Customer Loyalty in Retail Banking-A Structural Equation Modeling (Sem) Approach

Indian Retail Banking system consists of Public Sector banks, Private Sector banks, Regional rural banks, Rural and urban cooperative banks. The financial and economic conditions in the country are far higher to any other country in the world. In the Indian situation, the public and private banks contend with each other in magnetizing the customers. It is broadly perceived that competition in the Indian banking sector has amplified since the commencement of the financial sector reforms in 1992.In the multifarious competition it is more consequential for the public and private banks belonging to the Indian inception to enhance their services which will determine their business development. With an intention to gratify the prospective customers, banks should adopt a retention strategy to retain the existing customers and to draw new customers. The banks now focus on attracting the customer by enhancing their services and diversifying their activities. The researcher has developed a model for Customer loyalty in retail banking with major dimensions. The model was developed using Structural Equation Modeling. A sample of 1040 respondents was selected from Chennai, Coimbatore, Salem and in Trichy districts of Tamilnadu,South India. The revealed results would be helpful for retail banking sectors.

Keywords: Customer Loyalty , Retail Banking , Customer Relationship ,Customer Interaction.