Service Quality Provided by Public Sector Banks to SME Customers: An Empirical Study in the Indian Context

24 Pages Posted: 2 Jun 2009

See all articles by G. S. Popli

G. S. Popli

Delhi School of Business

D. N. Rao

Lingaya's University

Date Written: June 1, 2009


In banking sector, the quality of customer service plays an important role, particularly in the context of growing competition and sustained business growth. The study is an attempt to ascertain the service quality provided by Public Sector Banks to Small & Medium Enterprises which play a key role in India’s economy.

The major findings of the study have been that 1. Modernization and Communication affect the services to a large extent and there is a need of training to the staff for improvement of service to the SMEs customers; 2. The service quality of private banks is superior to that of Public sector banks; 3. Majority of the respondents revealed that the credit flow to SMEs sector is not sufficient and the Government will have to initiate necessary steps for making the required funds available easily on convenient terms; 4. Majority of the respondents feel that the policies for SME Sector of other countries are far better from the policies of India; 5. Delay in loan application processing due to unhelpful nature of the staff members, as claimed by the majority of the respondents. The banks usually provide finance against security and as high as 86% of the respondents are of the view that the banks ask for collateral security/guarantee from a third party even where the project has been assessed as viable and primary security is adequate.

Keywords: Sustained business growth, Small & Medium Enterprises, Service Quality, loan sanctioning and disbursals, industrial sickness, finance

JEL Classification: ERPN, MRN

Suggested Citation

Popli, Gurmukh Singh and Rao, Dabbeeru Neelakanteswar, Service Quality Provided by Public Sector Banks to SME Customers: An Empirical Study in the Indian Context (June 1, 2009). Available at SSRN: or

Gurmukh Singh Popli

Delhi School of Business ( email )

VIPS - Technical Campus
AU Block, Outer Ring Road
Delhi, 110034

Dabbeeru Neelakanteswar Rao (Contact Author)

Lingaya's University ( email )

Jasana Road
Old Faridabad, Haryana 121002
+919971510666 (Phone)

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