International Journal of Scientific and Research Publications, Volume 2, Issue 10, October 2012 1 ISSN 2250-3153 www.ijsrp.org Assessment of Service Quality in Public and Private Sector Banks of India with Special Reference to Lucknow City Maya Basant Lohani * , Dr. Pooja Bhatia ** * Research scholar, Singhania University, Pacheri Bari, Distt. Jhunjhunu, Rajasthan ** Assistant Professor, BBDNITM, Lucknow Abstract- In the present scenario banking sector of India is running in a dynamic challenge concerning both customer base and performance. Service quality is an indispensable competitive strategy to retain customer base. Service quality plays a major role in getting customer satisfaction. Banks are trying hard to win customer satisfaction by providing better quality services. This study compares customers' perceptions of service quality of both public and private banks of India. The service quality of both the banks has been measured using SERVQUAL (service quality) scale. Data was collected from total 410 customers of Lucknow of public and private sector banks using Questionnaire. The results show that dimensions of service quality such as Tangibility, Reliability, Responsiveness, Empathy and Assurance significantly predict customer trust and commitment. Private bank customers are more committed and satisfied as they receive better quality of service. The study implies that public sector banks should also come forward and try their best to provide better quality service to win back their customers. Index Terms- Customer Satisfaction, Service Quality, Public Sector Banks, Private Sector Banks. I. INTRODUCTION t the time of independence, Indian banking system was not sound. The strengthening of the banking system took place after the establishment of the Reserve Bank of India in 1935 as it was empowered to regulate banking by issue of directive, inspection, mergers, amalgamation etc. In 1949 two major actions were taken which were very important from the point of view of structural reforms in banking sector. First, the Banking Regulation Act was passed. It gave extensive regulatory powers to Reserve Bank of India (RBI) over the commercial banks. On 19th July, 1969, Fourteen major Indian commercial bank were nationalized and on 15th April. 1980, Six more were added on to constitute the public sector banks. After nationalization these banks started rendering various types of functions by assuming social responsibilities. Through these banks, the government tried to implement various welfare schemes. These banks occupy a pivotal place in the Indian Banking system. Before 1991 there was little competition in the banking sector. The public sector banks dominating the banking industry in terms of size of assets .The government has now recognized the need to make banking industry more competitive .It has thus made certain policy changes such as deregulation of interest rates and dilution of consortium lending requirement .Moreover, banking has been opened up to the private sector .As a result, new private sector Banks have been set up, old private sector Banks have expanded their operations and more foreign sector banks have entered the Indian banking industry. This has promoted competition and has helped in increasing efficiency. The paper endeavors to determine customer satisfaction. In the era of cut throat competition the survival of any banks depends upon the satisfied customers .Customer satisfaction is the state of mind that consumers have about a bank when their expectations have been met or exceeded over the life time of the service different people may have different expectations based on their prior experience, personal needs and what other people told them. As perceptions are always considered relative to expectations and expectations are dynamic, perceptions may also shift over time from person to person. What is considered quality service or the things that satisfy customer today may be different tomorrow, same is in banking industry. Understanding of the customer’s expectations and their perceptions about a particular bank can be the game changer. II. LITERATURE REVIEW According to K. Rama Mohana Rao Quality means the degree of excellence in service performance .Consumers perceive the quality of a service by experiencing the consumption process and comparing the experience with their expectations. The best service quality firms cannot blame for poor quality .The service firm need to formulate strategies for quality performance. Service quality management is the most critical task of service companies Quality may be perceived in many dimensions. It may relate to cost, profitability, customer satisfaction, customer relations or positive word of mouth, customer asses service quality with their own criteria. Buzell and Gale’s empirical research shows the positive relationship between service quality and organizational performance. According to Parasuraman, Zeithmal and Berry Service quality is the degree and direction of discrepancy between consumer’s perceptions and expectations in terms of different but relatively important dimensions of the service quality, which can affect their future purchasing behaviour. Douglas et al define service quality as an attitude formed by long term, overall evaluation of performance. In 1990 Professor Evert Gummesson said that service quality must be viewed in conjunction with service productivity and profitability, A