CHAPTER-IV

DATA ANALYSIS RESULTS AND DISCUSSION

The analysis of the present study is made through the appropriate statistical tools

in consultation with the expert statistician. The study is presented at two stages for better

understanding of the reader. The present study is focused on the role of RRBs in the

upliftment of socio economic status of the rural population in the sample area. It also

covers the level of awareness of banking services, widely used services, technology

impact on service quality and availability and the present state of banking services and

the suggestions to improve the availability and accessibility of the same in rural areas.

This study can give a real picture of the banking services and its impact on the

society in the sample area. This can help the policy makers to review certain policy

matters and to device operational strategies for the better performance of the banks and to

provide the quality service to the wide public. The study is descriptive in nature and the

results are discussed based on the results of the survey.

Objective 1 and 4

The first objective is to study the profile of customers and banking environment

prevailing in the Thiruvallur District, TamilNadu and the fourth objective is to find out

the relationship between the demographical variables and the level of awareness among

the Respondents. Both the objective is done by the following tables.

 Gender wise Distribution of the respondents

Gender No of Respondents Percentage

Male 204 79.8
Female 155 20.2
Total 359 100
Source: Questionnaire

The table shows the gender wise distribution of the respondents. It is observed

from the table out of 359 respondents 204 respondents (79.8 per cent) are male and the

remaining 155 respondents (20.20 per cent) are female. It is found that majority of the

respondents have bank account as well as visiting banks quite often. The composition of

female members in the sample is found very less as majority of female respondents used

to go to banks for availing themselves of micro credit.

 Age wise Distribution of the respondents

Age Group No of Respondents Percentage

Less than 30 years 60 16.7
31 – 40 82 22.8
41 – 50 105 29.2
51 – 60 67 18.9
Above 61Yrs 45 12.4
Total 359 100
Source: Sample Survey

The table presents the age wise distribution of the respondents. It is observed that

105 respondents (29.2 per cent) belong to the age group of 41-50 years; 82 respondents

(22.8 per cent) belong to 31-40 years; 67 respondents (18.9 per cent) belong to 51-60

years; 45 respondents (12.4 per cent) belong to the age group of above 51 years. The

study found that majority of the respondents belongs to the age group of 41-50 years.
 Bank Account Status

Bank Account Status No of Respondents Percentage

Yes 313 87.2
No 46 12.8
Total 359 100
Source: Questionnaire

It is observed from the table that 313 respondents (59.3 per cent) have bank

account and 46 respondents (12.8 per cent) not having the bank account but used to go to

banks for getting drafts and other purpose. The respondents reported that they opened

bank account to deposit, credit, transfer the loan amount and withdraw the savings from

time to time. However, in practice, no farmer is following gradual withdrawal from the

account based on the requirements to perform farm activities. The whole amount is

withdrawn at a time.
 Educational Qualification

Educational Qualification No of Respondents Percentage

Illiterate 14 3.8
Literate 18 5.0
Primary education 55 15.4
Middle School 46 12.8
High School 74 20.6
Higher Secondary 56 15.6
College level 58 16.2
Professional 38 10.6
Total 359 100.0
Source: Sample Survey

The table gives educational status of the respondents. It is found that 74

respondents (20.6 per cent0 studied upto high school, 58 respondents (16.2 per cent) have

studied upto graduation level. Among the respondents, 56 (15.6 per cent) of them have

studied upto higher secondary level followed by 46 respondents (12.8 per cent) at middle

school level; 55 respondents (15.4 per cent) studied upto primary school level and 38

respondents were professionals. It is interesting to note that 14 respondents (3.8 per cent)

were illiterate and respondents who are able to write and read their names were reported
to be 18 respondents (5 per cent). It is clear from the information that the rural areas are

suffering from the lack of educational back ground and there by lack of awareness on the

banking services and the benefits of the same. It is indeed there is a need to proceed with

the other promotional methods to explain them about the banking services and their

impact on the quality of quality of life. This micro level effort can help in breaking the

barriers and to bring a change in the existing situation in the rural banking practices.

Occupation

Occupation No of Respondents Percentage

Cultivation 174 48.5
Business 122 34.0
Family Occupation 53 14.7
Service Organization 10 2.8
Total 359 100
Source: Questionnaire

The table shows the occupationwise distribution of the respondents. It is observed

from the table that out of 359 respondents, 174 respondents (48.5 per cent) were

cultivators; 122 respondents (34 per cent) were the business people; 53 respondents (14.7

per cent) were doing family occupation and 10 respondents (2.8 per cent) were working

in the service organizations. It is inferred from the observation that majority of the rural

folk are depending on the primary sector and its allied activities. It indicates the need for

change into regular income activities in a gradual manner.

