is comparing the inputs and outputs where the resources that used to be goods or services are input; meanwhile the results from all resources that have been used including time and energy are called output. Banking companies should provide goods and services more efficiently by focusing more attention on controlling the cost. Cost control must be the main strategy of banking companies and that
Therefore, commercial banks not only need to be profitable, but also efficient. The reduction in spreading between lending and deposit rates is the basic benefit of enhancing the efficiency. Through the banking system, it will stimulate both greater loan demand for investment and greater recruitment of financial savings (Izah, 2009). The measurement of banking efficiency helps banks to remain competitive, profitable and viable, in an otherwise highly regulated in the banking industry. Das, Nag and Ray (2005) indicate that measurement of banking efficiency serves two important purposes.
RBI’s new measures may go a long way in helping the restructuring of the domestic banking industry. Structure of Indian Banking Industry Banking industry in India functions under the sunshade of Reserve Bank of India- the regulatory, central bank. Banking Industry mainly consists of: • Commercial Banks • Co-operative