Preference of a Particular Sector Bank in the Indian Banking Society with Respect to Usage of Payment Cards by the Customers

Abstract

Banks are financial institutions that affect the economy of a nation to a great extent. They are responsible for facilitating the financial and economic development of countries and act as payment and transaction agents for customers. The banks where government is a major stakeholder and holds more than 50% of the stakes are called public sector banks and those in which private institutions or individuals hold more than 50% stakes are private sector banks. There are various preference levels of customers for different payments, services provided by these two types of banks. This paper tries to focus on the preference of customers towards the banking services provided by public and private sector banks.

A total of 20 banks have been considered in each sector and various factors like the number of ATMs, credit cards, debit cards, Point of sales (POS), number of transactions per number of users and the amount transacted per number of users for both credit card and debit card, have been considered for understanding our primary objective. Secondary data of four years from 2016-2019 on half yearly basis has been used to carry out statistical test (ANOVA) to test the hypothesis formed. A primary survey in the form of a questionnaire helped in estimating the reason for preference of the particular sector bank. Factor Analysis was carried out to estimate the relevant factors important for customers to make a preference. Using this estimation, multivariate logistic regression was done to find the preference of customers on the basis of those factors. As a forward path suggestions can be given to develop upon the areas of improvement and work upon the lagging areas.