 Primary sector gives only seasonal returns and that too are uncertain due to crop

failures or monsoon failures and natural calamities. This can be changed by providing

information on the alternative allied activities available to have a regular income to the

farming sector customers.

Income Distribution of the respondents

Income (in `) No of Respondents Percentage

Below 1 Lakh 53 14.8
1 – 3 Lakhs 198 55.1
3 – 5 Lakhs 95 26.5
Above 5 Lakhs 13 3.6
Total 359 100
Source: Sample Survey
The table provides income details of the respondents. It is seen from the table that

below one lakh is earned by 53 respondents (14.8 per cent); 198 respondents (55.1 per

cent) have reported that their income falls between 1-3 lakhs; 95 respondents (26.5 per

cent) have reported that their income is between 3-5 lakhs; and above 5 lakhs is earned

by 13 respondents. It is evident from the observation that sizeable number of

respondents’ income level is between 1-3 lakhs.

Type of House
Type of House No of Respondents Percentage
Hut 17 4.7
Shed House 70 19.5
Building 272 75.8
Total 359 100
Source: Questionnaire
 The table shows the housing conditions of the respondents. It is observed from the

table that 272 respondents (75.8 per cent) have informed that they live in building; 70

respondents (19.5 per cent) have reported that they live in shed house and is followed by

17 respondents (4.7 per cent) who live in huts. It is found from the observation that the

housing conditions of the respondents have improved as majority of the respondents in

the study live in buildings than hut house.

Dependents in Respondents’ family

No. of Dependents No of Respondents Percentage

Two 63 17.5
Three 144 40.1
Four 118 32.9
More than four 34 9.5
Total 359 100.0
Source: Sample Survey

The table provides the information about number of dependents in respondents’

family. It is observed from the table that 144 respondents (40.1 per cent) have reported

that they have three dependents; 118 respondents (32.9 per cent) have reported that they

have four dependents; 63 respondents (17.5 per cent) said they have two dependents and

34 respondents (9.5 per cent) have informed that they have more than four dependents.

It is inferred from the observation that majority of the respondent’s have 3-4

dependents as an average. It is interesting to note that the increasing size of family

members is perceived as strength in rural areas.

 Purpose to Visit Bank

Purpose No of Respondents Percentage

Deposit and withdraw Money 195 54.4
Avail Loan 68 18.9
Demand draft 60 16.7
ATM 36 10.0
Total 359 100.0
Source: Questionnaire

The table reveals the details of purpose to visit the bank. It is seen from the table

that 195 respondents (54.4 per cent) visit the bank for depositing and withdraw the

money; 68 respondents (18.9 per cent) visit the banks for availing of loans; 60

respondents (16.7 per cent) visit the bank for getting demand drafts and is followed by 36

respondents (10 per cent) who visit the bank for using ATM and related services.

It is noteworthy to point out from the study that many of the banks are operating

ATM services in rural areas and rural bank customers are also using them frequently.
 Tenure of Account

Tenure No of Respondents Percentage

Less than 5 years 166 46.2
6 – 10 143 39.8
11 – 15 21 5.9
16 – 20 14 3.9
More than 20 Years 15 4.2
Total 359 100.0
Source: Sample Survey

The detail regarding the period of account holder in bank is reported in the table.
It is observed from the table that 166 respondents (46.2 per cent) reported that they are
account holders of the bank for less than 5 years; 143 respondents (39.8 per cent)
informed that they are account holders for 6-10 years; 11-15 years reported by 21
respondents (5.9 per cent) and above 16 years reported by 29 respondents (5.1 per cent).

It is interesting to note from the observation that majority of the respondents have
account in banks less than 10 years.
 References Given

Reference given by No of Respondents Percentage

Friends 129 35.9
Relatives 56 15.6
Colleagues 33 9.2
Neighbours 87 24.2
Banker 54 15.1
Total 359 100.0
Source: Questionnaire

The table discloses the information regarding the reference or introduction to

banking services of the respondents. It is observed that 129 respondents (35.9 per cent)

reported that their friends have introduced the banking services to them; 56 respondents

(15.6 per cent) reported relatives introduced banking services to them; 33 respondents

(9.2 per cent) said colleagues have introduced banking services to them; 87 respondents

(24.2 per cent) informed that neighbours have introduced banking services to them and

the remaining respondents have informed that bankers i.e. staff of the banks have

introduced banking services to them. It is found from the observation that majority of the

respondents came to know of the banking services through their friends.

