CUSTOMER SERVICE IN CANARA BANK.- INDICATORS FOR MEASUREMENT (1996)

                   CUSTOMER SERVICE IN CANARA BANK.-
                   INDICATORS FOR MEASUREMENT (1996)
         Foreword by J. V Shetty.                               K.Puttaswamaiah

This study has been conducted with the objectives to review and evaluate
the performance of Canara Bank in general and Customer Service in
particular. The theme of the study is, however, to identify and develop a set
of indicators to review the rate of branches/ circles of the bank in their
service to customers.

Probably none of the studies or official reports have so far identified indicators/parameters to measure customer service satisfaction. This study is an attempt to fill that gap.

The importance of customer care is, of late, growing due to increasing competition and better choice in the minds of customers. The customers are also better informed people. Therefore, service to ensure customer satisfaction is the vital part of the functions of a Bank.

A number of surveys have been conducted in the past. Committees and Commissions have submitted reports on Customer Service in Banks. It is seen from these reports that no serious attempt appears to have been made to develop indicators/parameters to measure the operational efficiency of the Banks in Customer Service and rate them periodically. A study to fill that gap was felt necessary which was entrusted to Dr.K.Puttaswamaiah, Chief Editor, Indian Journal of Applied Economics.

Dr.Puttaswamaiah has conducted customer service survey in selected circles and branches of the Canara Bank. He has attempted to critically examine, appraise and evaluate the functions of Canara Bank. He has also identified and developed a set of composite indicators/parameters to review and rate the branches, divisions and circles of the Bank in their service to customers by making use of the customer service su rvey which is the main objective of this study.

Dr.K.Puttaswamaiah has developed two types of indicators - macro and micro. Each macro indicator is subdivided into micro indicators. To enable to rate the performance of the branches/divisions/circles by applying these indicators, he has given factors to be considered while rating the service. The necessary formats are developed for this purpose and an illustrative example is also worked out in this study to assist the Officers of the Bank at branch and other levels while conducting customer service surveys and ranking them by the suggested parameters by weighted average.

Dr.K.Puttaswamaiah has experience of over three decades in Planning, Project Preparation, Appraisal, Evaluation and Cost-Benefit Analysis. He has to his credit over 35 works published in India and abroad. His vast experience has enabled him to conduct this study and develop the parameters mentioned above.

This study, it is hoped, is first of its kind in India to develop such indicators relevant for rating Customer Service in the Banking sector.

                                                                                       J.V.Shetty
                                                                      Chairman and Managing Director,
August 1, 1996                                                             Canara Bank,
Bangalore.

Productivity in any organisation is a measure of the efficiency of the workforce in quantifiable terms. While it is quite easy to calculate the productivity in product industry, wherein the output is definable accurately, in service based organisations like Banks, the task is difficult. In Banks where the product is sold in service, the productivity must have a direct relationship to the performance. A number of Commissions and Committees have been constituted from the Banking Commission (1972) upto Committee on Customer Service in Banks (Goiporia Committee, 1991). The last committee has dealt-with exclusively the customer serivce in Banks and made recommendations. But, there appears to be, perhaps, no attempt to develop indicators to measure the customer service in Banks, though efforts are seen right from 1944 to develop indicators for measuring the economic development only, by the United Nations Research Institute for Social Development (UNRISD). This study is aimed to fill that gap and attempts to develop composite parameters /indicators to measure the customer service in the Canara Bank.

As the basis for developing these indicators, a customer service survey has been conducted in selected circles and branches of Canara Bank where customers and Managers are interviewed with pre-designed questionnaires, the results of which are kept as the basis to develop the said yardsticks.

The study has two main objectives. These are to: (1)review and evaluate the performance of Canara Bank in general and the customer service in particular; and (2). identify and develop a set of indicators/parameters to review and rate the Branches/Divisions/Circles of the Bank in their service to customers. The scope of the study is limited to Canara Bank, one of the leading nationalised Banks in India. In this study, a capsule summary of the deliberations and finding of various committees and commissions right from 1972 is given as back ground. The performance of Canara Bank which is of a very high order has been appraised and evaluated. The results of the customer service survey are presented in detail. Keeping the above as a basis, two sets of indicators are developed - Macro Indicators and Micro Indicators. The factors to be considered while rating the service of these branches are also given. The necessary formats for the customers and Branch Managers are suggested for periodical rating of the performance of the branches, divisions and circles by application of weighted average of the composite indices contained in the format. An illustrative example is also given to assist the periodical survey and for rating, the customer service at the branch, division and circle levels.

