ABSTRACT:
The banking sector plays a crucial role in economic growth and financial inclusion, with customer satisfaction being a key determinant of service effectiveness and long-term customer retention. Satisfied customers are more likely to develop trust in financial institutions, engage in repeat transactions, and contribute to a bank’s overall stability and reputation. In contrast, dissatisfaction can lead to service switching, negative word-of-mouth, and weakened customer relationships. Understanding the factors that influence customer satisfaction in banking, such as service quality, employee behavior, interest rates, and loan processing efficiency, is essential for improving financial service delivery. This study examines customer satisfaction in banking, focusing on the State Bank of India (SBI) and its loan offerings in Kashmir. Using primary data from 172 customers, it identifies key determinants of satisfaction through descriptive analysis, correlation, and multiple regression modeling. Findings indicate that loan sanction timelines (ß = -0.24, p = 9.6e-05) and interest rates (ß = -0.42, p = 1.5e-08) significantly impact borrower experience. While 50% of respondents were ‘very satisfied ’with SBI’s loan services, concerns about approval delays and interest rate competitiveness persist. The study applies SERVQUAL, CRM, and Expectation-Confirmation Theory (ECT) to analyze service quality and expectation gaps. It also acknowledges SBI’s ongoing digital transformation, including the expansion of AI-powered loan approvals, WhatsApp banking, and Aadhaar-based e-KYC. Key recommendations include accelerating digital transformation, dynamic pricing strategies, strengthening customer relationship management (CRM) initiatives, and enhancing customer service training programs to improve service quality and customer retention. The findings of this study contribute to the understanding of customer satisfaction in the banking sector by highlighting key factors that influence borrower experiences. Furthermore, SBI’s advancements in loan processing and service innovation can serve as a benchmark for other banks in emerging markets seeking to enhance service efficiency, accessibility, and overall customer experience through improved operational strategies and customer-centric approaches.