INFERENTIAL STATISTICS

The researcher has applied Z test to test whether there is any significant difference
in mean scores of the variable taken for the study. The results of the same is given below

Mean Scores and Z test for level of Awareness of Banking Services

BANKING SERVICE N MEAN S.D Z value P value

Deposits Collection 359 4.31 0.838 81.753 0.004**
Granting Loans 359 4.19 0.974 79.378 0.002**
Issuing Drafts 359 3.27 1.613 62.014 0.003**
Agency Functions 359 1.46 0.845 27.550 0.004**
Funds Transfer 359 2.04 1.375 38.686 0.003**
Reference Services 359 1.46 0.845 27.550 0.002**
ECS Payments 359 2.04 1.375 38.686 0.001**
ATM Services 359 4.43 0.923 84.023 0.004**
Tax Collections 359 2.28 1.268 43.225 0.002**
Pension Payments 359 3.76 1.056 71.250 0.003**
Online Services 359 2.18 1.405 41.220 0.004**
Safe lockers 359 1.94 1.255 36.681 0.002**
Educational Loans 359 3.76 1.056 71.250 0.001**
Mutual Funds 359 1.46 0.845 27.550 0.004**
Investment Advice 359 1.46 0.845 27.550 0.003**
Housing Loans 359 2.44 1.072 46.392 0.002**
Demat Services 359 1.46 0.845 27.550 0.004**
Insurance Products 359 2.34 1.482 44.175 0.002**
Mobile Banking Services 359 2.61 1.185 49.559 0.003**
Credit Card Services 359 1.64 1.101 30.981 0.004**
Source: Computed from sample survey
Note: The p value below 0.005. ** denotes significant at 1 per cent level.
 The table shows the mean scores and Z test values for level of awareness about

banking services. It is observed from the above table, that major banking services which

show awareness among the sample respondents are ATM Services with the mean value

of 4.43, followed by deposit collections, granting loans, educational loans, pension

payment, and issuing drafts with the mean values of 4.31, 4.19, 3.76 and 3.27

respectively.

The z test values are also significant at 1 per cent level as the p value is less than

0.01. Therefore, the researcher arrives at concluding that there is no significant difference

in sample and population mean.

Poor level of awareness is recorded for the agency services, investment advice,

mutual funds, DEMAT services, reference services etc with the mean score of 1.46

among the sample respondents in the rural areas. It indicates that the primary functions

are known among them and the secondary services are not that familiar among the

respondents in the sample area. Proper promotional methods can improve the situation

and to provide many services in the sample area.

Factor Analysis: Usage of Banking Services

The researcher has used factor analysis in order to estimate the latent relationship

within the variables. The factor analysis tools like Principal Component Analysis (PCA)

with Varimax rotation are used for the same. Kaiser Mayer Olkin sample adequacy test

has been administered to estimate the sample adequacy for factor analysis and Cronbach

alpha test used for reliability of the statements.

 Extraction values for usage of banking services

Items Initial Extraction

Deposits Collection 1.000 .873
Granting Loans 1.000 .823
Issuing Drafts 1.000 .303
Agency Functions 1.000 .985
Funds Transfer 1.000 .928
Reference Services 1.000 .985
ECS Payments 1.000 .928
ATM Services 1.000 .968
Tax Collections 1.000 .749
Pension Payments 1.000 .999
Online Services 1.000 .927
Safe lockers 1.000 .390
Educational Loans 1.000 .999
Mutual Funds 1.000 .985
Investment Advice 1.000 .985
Housing Loans 1.000 .891
Demat Services 1.000 .985
Insurance Products 1.000 .833
Mobile Banking Services 1.000 .817
Credit Card Services 1.000 .610

Extraction Method: Principal Component Analysis.

Note: The variables Issuing drafts, safe lockers, are removed in the II iteration and factor

analysis is repeated and during the III iteration the variable ATM services are also

removed.
 Factors Loadings
BANKING SERVICES COMPONENTS
1 2 3 4 5
Demat Services .971
Agency Functions .971
Investment Advice .971 UTILITY SERVICES
Mutual Funds .971
Reference Services .971
Credit Card Services .774
Online Services .938
Funds Transfer .904
ECS Payments .904 E-SERVICES
Insurance Products .892
Housing Loans .941
Mobile Banking .902 INCOME AND
Services INVESTMENT SERVICES
Tax Collections .860
Educational Loans .999 SOCIAL SERVICES
Pension Payments .999
Granting Loans .949
Deposits Collection PRIMARY SERVICES .947

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 5

Iterations
 Based on the loadings, all the items are segregated into five desired major services

of a bank. The factors are named as utility services, E-services, Income and investment

services, Social services and Primary services. The grouping is similar to the grouping of

banking services by RBI and the Indian bankers association. Only variation is the level of

awareness on certain basic services is low and the advanced and technology oriented

services are observed as high among the respondents and the same is observed

statistically in the table. Based on the customer survey no single strategy can be adopted

in promoting all the banking services. Independent strategies with specific goals can help

in enhancing the banking services in the rural areas and it can help in economic

upliftment of the rural areas of the study area.

