CUSTOMER SATISFACTION IN NEPALESE BANKING INDUSTRY

BY

PRAKASH BIDARI

A Summer Project Report Submitted to

Faculty of Management, Tribhuvan University

In partial fulfillment of the requirements for the degree of

Bachelor of Business Administration

At the

SainikAwasiyaMahavidhyalaya

Tribhuvan University

Bhaktapur

April 2017

1
 Student Declaration

This is to certify that I have completed the Summer Project entitled ‘Customer
Satisfaction in Nepalese Banking Industry’ under the guidance of ‘ Ram Singh Budal’ in
partial fulfillment of the requirements for the degree of Bachelor of Business
Administration at Faculty of Management, Tribhuvan University. This is my original
work and I have not submitted it earlier elsewhere.

April, 2017Prakash Bidari

2
 CERTIFICATE FROM THE SUPERVISOR

This is to certify that the summer project entitled ‘Impact Job Satisfaction on
Organizational Commitment’ is an academic work done by ‘Mr. Prakash Bidari’
submitted in the partial fulfillment of the requirements for the degree of Bachelor of
Business Administration at Faculty of Management, Tribhuvan University under my
guidance and supervision. To the best of my knowledge, the information presented by her
in the summer project report has not been submitted earlier.

Ram Singh Budal

Supervisor

April, 2017

3
 ACKNOWLEDGEMENT

The research on “Customer Satisfaction in Nepalese Banking Industry” was given to me

as a part of the curriculum in the seventh semester of Undergraduate degree in Business
Administration.

I would like to express my sincere gratitude to Mr. Ram Singh Budal our BBA
coordinator and acknowledge his esteemed scholarly guidance, assistance and knowledge
without which I would not have been able to complete this work timely and fruitfully.

Similarly, I would like to thank Mr. Binod Ghimire, of Sainik Awasiya Mahavidhyalaya
for their academic assistances.

I have tried my best to present the information as clearly as possible using basic terms
that I hope will be comprehended by wide spectrum of researchers, analysts and students.

Prakash Bidari

April, 2017

4
 ABBREVIATIONS

OC Organizational culture

ATM Automated teller machine

Ei Error term

SS Service security

SC Service charge

EOU Ease of use

N Number

Std. Dev Standard Error of Estimate

SA Strongly Agree

SD Strongly disagree

F Frequency

NRB Nepal Rasta Bank

NTC Nepal Telecom

BOC Behavior of customer

F F-statistics

5
 TABLE OF CONTENTS

Student Declaration i

Certificate from the Supervisor ii

Acknowledgement iii

Abbreviations iv

List of Tables vii

List of Figures viii

Executive Summary ix

Chapter I: Introduction 1

1.1. 12
1.2. 17
1.3. 17
1.4. 18
1.5. 18
1.5.1. 18

1.5.2. 22

1.6. 24
1.6.1. 25

1.6.2. 25

1.6.3. 28

6
Chapter II: Data Presentation and Analysis 17

2.1. 29
2.1.1. 29

2.2. 32
2.3. 38
2.3.1. 38

2.3.2. 40

2.3.3. 42

2.3.4. 43

2.3.5. 46

2.4. 47
Chapter III: Conclusion and Action Implications 35

3.1. 50
3.2. 50
Appendix A

References F

7
 LIST OF TABLES

1.1 Review of major studies 13

1.2 Review of recent studies 14
1.3 Review of Nepalese studies 16
2.1 Organizational culture 28
2.2 Ease of use 29
2.3 Service charge 31
2.4 Service security 32
2.5 Customer satisfaction in Nepalese banking industry 36

8
 LIST OF FIGURES

2.1 Gender wise classification of respondents 19

2.2 Age wise classification of respondents 20
2.3 Academic wise classification of respondents 21
2.4 Occupation wise classification of respondents
2.5 Frequency of respondents who experience of some kind of problem 234
while using banking service
2.6 Frequency of respondents who are being helped or not 24
2.7 Frequency of respondents who compliant against while taking 25
banking service
2.8 Frequency of respondent who satisfied while taking banking service 26
2.9 Frequency respondents who offer the competitive interest rate while 26
taking banking service
2.10 Frequency respondents who take core banking facilities 27
2.11 Frequency respondents who take caters while taking banking 27
service
2.12 Frequency respondents who maintain different types of account 28
2.13 Frequency respondents regarding most important facilities provided 29
by banks
2.14 Frequency respondents who think about banks 10

9
 EXECUTIVE SUMMARY

Customer satisfaction is always something more than a happy customer. It is broadly

used in commerce and business sector. Customer satisfaction is a term used in business
explaining about the quality of product and service that are being provided by companies
so as to fulfill the need of their customers. It is also a key performance indicator of
company. It has also been noted that satisfied customers are the core element in long-
term success of business (Kennedya&Schneiderb, 2000). Returns of the companies are
seen to have a highly positive relationship with strong base of satisfied customers
(Yeoung, 2002). Customer satisfaction is a key factor in formation of customer’s desires
for future purchase (Anderson &Mittal 2000,). Furthermore, the satisfied customers will
probably talk to others about their good experiences. This fact, especially in the Middle
Eastern cultures, where the social life has been shaped in a way that social
communication with other people enhances the society, is more important (Jamal
&Naser, 2003).

The major purpose of this study is to analyze the determinants of customer satisfaction of
the Nepalese banking industry. The specific objectives of this study are: (a) To find out
the major problems of Nepalese banking industry while delivering their service to their
customers. (b) To analyze the reasons behind customers’ satisfaction or dissatisfaction.
(c) To determine the factor that help customer to stay longer in the concerned bank. (d)
To investigate the perception of the customers regarding the service provided by
Nepalese banking industry. (e) To examine whether customer satisfaction has any impact
on the bank financial performance or not.

This study is based on primary source of data, which is gathered from 100 customers of
Nepalese banking industry. The study is based on descriptive as well as causal
comparative research design to analyze the relationship between customer satisfaction
and organizational culture, ease of use, service charge and service security. Survey
method is used for this study using questionnaire as data collection instrument. The
structured sets of questionnaire, Likert scale questions, yes/no questions multiple choice
questions were asked to get insight of customer satisfaction in Nepalese banking industry.
The customer satisfactions are service security, service charge, ease of use and
10
organizational culture. The weighted mean of the each variable were used to examine the
relationship between customer satisfaction and organizational culture, ease of use, service
charge and service security.

The result revealed that there is a positive relation between customer satisfaction and all
its determinants organizational culture, ease of use, service charge and service security.
The coefficients of beta are positive and significant for all determinants at 5 percent level
of significance. Of the entire selected variable, the most important determinant of
customer satisfaction is service charge followed by ease of use, organizational culture
and service security. The study found that service charge by the bank play a major role in
yielding the satisfaction to the customers. Ease of use is the essential factor for customer
satisfaction of Nepalese banking industry while choosing banking service purpose. The
result showed that the majority of the respondents are not satisfied with their respective
banks as the majority of respondents viewed that there is no bank in Nepalese banking
industry that delivers them highest level of customer satisfaction. The study revealed that
yet the customers of Nepalese banks are facing the problems regarding ATM service,
organizational culture, internet banking service, slow response from the bank, difficultly
while opening and closing of accounts.

The major conclusion of the study is that satisfied customers are the valuable assets of
banking organization as it is much more difficult to attract new customer than to retain
old respondents. This study found that the respondents are neither highly satisfied nor
highly dissatisfied with the Nepalese banking industry. They are not getting the optimum
level of satisfaction. Their satisfaction somehow is being compromised.