It is suggested that this exercise can be conducted by the Bank twice a year and preferably by and with the assistance of an expert who could be associated. I am extremely grateful to Shri.J.V.Shetty, Chairman and Managing Director, Canara Bank, who took keen interest in entrusting this study to me to be conducted through the Deccan Economic Consultancy. He has also provided all facilities and guidance. The gratitude to him in this regard cannot be expressed in words.

I am also thankful to the staff in the customer service section and other officers, as also Deputy General Managers of Mangalore and Bangalore Circles who took very keen interest in assisting me during my field work. Shri.M.S.Rao, Incharge General Manager, Bangalore Circle and Shri.H.R.Shenoy, Deputy General Manager (Incharge) are to be particularly mentioned. Shri.M.V.Narayana Rao, Divisional Manager (Customer Service), Bangalore Circle and Shri.A.R.J.Rao, Divisional Manager (Customer Service, Mangalore) were very helpful to me. I wish to thank Shri.R.K.Madhukar, Assistant General Manager and Mrs.J.Ahilandam, Manager in the Customer Service Section for their cooperation in providing the recorded data avilable with them. I also thank Shri.J.A.Padaki, Divisional Manager and Vice Principal, Staff Training Collegeof Canara Bank and Shri.L.G.Ramesh and Shri.A.Mahish, Faculty Members, as also Shri.Ratish, Librarian and his staff fortheirco-operation in my work.

Shri.M.S.Nayak, Assistant General Manager, Shri.M.R.RadhaKrishna and Shri.D.S.Ananda Murthy, Senior Managers in the Chairman's Secretariat have given me all co-operation for which I am thankful to them.

It is hoped that this study would be helpful to all the banks in general and Canara Bank in particular in conducting customer service surveys and rating the branches, divisions and circles periodically in their customer service performance. The study may be important in the present context when the Government of India is concerned with liberalisation policies. The Government of India have recently announced a proposal "for adoption of rating by experts from independent private agencies having adequate infrastructure and experience for the task" and this study may set a pioneering example in that direction.

Canara Bank has been a pioneer in many areas in the banking system and it is seen in this study that a number of recommendations made by the Goiporia Committee were implemented by the Bank much earlier to that Committee. This study may be a fore-runner and hoped to set a model in which probably for the first time in India, a well-developed and well-defined parameters/indicators are developed to measure the performance of the customer service in the Bank.

Once again, I reiterate my gratitude to Shri.J.V.Shetty, Chairman and Managing Director, Canara Bank for his confidence in me and for entrusting this study.


                                                                     K.PUTTASWAMAIAH
                                    CHIEF EDITOR INDIAN JOURNAL OF APPLIED ECONOMICS
 August I, 1996

FOREWORD
PREFACE
CHAPTER 1 - THE SCOPE, OBJECTIVES AND
METHOD -                                                                                       1
CHAPTER 2 - THE PRELUDE TO CUSTOMER SERVICE
IN BANKS -                                                                                     10
CHAPTER 3 - CANARA BANK AND CUSTOMER
SERVICE - A PERFORMANCE APPRAISAL-                                        20
CHAPTER 4 - SOCIO-ECONOMIC PROFILE OF THE
RESPONDENTS -                                                                             60
CHAPTER 5 - CUSTOMER SERVICE IN CANARA BANK
- AN EMPERICAL ANALYSIS -                                                           68
CHAPTER 6 - INDICATORS TO MEASURE CUSTOMER
SERVICES -                                                                                     96
CHAPTER 7 - SUMMARY OF CONCLUSION AND
RECOMMENDATIONS -                                                                   122
ANNEXES
1 - GROWTH OF CANARA BANK SOME
SELECTED INDICATORS OVER
90 YEARS -                                                                                    143
2 - PERFORMANCE HIGHLIGHTS OF
NATIONALISED BANKS -                                                                149
3. - LIST OF COMPUTERISED BRANCHES                                       151
4. - A STUDY ON CUSTOMER SERVICE IN
CANARA BANK
- QUESTIONNAIRE TO CUSTOMER -                                               164
5 - A STUDY ON CUSTOMER SERVICE IN
CANARA BANK
- QUESTIONNAIRE TO MANAGER -                                                 170
SELECT REFERENCES. -                                                                 174