Factor Analysis: Problems in Availing of Banking Service

In order to find out the problems in availing of the banking services, among the

rural customers, Principal Component Analysis with Varimax rotation is used. The

sample adequacy for the factor analysis is found by using Kaiser Mayer Olkin sample

adequacy test and the cronbach alpha value for all the variable is 0.673 (67.3 per cent).

Four factors have emerged in the analysis; the results along with the loading are

presented below.
 Extraction values for problems in availing of banking services

Items Initial Extraction

Lack of awareness 1.000 .930
Lack of availability 1.000 .679
Poor proximity to bank 1.000 .966
Lack of co-operation Form Banker 1.000 .915
No Proper guidance 1.000 .966
No Regularity in Functioning 1.000 .966
No trained staff 1.000 .930
Poor Usage Of The Service In A bank 1.000 .843
Lack of guarantee on performance 1.000 1.000
Lack of uniformity 1.000 1.000
Hidden costs 1.000 1.000
Risk of cyber crime 1.000 1.000
Poor governance of complaints 1.000 .843
Limited services offered 1.000 .915
Poor customer response 1.000 .966
Autocratic behaviour 1.000 1.000
Poor CRM 1.000 1.000
Lack of transparency 1.000 1.000

Extraction Method: Principal Component Analysis.

Note:
Variable: No Proper networking was deleted due to communalities less than 0.5.
Objective 2
The second objective is to find out the level of awareness and to identify the problems in

availing banking services among the Customers in rural areas. The following table shows

it.

Factors loading for problems in availing of banking services

PROBLEMS LOADING FACTOR NAME

Poor Customer Response .983
Poor Proximity To Bank .983 FUNCTIONAL
No Proper guidance .983 PROBLEMS
No Regularity in Functioning .983
Poor Usage Of The Service In A bank .918
Poor Governance Of Complaints .918
Limited Services Offered .927
Lack of co-operation Form Banker .927 AVAILABILITY AND
No Trained Staff .919 ACCESSIBILITY
Lack Of Awareness .919 PROBLEMS
Lack Of Availability .816
Lack Of Guarantee On Performance .962
Risk Of Cyber Crime .962 CONTROL PROBLEMS
Hidden Costs .962
Lack Of Uniformity .962
Lack Of Transparency .999
Poor CRM .999 BEHAVIOURAL
Autocratic Behaviour .999 PROBLEMS
 The Problems faced by the customers are broadly classified into four types,

namely, functional problems due to poor customer response and poor guidance,

availability and accessibility problems due to Lack of co-operation from the banker and

lack of trained staff, Control problems due to risk of cyber crimes, hidden costs and

finally behavioral problems due to autocratic behaviour, lack of transparency and poor

customer relationship management.

Functional problems are arising due to physical and psychological environment in

the bank. These can be resolved with specific time frame and with the co-operation of

customers and the employees of a bank. Availability and accessibility problems needs to

be solved on priority basis by providing skill training to all the employees in the usage of

technical services and its operational aspects. Behavioral problems can be resolved

through relationship managers and by having good interpersonal communications with

the customers.

The problems quoted are generic in nature and existed in almost all the branches,

but the degree of sensitivity from service to service is vary based on the nature of

accounts and the size of transactions and the type of customers. A unique policy decision

on service quality may help in resolving such issues in all the areas over a period of time.

This requires a single stand strategy with long run implementation goals. Such

initiatives can bring a change both in the individuals and the system as a whole and helps

to bring a changed banking service quality in the sector. This can bring lot of smiles in

the customer’s face. A smile in the customer face can give an extra mile to the bank in its

growth and development.

FRIEDMAN TWO-WAY ANOVA:

The researcher has applied two-way ANOVA to ascertain the significant

difference between level of awareness and banking services.

Hypothesis: Banking services are gender biased.

H0: There is no significant difference between genders with respect to level of

awareness of banking services

H1: There is significant difference between genders with respect to level of awareness

of banking services

ANOVA Test Result

ANOVA with Friedman's Test
Sum of Mean Friedman's p-value
Df
Squares Square Chi-Square Sig
Between People 1813.215 357 5.079
Within Between Items 7829.589a 20 391.479 3660.489 .003**
People Residual 7485.268 7140 1.048
Total 15314.857 7160 2.139
Total 17128.072 7517 2.279
Grand Mean = 2.47
a. Kendall's coefficient of concordance W = .457.
 ANOVA
Sum of Mean p-value
df F
Squares Square Sig
Between People 1813.215 357 5.079
Within Between Items 7829.589 20 391.479 373.422 .002**
People Residual 7485.268 7140 1.048
Total 15314.857 7160 2.139
Total 17128.072 7517 2.279
Grand Mean = 2.47

The table provides ANOVA test result for the variables genders and level of

awareness of banking services. Since p value is less than 0.01, the researcher rejects the

null hypothesis that there is no significant difference between genders with regard to

level of awareness of banking services. Hence, the researcher concludes that there is

significant difference between genders with respect to level of banking services.