11
 CHAPTER I: INTRODUCTION

1.1.Context Information

The concept of customer satisfaction has drawn the attention of actioners and academics
from last several years based on the fact that customers are the primary source of profit
for most of the firms operating in the market (Tam, 2004). According to Churchill and
Surprenant (1982), customer satisfaction is an outcome of purchase and use resulting
from the buyer’s comparison of the rewards and costs of the purchase in relation to the
anticipated consequences. It is also defined in terms of an emotional state that usually
arises in response of evaluating a particular service (Westbrook, 1981). The former
concept highlights the fact that satisfaction is determined through a cognitive procedure
by comparing what customers give up to get a service (cost) and what they receive in
response (reward) however the later concept takes satisfaction as an emotional feeling
that results during the process of evaluation (Tam, 2004). Consistent with this concept,
we can say that customer satisfaction is defined as an emotional response, which results
from a cognitive process of evaluating the service received against the costs of obtaining
the service (Woodruff, 1991). Customer satisfaction facilitates the measure of how
service and products provided by company meet customer expectation. It is a key
performance indicator in business terms. Typically, service firms monitor and examine
the satisfaction level of customers on an ongoing base by using different scales like likert,
to measure the level of customer satisfaction which is mainly based on service encounter
experienced on their last visit (Peterson & Wilson, 1992).

Quality and customer satisfaction both have long been recognized as crucial role for
success and survival in today’s competitive market. Considerable evidence exists in
literature that supports relationship between company’s performance and level of
satisfaction reported by customers (Anderson, 1994; Bolton, 1998). Therefore, it is
argued that customer satisfaction should be considered the ultimate goal for all firms
(Morgan, 2005; Mittal, 1999). Empirical evidences has supported that customer
satisfaction reduces the likelihood of defection and/or is positively related with retention
(Anderson & Sullivan, 1993) repurchase intention (Mittal,1999) and loyalty

12
(Oliver2009). Bosh and Gray (2004) mentioned that satisfaction is not inherent in service
of product. But satisfaction is mainly present in consumer’s perception of the service or
product attributes that relates to the specific individual. Therefore, different customers
will express different levels of satisfaction for the same service encounter or experience
(Ueltschy, 2007).

Customer service proves to be one of the most important factors governing business.
Today business organizations are more customers-focused than ever before since
customer satisfaction is a competitive advantage which is sustainable over the long term
(Schnaars, 1991). The business organizations to create healthy customer relationships
should always focus on listening to customers’ expectations, requirements, complaints
and needs. Making polite suggestions, delivering promises and taking extra effort such as
building an efficient customer service team are the right practices to retain them for a
long period. Satisfied customers mean a long term profitable business since they stay
loyal to the business. (Gumesson,2002).

Customer satisfaction in the banking industry plays a vital role to create a healthy
business status being service based industry. In any service based industry customer
service is at highest priority. Customer service can be provided by well-trained person in
planned systematic manner or can be provided by means of well-planned self-service. In
banking industry customers are more directly linked with the banks’ personnel for any
kind of services or products. Therefore, Banks should always focus on training its front
desk staffs to provide quality service knowing their expectations and wants.

Theoretical framework of this research is centered to service quality created by satisfied

employee to meet up customers’ expectations. The study employs Gap Model of
Customer Satisfaction to find out the gap between customers’ perception and expectation,
Herzberg two factor theories to find the level of employee satisfaction analyzing their
different motivational and de-motivational factors, Profit chain Model to show the
relationship between satisfied employees and created quality service to meet customers’
expectation and ISO Guideline to show and measure different attributes of customer
satisfaction.This studyaims to find out different motivational and hygienic factors that

13
keep employees always motivated to create quality service. The customers are satisfied if
their expectations meet perception.

Satisfaction focuses a conscious and deliberate evaluation of outcomes (Engel &

Blackwell,1982). If expectations are matched the outcome of course is satisfaction. When
alternative is perceived as falling short in significant ways, dissatisfactions the result.
Satisfaction and dissatisfaction, of course, represent extreme points on a continuum. High
satisfaction or dissatisfaction also is a motivation for sharing with others (Engel,
Blackwell&Miniard, 1990).Many theoretical frameworks have been applied to explain
customer satisfaction. The most prominent paradigm is expectancy disconfirmation
paradigm from social psychology. That paradigm holds that consumers form expectation
of products or services prior to their purchase. These expectations are then either
confirmed or disconfirmed after the product or service is purchased or used (Schnaars,
1991). There are many ways to improve customer satisfaction. Some strategies are:
building relationships with customers, superior customer service, unconditional
guarantees, efficient complaint handling. Customer satisfaction leads to competitive
advantage in market place by differentiation, product quality, speed, unified corporate
purpose etc. (Schnaars, 1991).

The service management literature argues that customer satisfaction is the result of a
customer’s perception of the value received in a transaction or relationship where value
equals perceived service quality relative to price and customer acquisition costs
(Blanchard & Galloway, 1994; Heskett, 1990) relative to the value expected from
transactions or relationships with competing vendors (Zeithaml,1990).Customer
satisfaction surveys are now increasingly administered by many service industries.
Growth of service industries compared with manufacturing industries and the demand for
total quality management for both industries has increased customer satisfaction survey.
Along with the increased research in customer satisfaction has been a corresponding
increase in the diversity of measurement scales used in customer satisfaction surveys
(Devlin, 1993).

A review of the literature revealed over 40 different scales used to measure consumer
product or service satisfaction, from retail to airline settings (Haddrell, 1994). With such
14
a large number of alternative scales available. Almost all studies of customer satisfaction
share a common characteristic that has been noted by a number of researchers (Oliver,
1981; Peterson &Wilson, 1992; Westbrook, 1980; Yi, 1990). That is, virtually all self-
reports of customer satisfaction possess a distribution in which a majority of the
responses indicate that customers are satisfied and the distribution itself is negatively
skewed (Peterson & Wilson, 1992).

Peterson and Wilson (1992) offered various explanations for this phenomenon. These
include: (1) individuals could in fact be very satisfied with what they consume and
purchase; (2) satisfaction is caused by factors (such as expectations, performance),
therefore its antecedents may influence the shape and level of the observed distributions
(Bearden & Teel, 1983; Cadotte, 1987; Oliver, 1980);(3) satisfaction may possess a
distribution that is different from what we know as a normal distribution; and (4) the
level and shape of customer satisfaction ratings are a function ofthe research
methodologies employed.These relationships are important sourcesfor improved
performance in the banking sector because they help to reduce costs, increase quality,
improve products and services, bring in useful knowledge that assist in product
innovation and create long-term customer loyalty (Gritti& Foss, 2010).Service quality
has a significant impact on a bank’s success and performance (Mouawad&Kleiner,
1996). Service quality is particularly essential in the banking services context because it
provides a high level of customer satisfaction, and hence it becomes a key to competitive
advantage (Ahmossawi, 2001).

Parasuraman (1988) defined service quality as a difference between customer expectation

of service and customers’ perceptions of the actual service. Kasper (1999) defined service
quality as the degree to which the service offered can satisfy the expectations of the user.
According to these definitions, customers are the sole judges of service quality. If they
perceived good service, they became satisfied with the service quality by comparing their
expectations with perception. Today, the quality of products and services consumed has a
great importance in the business world. Aga and Safakli (2007) stated it is widely
accepted that surviving in difficult and competitive conditions of a market economy
requires good quality production as well as services. To understand and assess the results

15
of efforts realized, quality of production should be measurable. While the quality of
goods can easily be measured by taking into account of certain physical properties, the
measurement for services is rather difficult because the quality in this case depends on
large number of factors (Aga &Safakli, 2007).