The Asian Economic Review (1958) Vol. XXXVDI No. 3, December - 1996

CUSTOMER SERVICE IN CANARA BANK INDICATORS FOR MEASUREMENT. By K. Puttaswamaiah. Canara Bank, Bangalore !996 ppx+ J78,

The role of customer service cannot be overemphasised, especially in a service oriented industry like banking and it has been duly researched, analysed interpreted and certain indicators for its measurement pointed out in this elegantly brought out book by Canara Bank and authored by Dr. K. Puttaswamaiah, who has had a distin-guished academic career and who has authored more than 35 book to his credit and is the Editor of a reputed economic Journal. Other banks should also follow the example of Canara Bank and put their customer services in place.

However, this book as a whole, throws light on new areas of measurement of customer service, and kindle the thought of many to do further research on the same.

INDIAN BANK
Nalgonda (A.P)                                                                                G.S. Anandan

Customer Service in Canara Bank Indicators For Measurement

by Dr. K. Puttaswamaiah

Reviewed by S.C. Bandyopadyay, Assistant General Manager, Bank of India, Mumbai

The Book has been published by the Customer Service Section of Canara Bank from their Head office at Banglore. Dr. K. Puttaswamaiah was entrusted by Canara Bank with the task of:

1. Studying the level of customer service obtaining in canara Bank by applying a rational yardstick to be formulated by him and

2. Identifying developing indicators/parameters to measure the operational efficiency of the Banks in customer service for rating them periodically.

The Book under review is the report of Dr. Puttaswamaiah on the study made by him with a foreword by Shri J.V. Shetty, |h ex-Chairman of Canara Bank. The Book makes an interesting reading in as much as other than the chapters which are best suited for an In-House Journal of Canara Bank and are considered more useful and revealing for Canara Bank employees at large, other chapters like "The Prelude to Customer Service in Banks", "Indicators to measure Customer Service" are quite informative and would be very useful for Bankers in general, particularly those who are working as Incharge of Customer Service Cell of Banks operating in India.

It is a fact that so far much has been talked about the existing Customer Service of Banks and steps required to be taken for improving the level of Customer Service in Banks but perhaps no serious attempt so far was made to identify/develop a set of indicators/parameters by which the level of Customer Service could be measured. We tend to rate the Banks, so far as customer service is concerned, more through our assumed perception and mind set and sometimes only through our personal experience without any norm as such.

Dr. Puttaswamaiah has made a serious attempt in indicating and formulating a set of such parameters, which according to him should be applied at fixed frequencies to measure the level of customer service obtaining in such Banks, which should act as a source for each Bank for improving the level of customer service. The broad parameters/indicators identified in this book are: Premises, Attitude of staff, Completion of Business as per time norm, Outstation cheques, Serving, Guidance, Advances and Overall rating of Customer Service. These macro indicators alongwith the factors to be taken into, while rating the Customer Service has also been suggested.

The periodicity of customer service rating has been recommende at twice a year as on 30th September and 31st March every year and the entire rating mechanism for a Branch/Division and Circle has been illustrated through case studies with the help of a Survey Format. The Book thus has thrown a useful idea of formulating indicators for measuring the level of service in Banks but in view of the fact that many of the nationalised Banks have their own set of parameters, atleast for identifying and awarding good performers in the area of Deposit Mobilisation, House-Keeping, Priority Sector Advances, Recovery, Profit Making, etc., if all the banks can meet under a common platform and come to a consensus for uniform application of such inidicators/parameters and make the outcome transparently known to the customers, it will have two effects at the same time viz.,

a) banks would get to know their own weaknesses and try to improve their level of Customer Service in the evergrowing competitive atmosphere; and

b) the customers would have the benefit of making their own choice and would gradually be much more responsive in expressing their frank views on repetitive surveys to be conducted at fixed intervals.