Hypothesis 2: Aged persons are aware of banking services well than

younger persons.

HO: There is no significant difference between ages with regard to level of

awareness on the banking services.

H1 : There is a significant difference between ages with regard to level of

awareness on the banking services.

 ANOVA Test Result
ANOVA with Friedman's Chi-square Test
Sum of Mean Friedman's p-value
df
Squares Square -Square Sig
Between People 1835.159 357 5.141
Within Between Items 7465.117a 20 373.256 3471.439 .004**
People Residual 7932.026 7140 1.111
Total 15397.143 7160 2.150
Total 17232.302 7517 2.292
Grand Mean = 2.54
a. Kendall's coefficient of concordance W = .433.

ANOVA
Sum of Mean p-value
df F
Squares Square Sig
Between People 1835.159 357 5.141
Within Between Items 7465.117 20 373.256 335.986 .003**
People Residual 7932.026 7140 1.111
Total 15397.143 7160 2.150
Total 17232.302 7517 2.292
Grand Mean = 2.54
Note: ** denotes significant at 1 per cent level
It is found that the probability value is less than 0.01, and therefore, the researcher
rejects the null hypothesis that there is no significant difference between ages with regard
to level of awareness of banking services. As a result, the researcher accepts the
alternative hypothesis that there is a significant relationship between age and level of
awareness of banking services.
Hypothesis 3: Educational standard improves better access of
banking services

HO: There is no significant difference between educational with regard to

level of awareness of the banking services.
H1 : There is a significant difference between educational standard with
regard to level of awareness of the banking services

ANOVA Test Results

ANOVA with Friedman's Test
Sum of Mean Friedman's p-value
df
Squares Square Chi-Square Sig
Between People 1827.152 357 5.118
Within Between
7599.962a 20 379.998 3573.936 .004
People Items
Residual 7625.753 7140 1.068
Total 15225.714 7160 2.126
Total 17052.867 7517 2.269
Grand Mean = 2.49
a. Kendall's coefficient of concordance W = .446.
 ANOVA
Sum of Mean p-value
df F
Squares Square Sig
Between People 1827.152 357 5.118
Within Between Items 7599.962 20 379.998 355.793 .003
People Residual 7625.753 7140 1.068
Total 15225.714 7160 2.126
Total 17052.867 7517 2.269
Grand Mean = 2.49

Since the p value is less than 0.01, the null hypothesis is rejected at 1 per cent

level. As a result, the researcher accepts the alternative hypothesis that there is a

significant difference between educational qualifications with regard to level of

awareness of the banking services. The result indicates that if a respondent has higher

educational standard, he has access to or is aware of banking services easily. Educational

qualifications may improve the level of awareness, but the usage of the service requires

savings potential and the need for usage of the banking service.
Rank Analysis

Poor practice of Banking Habits

In order to find out the reasons for poor usage of banking services in the sample

area, pre tested reasons were quoted in the structured questionnaire and asked the

respondents were asked to rank them independently. The cumulative score of the

responses received is tabulated and ranked them accordingly. Based on this it is easy to

know the reasons for poor usage and a strategy can be formulated to improve upon it.

It also helps in taking remedial and curative actions against the current

practices. This may help in reaching the customers and to achieve the customer trust and

the social objectives of banking system. The results of the analysis are presented below:

Rank analysis of the reasons for poor usage of banking services

S.No Reasons Cumulative Score Rank
1 Poor availability of services/ Products 173 II-Rank
2 Lack of awareness on modus operandi 183 I- Rank
3 Myth of cost and safety 163 IV-Rank
4 Poor advertisement on the services available 149 VI
5 Lack of consistency in transactions 170 III-Rank
6 Poor co-operation from banking staff 143 VII
7 Poor network connectivity 125 IX
8 Proximity and safety issues 130 VIII
9 Limited time and services 108 X
10 Low level of interest towards financial 154 V-Rank
services
 It is evident from table, that the major reasons for poor usage of banking

services in the rural areas are lack of awareness on modus operandi of the services with

the mean score of 183, poor availability and accessibility of services and products with

the mean score of 173, lack of consistency in transactions in the operations of a bank with

the mean score of 170, myth of cost and safety issues with the mean score of 163 and low

level of interest towards financial products and services among the rural customers with

the mean score of 154, stood at one to five ranks respectively.