While there have been efforts to study service quality, there has been no general
agreement on the measurement of the concept. The majority of the work to date has
attempted to use the SERVQUAL (Parasuraman, 1985) methodology in an effort to
measure service quality (Brooks, 1999; Edvardsson, 1997; Lings & Brooks, 1998;
Reynoso & Moore, 1995; Sahney, 2004). SERVQUAL is also started to be applied for
accounting and auditing firms (Kang & Bradley, 2002; Keng& Liu, 1998; Armstrong &
Smith, 1996; Hong & Wu, 2003). Regarding Northern Cyprus no study measuring
service quality of accounting firms is encountered. In this respect, the purpose of this
study is to assess customers’ perceptions of service quality with an accounting service
firm. These studies investigate the quality of services provided to clients of local
accounting firms in Nepal using SERVQUAL.

In context of Nepal, Rijal (2006) examined that different branches of the similar banks
have adapted different strategy and few of the banks have followed more than one
strategy at the same time. The majority of Nepalese banks are offering different types of
services to their customers through different branches established at different
geographical locations. The study showed that the priority of the majority of Nepalese
banks is to retain customers. Dhital and Gautam (2004) found that customers were most
satisfied with the second generation joint-venture banks where they had to spend less
time waiting and also where the employee’s behavior was good.

Sherpa (2013) found that banks focusing on customer satisfaction are more likely to
improve profitability. The study also found that the electronic banking in Nepal did not
create any significant impact on service delivery. To be more specific, the study found
that customer were found satisfied with those banks where customers had to spend less
time on waiting and the employees’ behavior is good.

16
The above discussion shows that the studies dealing with customer satisfaction are of
greater significance. Though there are these findings in the context of other countries, no
such findings exist in the context of Nepal. Hence, this study focused on analyzing the
determinants of customer satisfaction in Nepalese commercial banks.

1.2.Purpose of the study

The major purpose of this study is to examine the Customer satisfaction in Nepalese
banking industry.

● To find out the relationship between ‘organizational culture’ and customer

satisfaction in Nepalese banking industry.
● To investigate the relationship between service charge and customer satisfaction in
Nepalese banking industry.
● To examine the service security and customer satisfaction on Nepalese banking
industry.

1.3.Significance of the Study

The significance of this study is to examine how customer gets satisfied in the bank and
to discover the level of customer satisfaction in Nepalese banking industry. The topic is
relevant in today’s organizational culture which effects the customer satisfaction. It is
important that employees take the subject into consideration as company culture plays
important role in customer satisfaction and should give more importance to it. The
findings of this study can assist administrator, policy makers to understand the customer
expectations from the Banking organization from the perspective of organization. Efforts
can be made to understand customer need and increase relationship among company
culture and its customer. Perception of customer towards organization and their positive
thinking is important to increase customer satisfaction and better organizational output at
large. This study examines whether satisfied customer have different level of expectation
or not. The present paper measures the customer satisfaction with the help various
descriptive analysis and an attempt has been made to see the factor-wise effect the
customer satisfaction. The future academic endeavors might make use of the present

17
study as a stepping-stone for further exploratory and confirmatory research toward a
more complete understanding of customer satisfaction in Nepalese banking industry.

1.4.Limitation of the Study

The major limitations of the study were as follows:

● The study was predominantly based on primary source of data regarding the influence
of Nepalese banking industry service on customer satisfaction. Therefore, the
reliability of the results of the study depends on how much the information provided
by the respondents is accurate.
● The sample size in this study was only from the customer of Nepalese commercial
banks. It did not include the customers of other banks such as development banks,
micro finance, cooperatives etc.
● The survey was conducted within Kathmandu valley. Hence, the study did not
incorporate respondents from all over Nepal.
● The study was based on the assumption of linear regression between the dependent
and independent variables. The study excluded the non-linear regression assumptions.
● Respondents are not equally divided on the basis of the gender. But due to limited
access to females there is gender biasness. But perhaps the result is different if the
accessibility is free to the females.

1.5.Literature Survey

A literature review is a concise overview of what has been studied, argued and
established about a topic. It also entails about the major findings by the previous studies.
This section includes review of related literature.

1.5.1. Review of major studies

Parsuraman and Berry (1988) investigated factors affecting customer satisfaction in the
context of India. The study used descriptive research design and the data are collected
through the questionnaire. The information is gathered from the different customers of
the two banks, viz., State Bank of India and ICICI Bank located in the district Aligarh,
Uttar Pradesh. Fifty bank respondents from each bank were contacted personally in order
to seek fair and frank responses on quality of service in banks. The service quality model
developed by Parsuraman and Berry (1988) has been used. The study found that there

18
exists wide perceptual difference among Indian (public sector) banks regarding overall
service quality with their respective customers, when compared to Private sector banks.
Whereas the said perceptual difference in private banks is narrow.

Schwert (1989) stated that service quality have become a principal competitive weapon in
the banking industry. Services are intangible and are also not easily duplicated. Quality
on the other hand, is differentiable and stems from the expectations of the customers.
Hence, it is necessary to identify and prioritize the customers’ expectations for service
quality and incorporate these expectations into a service process for improving quality.
The key variables in meeting customer expectations begin with identifying the specific
characteristics of service quality as perceived by the customer who defines the nature and
importance of service quality. All the four service quality offering variables will
influence the overall service quality. Factor analysis revealed four factors and results of
analysis of variance (SNOVA) indicated that while age, gender, occupation have no
significant effect on customer satisfaction of service quality and qualification differs
significantly.

Lewis (1994)examined Banks are increasing their technology-based service options to

remain competitive. Automated teller machine (ATM) one of the service. Number of
ATM cardholders is increasing and is increasing rate in future in Nepal. As service
providers all banks should know how their regard is rare in Nepal and there is still a gap,
which this study wishes to fulfill. This study is conducted to draw a profile of urban
ATM cardholders, know the level of their awareness about ATM service, and identify the
problems and prospects regarding the use of ATMA semi-structured questionnaire was
developed to collect data about the habits and perceptions of the customers, after proper
literature review. Data were analyzed and presented in the tabular/graphical form for easy
understanding and elaboration of the findings of this study. Based on the findings, some
suggestions and recommendation were made that could be useful for the banks.

MouawadandKleiner (1996)analyzed the impact of service quality on customer

satisfaction in Nepalese Commercial Banks.The study used a descriptive and analytical
research design. Using primary data from a survey, the study used related dimensional
service quality, tangible dimensional service quality and core service quality as
19
dimensions of service quality. Correlation and multiple regression analyses were used to
examine the impact of service quality on customer satisfaction.The related dimensional
service quality and tangible dimensional service quality have no significant impact on
customer satisfaction respectively. But core service quality has a significant impact on
customer satisfaction. Provide quality service for customer satisfaction could be a good
implication for the management and board of directors to enhance the performance of
Nepalese banking sectors.

Bahia and Nantel (2000) conducted a study in Canada in order to develop a reliable and
valid scale for the measurement of the customer satisfaction of Nepalese banking
industry. A sample of banking industry customers’ was questioned. The proposed scale is
called banking service and comprises with four dimensions: organizational culture,
service charge, ease of use and service security.

