Factors Affecting Bank Section in Rural India: Insights from Gujarat
Banking services have been termed as the lifelines of a modern economy. The entry of foreign as well as private sector banks has made the banking sector more competitive than ever before. The focus among the banks is now on improving the service quality, making operations efficient and reducing the costs. In this scenario, getting new customers and retaining them assumes great importance for the banks. This paper, on the basis of a study in the Anand district of Gujarat, seeks to look at the factors which the rural customers consider before they finally zero down upon a bank for availing services. Using exploratory factor analysis in a survey conducted among 105 bank customers in rural Gujarat, the authors seek to gain insights into the factors which lead to a long term relationship between the bank and the customer. The paper adds to the literature on bank selection, primarily confined to the urban customers, by bringing in the aspect of bank selection in the rural areas. It should also be of help for bank managers and marketers to devise appropriate product and service strategies for the rural customers.