Factor Analysis

Importance of Banking Services

In order to find out the level of agreement on the importance of banking services

among the rural customers, Principal Component Analysis with Varimax rotation is used.

The sample adequacy for the factor analysis is found by using Kaiser Mayer Olkin

sample adequacy test and the cronbach alpha value for all the variable is 0.693 (69.3 per

cent). Five factors are emerged in the analysis; the results along with the loading are

presented below.

Table Showing KMO and Bartlett's Test on sample adequacy

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .693
Bartlett's Test of Sphericity Approx. Chi-Square 597.708
Df 45
Sig. .000
 Table for Communality values
Communalities
Initial Extraction
To Uplift rural economic empowerment 1.000 .493
Empower Women 1.000 .697
Provide Loans 1.000 .582
Bridge The Gap Between The Demand and Supply of Funds 1.000 .922
Create Wealth 1.000 .731
To Create Financial Awareness 1.000 .923
Create Opportunities 1.000 .741
Provide Funds for Farming sector 1.000 .562
Provide The Technology Financial Services to Poor 1.000 .552
Overall Economic Development 1.000 .598
Extraction Method: Principal Component Analysis.
 ]
Table for Component Matrix
Component Matrixa
Component
1 2 3 4 5
To Create Financial Awareness .947
Bridge the Gap Between The Demand And Supply .942
of Funds
Create Opportunities .844
Create Wealth .830
Provide Loans -.611
Provide Funds For Farming sector -.539
To Uplift rural economic empowerment .476
Provide the Technology Financial Services to Poor .693
Overall Economic Development -.561
Empower Women -.614
Extraction Method: Principal Component Analysis.
a. 5 components extracted.
Note: Variable 81 is deleted from further analysis due to cross loadings
 Rotated Component Matrix

Rotated Component Matrixa

Component
1 2 3 4 5
Bridge the gap between the Demand and Supply of Funds .960 Empowerment Factors
To Create Financial Awareness .959
Create Opportunities .856 Social Factors
Create Wealth .853
Provide Funds for Farming sector .731 Economic
To Uplift rural economic empowerment -.670 Factors
Provide Loans Social Banking .673
Provide the Technology Financial Services to Poor Factors .654
Empower Women Development Factors -.742
Overall Economic Development .700
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 8 iterations.

The importance of banking services for the growth and development is grouped

into five factors. There are two items loaded as empowerment factors. These factors can

bring a change in the economic independence and phase of financial stability. The

Second set of items loaded are named as Social factors , which can bring change in the

social status of the customers by providing opportunities for growth.

 The third sets of items loaded are titled as economic factors which are imported

for the financial independence among the customers. Fourth set of items loaded comes

under the frame of social banking factors, which are focusing to uplift the economic

status of the rural mass. And finally two items are loaded, named as development factors.

Factor Analysis
Opinion of banking services offered by banks

The researcher has applied factor analysis in order to find out the latent

relationship between the variables. Opinion of banking services offered by the banking

institution has been taken for analysis.

Table for Communality values for Banking Services offered by Banks

Communalities
Initial Extraction
Collecting Deposits 1.000 .635
Granting Loans 1.000 .323
Agency Functions 1.000 .999
Customer Utility Services 1.000 .999
Technological Services 1.000 .669
CRM 1.000 .651
Safe Vault Facilities 1.000 .597
Fund Transfer Services 1.000 .536
Online Banking 1.000 .613
Grievance Handling 1.000 .678
Extraction Method: Principal Component Analysis.
 Table for Rotated Component Matrix for Banking Services offered by Banks
Rotated Component Matrixa
Component
Banking services
1 2 3 4 5
Customer Utility Services .999 Customer Delighted Services
Agency Functions .999
Grievance Handling .811 Appreciable services
Technological Services .799
CRM .790 Notable services
Online Banking -.752
Collecting Deposits Indicative services .780
Fund Transfer Services .643
Safe Vault Facilities Improvable services .756
Granting Loans -.527
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 5 iterations.

It is observed from the above table, that the customer satisfaction items related

to the services offered by the rural banks is identified and grouped by using the principal

component analysis. Fine factors have emerged. Each of the factors was named

independently by reviewing the nature of items loaded and the loaded value

differentiation.

The factors identified are customer delighted service, appreciable services,

notable services, indicative services and improvable services. The degree of

differentiation is done on the basis of the quality ranks given by the customers. The
highly satisfied services are categorized as delighted services and the poor service quality

observed items are classified as improvable services. All other services are ranked in

between based on the loadings.

Z-test: Large Sample Test

In order to find out the degree of satisfaction on the banking services offered

by the banks, among the sample respondents, Z-test is administered on the data. The

descriptive statistics along with the results of the Z-test is presented in the following

tables.