Chakrabarty (2006) analyzed customer satisfaction provides a platform for companies to

enhance relationships with their customers thus enabling the companies to achieve their
objectives for long-term success. This study investigates the current pattern of customer
satisfaction in the Kenyan banking industry. A questionnaire survey was administered to
403 bank customers of the top five banks in Kenya. Software SPSS 22.0 was used to
analyze the data gathered from the survey. The results of the analysis demonstrate that
the overall level of customer satisfaction is more than 60percent. The results also
demonstrate that the most important factor for customer satisfaction is the wide
availability of bank branches, and the factor most associated with customer
dissatisfaction is the high prices of products and services. In addition, the results depicted
that both satisfaction and dissatisfaction partially influence the number of banking
products and banks that clients choose to open accounts with. The study further gives
suggestions for policymaking and possible areas for future research.

Mokhlis (2008)defined that retail bank patronage have been a topic of interest to
marketing researchers since late 1960s, the attraction between banks and undergraduate
segment has received little interest from marketing academics. This paper analyzed the
factors considered important by undergraduates in Malaysia in selecting a bank and to
examine whether undergraduates constitute a homogeneous group in relation to the way
20
they select a bank. Results of the factor analysis for the total sample indicate that the
bank selection decision is based primarily on nine selection criteria. Secure feelings were
the most important factor in influencing the students in selecting a bank. ATM service
was the second prioritized factor followed by financial benefits. The next three criteria,
ranked fourth, fifth and sixth, respectively, were service provision, proximity and branch
location that can be grouped as moderate factors. By contrast, the students considered
non-people influential, attractiveness and people influences which were ranked seventh,
eighth and ninth, respectively, did not play significant roles in influencing their decision
in selecting the bank. It is interesting to note that the responses did not constitute a
homogenous group since gender, stream of study; ethnicity and number of saving
accounts held produced different prioritized factors in bank selection.

Service quality is a significant determination of customer behavior. Service quality and

transaction specific quality are significant determinant if both complainant behavior and
dis/satisfaction of a customer. But, transaction specific quality was not found to be a
significant predecessor of word of mouth behavior and repurchase intention. Moreover,
this study indicates that, repurchase intention can’t be affected by transaction specific
service quality but can be affected by overall service quality. In addition, overall service
quality is not a predictor of complaint behavior and dis/satisfaction. While, overall
service quality was not a significant predictor or word of mouth, overall service quality
can affect word of mouth behavior by the mediation of repurchase intention
(Ozer&Basgoze, 2014).

Abdullah (2014) stated that banking facilities exert a significant positive influence on
customer perception whereas employees’ courtesy does not. The findings of the study is
that positive attitudes towards a retail bank are driven by service quality components,
such as the employee-customer relationship, as well as other features and benefits of
service. This study also shows that a service problem which is not resolved has a
substantial impact on the customer’s attitude towards the service provider. The findings
of the present study are expected to hold significant implications for the managers in the
retail banking sector in enhancing the service quality and customer perception. The study
also reveals that the mist obvious implication considering banking service providers to

21
further improve their services quality with greater efficiency and as a way to better
compete in the current marketplace.

Tavanzadeh and Aligholi (2014) conducted a study on service quality dimensions and
customers’ satisfaction and try to explain customers’ satisfaction concept considering the
impact of service quality dimensions on customers’ satisfaction. The study was based on
descriptive- survey study and sampling method was systematic random sampling. The
results of the study showed that all dimensions of service dimensions have positive and
significant relationship with customer satisfaction.

The study on interrelationships among service quality dimensions and customer loyalty in
the retail banking sector in Kenya found the positive relationship between all the service
quality attributes and customer loyalty. The study established that there is a direct
relationship between delivery of service quality and customer loyalty. Further the study
found that fulfilling customers’ requirements is the key to a competitive advantages and
long tern success in a highly competitive environment. Commercial bank management
has to makes sure that thing s are done right the first time and to ensure that the promises
made to customers kept in terms of service delivery. The study has shown that customers
are looking for banks that keep their promises, provide prompt service and have
employees that are competent and always willing to help to the customers (Auka, 2013).

1.5.2. Review of major Nepalese studies

Gautamand Dhital (2004)identified customer satisfaction is a long-term strategy. As it is

difficult to radically alter perceptions of product quality over a short time horizon so it is
too difficult to quickly cultivate a reputation for superior customer service.

Bhatta (2010) examined the customer satisfaction is a key of profitability and it implies
the retention of the customers for the long term which is better than attracting the new
customer. Now a day’s banks have realized that cost of attracting a new customer is much
more than retaining existing customers. So banks are emphasizing more upon customer
satisfaction. These days customers demand for top quality services and products served
with minimum wait time. On seeing today’s age of banking revolution, in terms of

22
banking services provided by banks the current research paper attempts to make a
comparative analysis of the level of customer satisfaction towards banking services.

Dhakal (2012) studied the level of customer satisfaction for Nepalese banking industry.
The study was focused to reveal the expectations of customers which could be crucial for
Nepalese banking industry growth and success.The study indicated that the overall level
of satisfaction among the customers of Nepalese banking industry is quoted well however
not yet excellent. Likewise, employee motivational factors should be emphasized and
take into actions in order to improve the satisfaction level of staffs to enhance the quality
of services and products customer education, employee training programs and several
researchers are highly recommended.

Shrepa (2013) examined the impact of customer satisfaction in Nepalese commercial

banks with 100 respondents. The study found that banks focusing on customer
satisfaction are more likely to improve profitability. It also stated that customer
satisfaction is positively correlated with profitabilityin Nepalese banking industry. The
study further found that the electronica banking in Nepal did not create any significant
impact on service delivery. To be more specific, the study found that customer were
found satisfied with those banks where customers had to spend less time on waiting and
the employees behavior was good.

Prajapati (2014) found the determinants of customer satisfaction in Nepalese banking

industry. The study showed customers were found to be less service charge, service
security and ease of use. This study found that factor such as organizational culture, ease
of use and service charge factors influence more in satisfying customers that factors such
as organizational culture, ease of use, service charge and service security. Service charge
is regarded as the most important positive and significant determinant, followed by
organizational culture, ease of use and service security in Nepalese banking industry.

Gyawali and kunwar (2014) stated that high level of satisfaction could translate into
profits whereas low level of satisfaction means customers are more likely to shift in favor
of competitors. This study is based on customer satisfaction over organizational culture,
service charge, service security and ease of use in Nepalese banking industry. The major

23
objective of this study was to examine customers’ satisfaction about Nepalese banking
industry and their satisfaction over four independent variables organizational culture,
service charge, ease of use and service security.

Pradhananga (2014)aimed to analyze the impact of service quality on customer

satisfaction in Nepalese Commercial Banks. The study used a descriptive and analytical
research design. Using primary data from a survey, the study used related dimensional
service quality, tangible dimensional service quality and core service quality as
dimensions of service quality. Correlation and multiple regression analyses were used to
examine the impact of service quality on customer satisfaction. The related dimensional
service quality and tangible dimensional service quality have no significant impact on
customer satisfaction respectively. But core service quality has a significant impact on
customer satisfaction. Provide quality service for customer satisfaction could be a good
implication for the management and board of directors to enhance the performance of
Nepalese banking sectors.