Table Z test for level of satisfaction on the banking services

Knowledge Factor Mean value Z value P value

Collection Deposits 3.301 62.542 0.000**
Granting loans 2.359 44.703 0.000**
Agency Functions 2.696 51.089 0.000**
Customer utility services 2.696 51.089 0.000**
Technological Services 2.975 56.367 0.000**
Customer Relationship Management 2.861 54.203 0.000**
Safe Vault Facilities 3.081 58.372 0.000**
Fund Transfer Services 2.359 44.703 0.000**
Online Banking 3.212 60.853 0.000**
Grievance handling 3.136 59.428 0.000**
Source: Computed from the questionnaire
Note: ** denotes significant at 1 per cent level
 The service quality of the banking services are taken as a base in ranking the

above services and collecting deposits ranked as highly satisfied and granting loans are

ranked as poor service. This is a customer analysis and true to some extent, because

banks are dealing with others money and very much interested in collecting deposits and

are conservative in granting loans.

Since the p value is less than 0.001, the null hypothesis that there is no significant

difference among the perceptions of the customers with respect to level of satisfaction on

the collecting deposits, granting loans, agency functions, utility functions, technical

services, customer relationship management, safe vault facilities, fund transfer services,

online banking and grievance handling provided by the banks in the sample area is

rejected at 1% level of significance. Hence, there exists a significant difference among

the perceptions of the customers with respect to level of satisfaction on the collecting

deposits, granting loans, agency functions, utility functions, technical services, customer

relationship management, safe vault facilities, fund transfer services, online banking and

grievance handling provided by the banks in the sample area.

Objective 3
The third objective is to analyze the factors motivating to use banking services

among the customers in Thiruvallur district, TamilNadu. The objective is full filled by

the following calculations.

Factor Analysis
Motivating factors to use banking services
In this part of the analysis, the scholar is trying to group the items into

factors, which motivate the customers to visit the bank and to avail themselves of

banking services. Each of the items is measured with likert’s scale on the level of

agreement and grouped by using the Principal component analysis. The results of the

analysis are presented below.

Table for KMO and Bartlett's Test results on sample adequacy

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .581
Bartlett's Test of Approx. Chi-Square 79.968
Sphericity Df 45
Sig. .001

Table for Communality values for motivating factors to use banking services
Communalities
Initial Extraction
Safety to the Funds 1.000 .563
Future Contingencies 1.000 .587
Financial Protection 1.000 .395
Builds Confidence 1.000 .655
Any Time can be Withdrawn 1.000 .591
Helps in Need 1.000 .649
Easy Way of Usage 1.000 .642
Creates lot of Financial Awareness 1.000 .504
Value for Money can be Realized 1.000 .719
Protection to the Family 1.000 .567
Extraction Method: Principal Component Analysis.

Table for Rotated Component Matrix for Motivation factors

 Rotated Component Matrixa
Component
1 2 3 4 5
Value for money can be realized .796 Economic Factors
Future contingencies .676
Protection to the family .738 Contingency Factors
Creates lot of financial awareness .675
Builds confidence .800 Trust factor
Helps in need Precautionary Factors .736
Any time can be withdrawn .615
Easy way of usage Safety Factors .761
Safety to the funds .648
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 7 iterations.

The motivating factors to use banking services in the rural areas are grouped

into five factors by using factor analysis. The factors identified are named as economic

factors, contingency factors, trust factors, precautionary factors and safety factors. These

factors are the primary motives to the customers to use banking services in the sample

area. It is also noted in the review of literature that these are the factors motivating

customers in all the areas irrespective of the place. Hence, the motivating factors to use

banking services are generic in nature.

Chi-Square Statistics
The researcher has applied chi-square statistics to find out the dependency

between the variable. The researcher has attempted to test whether is there any

association between education standards and motivating factors to utilize banking

services. The result of the analysis is shown below.

Null Hypothesis: There is no association between educational standard and

motivation factors to utilize banking service
Chi-Square values
Motivating Factors Chi-square value P value
Safety to the funds 8.217 0.51NS
Future contingencies 6.936 0.86 NS
Financial protection 9.358 0.67 NS
Builds confidence 4.097 0.98NS
Any time money can be withdrawn 20.757 0.54NS
Helps in need 6.752 0.68NS
Easy way of usage 10.708 0.55NS
Creates lot of financial awareness 9.765 0.63NS
Value for money can be realized 10.959 0.53NS
Protection to the family 4.640 0.86NS
NOTE: NS NON SIGINIFICANT

The above table highlights the chi-square value for educational standard with

respect to motivating factors. Since the p value is greater than 0.01, the researcher accepts

the null hypothesis that there is no association between education standard and

motivating factor.
 It can be inferred from the analysis that educational standard did not influence

the motivational factor to utilize the banking services as the both variables are

independent.