1.6.Research Methods for Data Collection and Analysis

Research methodology is a science of studying how research is to be carried out. It is the

study of methods by which knowledge is gained. It is a systematic way to solve a
problem which aims to provide the work plan of research. In other words, research
methodology describes the methods and process applied in the entire aspect of the study;
and provides a basic framework on which the study is based. Before presenting the
analysis and interpretation of data, it is necessary that research methodology be described
first because conclusions drawn may be misunderstood in case if there is absence of
research methodology.

This section represents research design which describes the research methods, sampling
techniques and the instruments employed in the data gathering process. This chapter has
been divided into five sections. Section one provides research plan and design used in the
study which deals with conceptual structure of the study. Similarly, section two deals
with the description of the population and sample, section three deals with the sampling

24
procedure of the study. Likewise, section four deals with the data collection procedures
and time frame. Finally, section five deals with the model and variables of this study.

1.6.1. Research design

This study has employed descriptive research design to deal with the fundamental issues
associated with various Nepalese banking industry dimensions affecting customer
satisfaction. Descriptive research design is a process of accumulating facts and involves
the systematic collection and presentation of data to give clear picture of a particular
situation. This study also established the cause and effect relationship between different
variables related to the Nepalese banking industry and customer satisfaction.

1.6.2. Population and Sample

In this study, for the selection of the sample respondent, convenience sampling has been
used. The total sample respondents are 100. This study is based on primary source of data
collected from the Nepalese banking customers. A sample of 100 respondents (n=100) of
Nepalese banking industry is covered by the questionnaire concerning the factors which
have impact on the customer satisfaction regarding the Nepalese banking industry.

Population refers to the entire group of people, events or things of interest that a
researcher wishes to study. The population of this study consists of all the customers of
Nepalese banking industry. As Nepalese banking industry are the main factor of economy
which handles the whole country economy so Nepalese banking industry has been taken
for the study. The customers who use banking service are selected for this study.

25
Table 1.4: Selection of banks, study period and number of observations

Study Observation
S. N Name of companies
period s

1 NABIL Bank Limited 2017 5

2 Nepal Investment Bank Limited 2017 3

3 Himalayan Bank Limited 2017 9

4 Everest Bank Limited 2017 3

5 Standard Chartered Bank Limited 2016 1

6 Bank of Kathmandu 2017 4

7 Machhapuchhre Bank Limited 2017 2

8 Kumari Bank Limited 2017 6

9 Siddhartha Bank Limited 2017 3

10 Nepal SBI Bank Limited 2017 1

11 Lumbini Bank Limited 2017 2

12 Laxmi Bank Limited 2017 5

13 Nepal Bangladesh Bank Limited 2017 1

26
14 Citizen Bank International Limited 2017 3

15 Prime Commercial Bank Limited 2017 4

16 Sunrise Bank Limited 2017 5

17 NMB Bank Limited 2017 2

18 Nepal Credit and Commerce 2017 1

19 Global IME Bank Limited 2017 20

Agriculture Development Bank

20 2017 1
Limited

21 Mega bank Nepal Limited 2017 3

22 Samima bank Limited 2017 2

23 Janta bank Limited 2017 4

24 Prabhu bank Limited 2017 1

25 Nepal Bangladesh bank Limited 2017 1

26 Rastriya Banijya bank Limited 2017 6

27 NIC Asia bank Limited 2017 1

28 Nepal bank Limited 2017 1

Total number of observations 100

27
1.6.3. Data gathering procedure

For gathering data in this field, questionnaire was prepared on the basis of literature
review and guidance of supervisor. Structured question was distributed to the customers
of Nepalese banking industry. Questionnaire includes both close-ended and open-ended
questions. The questionnaire was designed to collect the information of customer
satisfaction due to different factors which can affect the customer satisfaction in using
banking service. For the data collection, web-based survey through e-mail and social
networks was conducted.

28
 CHAPTER II: DATA PRESENTATION AND ANALYSIS

2.1.Respondent Profile

2.1.1. Demographic characteristics

There were five demographic categories that the respondents were asked to complete in
order to fill out the demographic profile of them. These were gender, age group,
academic qualification and occupation. The distribution of collected sample based on
these demographic profiles is presented as follows. The characteristics of the respondents
influence the results.

2.1.1.1.Gender

Figure 2.1Graphical presentation of gender wise classification

This study shows that majority of the respondents are male (53percent) whereas rest are
female (47 percent).

29
2.1.1.2.Age

Figure 2.2: Graphical presentation of age wise classification

This study shows that majority of the respondents belong to 20 to 30 age group
(75percent) whereas rest of the respondents belong to 10 to 20, 30 to 40, 40 to 50 and 50
above age group (13 percent, 10 percent, 2 percent and none) accordingly.

2.1.1.3.Academic Qualification

30
Figure 2.3 Graphical presentation of the academic qualification of the respondents

This study shows that majority of the respondents are bachelor’s degree (running or
completed) (64percent), master degree (running or completed) (21percent), M.Phil./Ph.D.
(running or completed) (7percent), intermediate (running or completed) (5percent) and
the rest are female respondents (3percent).

2.1.1.4.Occupation

Graphical presentation of the occupation of the respondents

Figure 2.4 shows occupation wise classification of the respondents.

This study shows that majority of the respondents are students (78 percent). Similarly, 11
percent are teachers, 4 percent are others, 3 percent are banker, 3 percent are businessman
and 1 percent is retired employees.

31
2.1.1.5.Take caters while taking banking service

Figure 2.11: Frequency respondents who take caters while taking banking service

This study shows that majority of the respondents are taking caters service (68percent),
the respondents who are not taking caters service (22percent) whereas rest have no idea
(10percent).

2.2.Data Presentation
2.2.1.1.Internet Banking Problems

32
Figure 2.5: Frequency of respondents who experience of some kind of problem while
using banking service

This study shows that majority of the respondents faced problem (89percent) whereas rest
of the respondents do not faced problem (11 percent).

2.2.1.2.Assistance in Using Internet Banking Services

Figure 2.6: Frequency of respondents who are being helped or not

This study shows that majority of the respondents are being helped (92percent) whereas
rest are not being helped (8 percent).

33
2.2.1.3.Complain against Banking Services

Figure 2.7: Frequency of the respondents who complain or not against banks while taking
banking service

This study shows that majority of the respondents make complain (58percent). Against
banks while taking service whereas restdo not make complain(42percent).

2.2.1.4.Customer Satisfaction

Figure 2.8: Frequency of respondent who are satisfied or not while taking banking service

34
This study shows that majority of the respondents are satisfied (69 percent), but the
respondents who are not satisfied (28 percent) whereas rest have no idea (3 percent)
against banks while taking service.

2.2.1.5.Competitive Interest Rates

Figure 2.9: Frequency respondents who offered or not the competitive interest rate while
taking banking service

This study shows that majority of the respondents are offered (66percent), but the
respondents who are not offered (30percent) whereas the rest have no idea (4percent).

35
2.2.1.6.Core Banking Facilities

Figure 2.10: Frequency respondents who take core banking facilities or not

This study shows that majority of the respondents are taking core facilities (83 percent),
the respondents who are not taking core facilities (13 percent) whereas rest have no idea
(4 percent).

2.2.1.7.Types of Account

Figure 2.12: Frequency respondents who maintain different types of account

36
This study shows that majority of the respondents who are maintaining savings a/c
(66percent), the respondents who are maintaining current a/c (25percent), and the
respondents who are maintaining loan a/c (6percent) whereas rest are maintaining credit
a/c (3percent).

2.2.1.8.Most Important Facilities Provided by Bank

Figure 2.13: Frequency respondents who regarding most important facilities provided by
banks

This study shows that majority of the respondents who are regarding ATM facilities (61
percent), the respondents who are regarding loan facilities (36 percent) whereas rest are
regarding O/D facilities (3 percent).

37
2.2.1.9.Banking Services Requirement

Figure 2.14: Frequency respondents who thinks about bank services

This study shows that majority of the respondents who are thinking wide area network
and customer service (37 percent), the respondents who are thinking computer service
(14 percent), the respondents who are thinking personalized service (11 percent) whereas
rest are think core service (1 percent).

2.3.Data Analysis

2.3.1. Descriptive analysis of organizational culture in Nepalese banking industry

This section discusses about the various statements regarding organizational culture as an
independent variable under which different questions are prepared on the basis of it. The
descriptive analysis of organizational culture in Nepalese banking industry is presented in
Table 2.1.

The table shows the analysis of customer satisfaction level associated with the
organizational culture. The respondent’s opinion regarding the organizational culture on
Nepalese banking industry is presented in the table which explains that majority of the
respondents agree with the first statement that is the I like the way employees behave to
the customer while majority of the respondents disagree with the third statement that is
the employees give personal attention to the customer.

38
Table 2.1: Descriptive analysis of organizational culture in Nepalese banking industry

(This table shows the organizational culture practices perceived byof Customer
Satisfaction ofinNepalese banking industry. The number as frequency, percentage,
average, weighted average and aggregate weighted average of respondent in five Likert
scale 1. strongly agree (SA), 2. agree, 3. neutral, 4. disagree and 5. strongly disagree
(SD) are shown)

Scale
Statement Total Average
1 2 3 4 5

F 64 16 14 4 2 100
1. I like the way
employees behave to % 64 16 14 4 2 100 1.64
the customers.
A% 80 14 6 100

F 35 44 13 7 0 99

2. The communication 35.3

% 44.44 13.13 7.07 0 100
style of employees to 5 1.91
the customer is good.
A
79.79 13.13 7.07 100
%

F 33 39 15 10 0 97

3. Employees give
34.0
personal attention to % 40.21 15.46 10.3 100 2.02
2
the customer.

A% 74.23 15.46 10.31 100

39
 F 31 42 14 9 2 98
4. When the bank
promises to do 31.6
% 42.86 14.28 9.18 2.04 100 2.07
something by a certain 3
time, to do so.
A% 74.49 14.28 11.22 100

Aggregate Average weighted 1.91

2.3.2. Descriptive analysis of ease of use in Nepalese banking industry

This section discusses about the various statements regarding ease of use as an
independent variable under which different questions are prepared on the basis of it. The
descriptive analysis of ease of use in Nepalese banking industry is presented in Table 2.2.

The table shows the analysis of customer satisfaction level associated with the ease of
use. The respondent’s opinion regarding the ease of use of Nepalese banking industry is
presented in the table which explains that majority of the respondents agree with the first
statement that is employees give me idea while filling the form while the majority of the
respondents disagree with the second statement that is communication style of employees
to the customer is good.

Table 2.2: Ease of use in Nepalese banking industry

This table shows the ease of use practices perceived by customer in the Nepalese banking
industry. The number as frequency, percentage, average, weighted average and
aggregate weighted average of respondent in five likert scale 1.as strongly agree (SA),
2.agree, 3. neutral, 4. disagree and 5. strongly disagree (SD) are shown.

Statement Total Average

Scale

40
 1 2 3 4 5

70 18 8 3 1 100
%
1. Employees give me
idea while filling the A 70 18 8 3 1 100 2.17
form.
%
88 8 4 100

22 55 11 8 3 99
F

2. The communication % 11.1 3.0

22.22 55.56 8.08 100
style of employees to 1 3 2.14
the customer is good. A
11.1
% 77.78 11.11 100
1

F 55 22 13 7 3 100

3. Employees give %
55 22 13 7 3 100
personal attention to the 2.24
customer. A
77 13 10 100
%

4. When the bank F 26 49 8 9 8 100

promises to do
% 2.24
something by a certain 2.0
26 49 8 9 100
time, to do so. A 4

% 175 8 11.04 100

Aggregate average weighted 2.02

41
2.3.3. Descriptive analysis of service charge in Nepalese banking industry

The descriptive analysis of service charge in Nepalese banking industry is presented in

Table 2.3.

The table shows the analysis of customer satisfaction level associated with these service
charge the respondent’s opinion regarding the service charge of Nepalese banking
industry is presented in the table which explains that majority of the respondents agree
with the first statement that is Sometimes employees charge more than actual fee while
the majority of the respondents disagree with the second statement that is sometimes
ATMs charge fee while made transaction from other branches.

Table 2.3 Service charge in Nepalese banking industry

This table shows the service charge practices perceived by customer in the Nepalese
banking industry. The number as frequency, percentage, average, weighted average and
aggregate weighted average of respondent in five likert scale 1.as strongly agree (SA), 2.
agree, 3. neutral, 4. disagree and 5. strongly disagree (SD) are shown.

Statements Scale Total Average

1 2 3 4 5

41 21 15 11 7 99
1. Sometimes the %
employees charge
A 64 16 14 4 2 100 2.17
more than actual
change. %
80 14 6

42
 15 54 17 9 5 100
2. Sometimes the F
employees don't %
15 54 17 9 5 100
charge the 2.35
additional fee while A
13.1
opening the a/c. 79.79 7.07
% 3

40 37 16 5 0 98
F

3. The rate of % 34.0 40.2 15.4 10.

100
interest is high 2 1 6 3 1.85
while taking loan. A
15.4
% 74.23 10.31
6

4. Sometimes the 42 33 8 5 9 97
ATM charge more
F
fee while made
transaction from %
2.03
other branches.
A 34.0 5.1
43.3 2 8.25 5 9.28 100
%

77.32 8.25 14.43

Aggregate average weighted 2.05

2.3.4. Descriptive analysis of service security in Nepalese banking industry

The descriptive analysis of service security in Nepalese banking industry is presented in

Table 2.4.

43
The table shows the analysis of customer satisfaction level associated with these service
securities the respondent’s opinion regarding the service security of Nepalese banking
industry is presented in the table which explains that majority of the respondents agree
with the fourth statement that is my bank does not misuse my personal information while
the majority of the respondents disagree with the second statement that is security guard
is always present at door.

Table 2.4: Service security in Nepalese banking industry

This table shows the service security practices perceived by customer in the Nepalese
banking industry. The number as frequency, percentage, average, weighted average and
aggregate weighted average of respondent in five likert scale 1.as strongly agree (SA),
2.agree, 3.Netural, 4.disagree and 5.strongly disagree (SD) are shown.

44
Statement Scale Total
Average

1 2 3 4 5

74 15 8 2 1 100
%
1. I feel safe in my
transactions with A 74 15 8 2 1 100
my bank.
%
89 8 3 1.41

F 68 21 6 3 2 100

2. Security guard is %
68 21 6 3 2 100
always present at
the door. A
13.1
79.79 7.07
% 3

67 20 8 3 1 99 1.5
3. By using
F
ATM service, other
63.6
people don't know % 20.2 8.08 3.03 1.01 100
3
about my
A%
transaction.
83.83 8.08 4.04 1.5

4. My bank does F 63 28 4 2 1 98
not misuse my
% 64.2 28.5
personal
4.08 2.04 1.02 100
information. A 8 7

% 92.85 4.08 3.06 100 1.47

45
 Aggregate Average weighted
1.47

2.3.5. Descriptive analysis of customer satisfaction in Nepalese banking industry

The descriptive analysis of customer satisfaction in Nepalese banking industry is

presented in Table 2.5.