The researcher has applied the same chi-square statistics to know the association

between the occupations with respect to motivating factors for banking service.

There is no association between occupation and motivating factor to use bank.

Chi-Square values
Motivating Factors Chi-Square value P value
Safety to the funds 20.515 0.001*
Future contingencies 8.514 0.744NS
Financial protection 8.092 0.778NS
Builds confidence 12.534 0.404NS
Any time money can be withdrawn 5.462 0.941NS
Helps in need 23.396 0.005*
Easy way of usage 11.398 0.495NS
Creates lot of financial awareness 13.055 0.365NS
Value for money can be realized 7.787 0.802NS
Protection to the family 6.607 0.678NS

NOTE: NS NON SIGINIFICANT * SIGINIFICANT

 The result of the chi-square analysis is presented in the above table. It is clear

from the table that except two motivating factors such as safety to the funds and helps in

needs, other factors did not have any association as the p value is greater than 0.05.

Therefore, the researcher accepts the null hypothesis that there is no association between

occupations with respect to motivational factor for banking services except two factors

described above.

Objective 5

The fifth objective is to offer suggestions to minimize the gaps in the practice of

banking habits and the services offered to the customers in Thiruvallur district,

TamilNadu. The following suggestions full fills fifth objective.

Factor Analysis

Suggestions to improve the banking services

In this part of the analysis, the researcher is trying to group the suggestions

quoted as items in the questionnaire into factors, which can help to improve the banking

services. Each of the items is measured with likert’s scale on the level of approval and

grouped by using the Principal component analysis. The results of the analysis are

presented below.
 Table for communality value for suggestions to improve banking
services

Communalities
Initial Extraction
Development of proper infrastructure 1.000 .853
Popularization of banking products 1.000 .850
Establishment of good administrative systems 1.000 .783
Proper maintenance and control 1.000 .544
Improving the proximity facilities 1.000 .930
Improving the safety and security 1.000 .854
Controlling of frauds 1.000 .569
Strict vigilance on corruption 1.000 .860
Creation of awareness 1.000 .679
Establishment of customer care centers 1.000 .963
Govt. initiative towards banking institutions 1.000 .734
Involvement of NGOs 1.000 .675
Improvement of communication systems 1.000 .568
Encouraging people to start accounts 1.000 .776
Subsidies and incentives to the customers 1.000 .519
Encouraging private banks 1.000 .676
Awareness camps and Follow-up Services 1.000 .660
Micro credit schemes 1.000 .963
Encouraging women and BPL class 1.000 .719
Encouraging co-operative System 1.000 .484
Extraction method: principal component analysis.
 Table for Factor Loadings

Suggestions Loading Name of the Factor

Micro credit schemes .980 Innovation measures
Establishment of customer care centers .980
Improving the safety and security .916
Improving the proximity and facilities .962 Availability measures
Strict vigilance on corruption .922
Establishment of good administrative systems .873
Development of proper infrastructure .921 Accessibility
Popularization of banking products .917 measures
Encouraging women and BPL class .802 Promotional
Improvement of communication systems .591 measures
Encouraging co-operative system .566
Involvement of NGOs .769 Co-Operative
Encouraging private banks .696 measures
Awareness camps and Follow-up Services .697 Awareness Measures
Proper maintenance and control .599
Creation of awareness .505
Controlling of frauds .722 Safety Measures
Govt. initiative towards banking institutions .824 Policy Measures
Encouraging people to start accounts .876 Motivational
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 13
iterations.
 The suggestions to improve the quality of banking services offered in the

sample area are surveyed among the customers. The items quoted in the structured

questionnaire are rotated using the principal component analysis with Varimax with

Kaiser Normalization and nine types of factors are emerged with different score loadings.

Each of the factors identified is named on the basis of the nature of the items loaded. The

factors identified are Motivational factors, policy measures, safety suggestions, and

awareness related suggestions, co-operative measures, promotional measures,

accessibility measures, availability measures and innovative measures in the order of

descending order.

Conclusion

This chapter deals with the analysis and interpretation of data and discussion.
The problems existed in the rural area are lack of awareness and accessibility, lack of
motivating factors to attract the customers, safety and reliability of the banks. The
suggestions drawn are mostly related to promotional and customer relationship
management. This needs to be taken care on priority basis. Still banking in rural areas has
long way to go in providing the quality services to the rural poor at affordable cost. Let’s
pray for this noble cause to be happened at the earliest possible time for the benefit of the
rural customers and to the Indian economy at large. Rural India has lot of potential to
explore and grow mutually for the benefit of the primary sector and to the society at
large.