The table shows the analysis of customer satisfaction level the respondent’s opinion of
Nepalese banking industry is presented in the table which explains that majority of the
respondents agree with the first statement that is I am satisfied with the quality s
information while the majority of the respondents disagree with the third statement that is
I am satisfied that it provides prompt service.

Table 1.5: Customer satisfaction in Nepalese banking industry

This table shows the customer satisfaction practices perceived by customer in the
Nepalese banking industry. The number as frequency, percentage, average, weighted
average and aggregate weighted average of respondent in five likert scale 1.as strongly
agree (SA), 2. agree, 3. neutral, 4. disagree and 5. strongly disagree (SD) are shown.

Averag
Statement Scale Total
e

1 2 3 4 5

F 0

1. I am satisfied with 61 25 8 6 100

the service quality %

46
provided by the bank. A 61 25 8 6 0 100

%
86 8 6 100 1.59

F 38 45 9 5 3 100
2. The services
provided by the bank % 38 45 9 5 3 100
1.9
exceed my A
expectation.
83 9 8 100
%

53 27 11 7 3 99
F

3. I am satisfied that it % 53.5 27.2 11. 7.0

3.03 100
provides prompt 3 7 1 7 1.75
service. A
11.
% 80.8 10.1 100
1

4. I think that the 44 40 10 4 2 100

%
bank charges are
affordable fee. A 44 40 10 4 2 100

%
84 10 6 100 1.8

Aggregate Average weighted 1.75

2.4.Findings and Discussion

Findings

Based on the analysis of data, the major findings of the study are summarized as follows:

47
 ● Among the 100 respondents, the majority of the respondents were male (53 percent)
and remaining 47 percent were female respondents. Maximum age group respondents
fall under the category of 20 to 30 years with 75 percent and minimum age group
respondents fall under the category of 50 and above with 1 percent.
● Out of the total 100 respondents the maximum numbers of respondents having
academic qualification of Bachelor’s degree is 64 percent and the minimum numbers
of the respondents having academic qualification of M.Phil. /Ph.D. is 3 percent.
● Among the 100 respondents, the highest numbers of respondents (78percent) were
students and the lowest numbers of respondents were retired (1 percent).
● Majority of the respondents (89 percent) agreed that they faced some kinds of
problem while using banking service whereas 11 percent of the respondents didn’t
face any kinds of problem using banking service.
● Among 100 respondents, majority of the respondents 24.7 percent of the respondents
said they are being helped by the employees. Similarly, 75.3 percent of the
respondents said they are being helped by the employees.

Discussion

Survey result shows that among 100 respondents, 58 percent of the respondents have
complained about the banking service whereas 42 percent of the respondents have not
complained. Majority of the respondents (69 percent) found it is satisfied while using
baking service. Similarly, 28 percent of the respondents are not satisfied and whereas
3 percent of the respondents have no idea at all. Out of 100 respondents, majority of
the respondents (66 percent) offered competitive interest rate. Similarly, minority of
the respondents (30percent) is not offered by competitive interest rate whereas 4
percent respondents have not any idea. Among 100 respondents, majority of the
respondents (89 percent) take core banking facilities, whereas 12.8 percent of the
respondents don’t take any core banking facilities and 4.3 percent of the respondents
have no idea about this at all. This study shows that out of 100 respondents, majority
of the respondents (68 percent) take caters service whereas minority of the

48
respondents (22 percent) take caters service whereas 10 percent respondents have no
idea about this at all.

49
 CHAPTER III: CONCLUSION AND ACTION IMPLICATIONS

This chapter highlights the major conclusions in separate section of this chapter which is
followed by some implications, recommendations and scope for future study regarding
the customer satisfaction and bank financial performance in Nepalese banking industry.

3.1.Conclusion

The major conclusion of the study is that a factor from Nepalese banking industry greatly
influences customer satisfaction level. Nepalese banking service users ranked highest for
the service charge as the most important factor affecting customer satisfaction level from
Nepalese banking industry. Likewise, employees behavior is ranked highest as the most
frequently faced problem in Nepalese banking industry. The study further showed that
banking service users found the banking service is goodand also found that it could
provide satisfied service to the customers.

On the basis of the analysis, the study concludes that the organizational culture, ease of
use, service charge and service security have positive and significant relationship with
customer satisfaction in Nepalese banking industry. However, employees bad behavior
negative insignificant relationship with customer satisfaction. The study also concludes
that most of the respondents believe theservice charge is satisfactory.

3.2.Action Implications

The major recommendations to improve customer satisfaction from Nepalese banking

industry are explained below:

The study observed a positive relationship between service charge and customer
satisfaction. Hence, the Nepalese banking industry willing to increase customer
satisfaction level should focus more on service charge.

Based on the study, the organizational culture willing to increase customer satisfaction
level should behave politely to customers.

The study stated that feeling of safety and customer satisfactions are positively related.
Hence, the Nepalese banking industry willing to increase their customer satisfaction level

50
should focus on assuring feeling of safety in the banking sector which will be beneficial
to the customers.

The study observed that the majority of the respondents found the majority of the
students are the customer of Nepalese banking industry. Hence, the Nepalese banking
industry willing to increase customer satisfaction level should focus on improving
service charge and provide more facilities to the students as it leads to customer ease of
use and satisfaction.

The study indicates that most of the respondents felt difficult to get core banking facilities
due to lack of knowledge of banking industry and employees should provide clear
information to the customers.

The study revealed that the majority of respondents opined there is no bank that can
deliver them the highest level of satisfaction. Therefore, the banks need to realize the
importance of customer satisfaction and should focus on quality service in order to retain
their customers.

51
52
 APPENDIX

Project Work Questionnaire

Dear respondent,

This research is entitled customer satisfaction of Nepalese banking industry is

undertaking as a partial fulfillment of the requirements for the Bachelor’s degree in
Business Administration in (BBA), Tribhuvan University. The major objective of this
study is to examine the level of customer satisfaction in Nepalese banking industry. It is
humbly requested to all the responds to fill up the questionnaire. Please be confident
because all your response will be absolutely kept confidential and feel free to answer the
give questions to your understanding. There is no right and wrong answer.

Your participation in the studywill be highly appreciated.

Prakash Bidari

SainikAwasiyaMahavidhyalaya

Tribhuvan University

Selection A: Respondents’ personal details

Please mention your name and address. (optional)

Please mention your gender.

o Male
o Female
Please mention your age category.

o 10-20
o 20-30
o 30-40
o 40-50
o 50 above
Please mention your academic qualification.

53
 o Intermediate (running or completed
o Bachelor (running or completed)
o Master’ degree (running or completed)
o M.Phil./Ph.D. (running or completed)
o Other
Please mention your occupation.

o Student
o Teacher
o Banker
o Businessmen
o Other
Section B: General Awareness Regarding CUSTOMER SATISFACTION IN
NEPALESE BANKING INDUSTRY

Do you experience any kind of problem in banking service?

o Yes
o No
o No idea
Have the employees helped you when you are in the problem while taking banking
service?

o Yes
o No
o No idea
Have you ever make a complaint against the banking service?

o Yes
o No
o No idea
Are you satisfied from this bank’s service?

o Yes
o No
o No idea
Do you think your bank offers competitive interest rate?

54
 o Yes
o No
o No idea
Does your bank have core banking facility for the customers?

o Yes
o No
o No idea
Do you think that your bank caters all your banking needs?

o Yes
o No
o No idea
Section C: Problem while using banking service

Please choose one of the best options provided to you.

……………………………………………………………………

What kind of account do you maintain in this bank?

o Current a/c [ ]
o Saving a/c [ ]
o Loan a/c [ ]
o Credit a/c [ ]
Which of the following facilities is given more importance in your bank?

o Loan facilities [ ]
o O/D (overdraft) facilities [ ]
o ATM facilities [ ]
When you think of your bank, what comes first in your mind?

o Personalized service [ ]
o Wide branch network [ ]
o Customer service [ ]
o Computerized banking [ ]
o Core banking [ ]
Section D: Likert Type Questions

55
Please select the appropriate response that best describe your attitudes towards various
factors of customer satisfaction in Nepalese Banking industry.

Tick to indicate the level of customer satisfaction associated with Organizational culture.

[1=stronglyagree, 2=agree, 3=neither agree nor disagree, 4=disagree, 5=strongly

disagree]

S. Organizational culture 1 2 3 4 5
N

1. I like the way employees behave to the customers.

2. The communication style of employees to the customer is

good.

3. Employees give personal attention to the customer.

4. When the bank promise to do something by a certain time, to

do so.

Tick to indicate the level of customer satisfaction associated with ease of use.

[1=strongly agree, 2=agree, 3=neither agree nor disagree, 4=disagree, 5=strongly

disagree]

S.N Ease of use 1 2 3 4 5

1. Employees give me idea while filling the form.

2. The bank provides prompt (quick) service to the customer.

3. My bank deals with my queries through telephone/cell phone

network.

56
 4. ATM operates for 24 hours/7 days a week without any error.

Tick to indicate the level of customer satisfaction associated with service security.

[1=strongly agree, 2=agree, 3=either agree nor disagree, 4=disagree, 5=strongly disagree]

S.N Service charge 1 2 3 4 5

1. Sometimes the employees charge more than actual charge.

2. Sometimes the employees don’t charge the additional fee while

opening the a/c.

3. The rate of interest is high while taking loan.

4. My bank does not misuse my personal information.

Tick to indicate the level of customer satisfaction associated with service security.

[1=stronglyagree, 2=agree, 3=neither agree nor disagree, 4=disagree, 5=strongly

disagree]

S.N Service security 1 2 3 4 5

1. I am satisfied with the service quality provided by the bank.

2. The services provided by the bank exceed my expectation.

3. I am satisfied that it provides prompt service.

4. I think that the bank charge is affordable fee.

SECTION E: SELF OPINION SECTION

57
Please mention your opinion regarding the customer satisfaction in Nepalese banking
industry.

………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………

58
 REFERENCES

Agarwal, J. (2012). Customer Satisfaction in Indian Banking Services (a Study in Aligarh

District). International journal of computing and business research, 3(1), 1-14.

Anand, S. V. & M. Selvaraj, M. (2013). Evaluation of Service Quality and its Impact on
Customer Satisfaction in Indian.

Anderson, E. W., Fornell, C., & and Lehmann, D. R. (1994). Customer Satisfaction,
Market Share, and Profitability:

Banking Sector: A Comparative study using SERVPERF. Life Science Journal, Vol. 10,
No. 1, pp. 3267-3274.

Bulmer, M. (2004). Questionnaires. SAGE Publications Limited, London.

Chakrabarty, A. (2006). Barking up the Wrong Tree: Factors Influencing Customer

Satisfaction in Retail Banking in the UK. International Journal of Applied
Marketing, Vol. 1, No. 1, pp. 1-7.

Chang, Y.H., &Yeh, C.H. (2002). A survey analysis of service quality for domestic
airlines. EOUropean Journal of Operational Research, 139, 166-177.

Dhakal, P. (2013). Customer satisfaction research of Nepal SBI Bank Ltd.

Engel, James F., Blackwell, Roger D, and Miniard, Poul W. 1990: Consumer
Behaior.USA: The Dryden Press.

Feigenbaum, A.V. (1945). Quality Control: Principles, Practice and Administration, An

Industrial Management Tool for Improving Product Quality and Design and for
Reducing Operating Costsand Losses (McGraw-Hill industrial organization and
management series). New York: McGraw-Hill.

Findings from Sweden. The Journal of Marketing, Vol. 58, No. 3, pp. 53-66.

Gautam, T., Dhital, M. S., & MBA, M. (2004). Customer satisfaction in Nepalese
commercial banks. published in Journal of Management and Development Review.

59
George, D., &Mallery, P. (2009). SPSS for Windows, Step by Step (8th ed.). Delhi,
Patparganj: Dorling Kindersley (India) Pvt. Ltd.

Gumesson, E. 2002: Total relationship marketing 2nd edition. Elseivier Science &
Technology books.

Jham, Vimi, 2005, "Insights into Customer Interactions in the Banking Industry--A

Kasper, H., Helsdingen, P.V., &Vries, W.D. (1999). Services Marketing Management:
An International Perspective. Chichester, UK: John Wiley & Sons.

Keng, K.A., & Liu, P. (1998). Expectation of Service Quality in Professional Accounting
Firms: A

Kombo, F. (2015). Customer satisfaction in the Kenyan banking industry.Journal of

International Studies, 8(2), 174-186.

Kotler, P., & Armstrong, G. (2012). Principles of Marketing (14th ed.). New Jersey,
USA: Pearson Education Inc.

Kumbhar, V. (2011). Factors affecting on customers’ satisfaction an empirical

investigation of ATM service. International Journal of Business Economics and
Management Research, 2(3), 144-156.

Mouawad, M., Kleiner, B. (1996). New developments in customer service training.

Managing Service Quality, 6(2): 49-56.

Parasuraman, A., Zeithaml, V.A., & Berry, L.L. (1985). A conceptual model of service
quality and its implication. Journal of Marketing, 49: 41-50.

Parasuraman, A., Zeithaml, V.A., & Berry, L.L. (1988). SERVQUAL: A multi-item scale
for measuring consumer perceptions of the service quality. Journal of Retailing,
64(1): 12-40.

Pradhananga, S. Impact of Service Quality on Customer Satisfaction in Nepalese

Commercial Banks.

60
Prajapati, S. (2014). Impact of service quality on customer satisfaction in Nepalese
commercial banks.

Qualitative Relationship Marketing Study", Review of Professional Management, Vol. 3,

No. 1 pp 10-17.

Rehman, H. and Ahemed, S. (2008). An empirical analysis of the determinants of bank

selection in Pakistan: A customer view. Pakistan Economic and social Review,
46(2), 147-160.

Rijal, S. (2006). Application of management control system in Nepalese commercial

banks. Journal of Nepalese business Studies, 3(1), 92-94.

Shrepa, G. (2013). Customer satisfaction and its impact on profitability of Nepalese

commercial banks. Unpublished Graduate Summer Project for bachelor in Business
Administration.

Singapore Study. Journal of Customer Service in Marketing & Management, 5(2): 39-52.

Sulieman. (2011). Banking service quality provided by commercial banks and customer
satisfaction. American Journal of Scientific Research, 27: 68-83.

Ting, D.H. (2004). Service quality and satisfaction perceptions: Curvilinear and
interaction effect. The International Journal of Bank Marketing, 22(6): 407-420.

61