Green Banking Initiative on Customer Perception: A Conceptual Model of Customer Knowledge on Green Banking System Towards Public Sector and Private Sector Banks in Southern Districts of Tamilnadu

Download Full-Text PDF Cite this Publication

Text Only Version

Green Banking Initiative on Customer Perception: A Conceptual Model of Customer Knowledge on Green Banking System Towards Public Sector and Private Sector Banks in Southern Districts of Tamilnadu

Sri. M. Narayanan1, Dr. S. Chandrasekaran2

1Research Scholar, Post Graduate and Research Department of Commerce, Vivekananda College, Tiruvedakam West, Madurai 625234.

2Assistant Professor of Commerce, Post Graduate and Research Department of Commerce, Vivekananda College, Tiruvedakam West, Madurai 625234.

Abstract:- The concept of green banking initiatives with customer perception has motivated banking institutions to introduce paperless, technology driven services and to perform their role as a banking sector in the customer awareness and knowledge in recent banking services. It is important for banks to understand the demand side of green banking initiatives since the ultimate success or failures of such investments are influenced by perceived knowledge of the end-user of the customer. An impact will be created by customer perception on features of green banking initiatives, on overall customer knowledge on green banking in the public and private sector banks in southern districts of Tamilnadu. Purpose of this study is to propose a conceptual model which perfectly features of green banking initiatives and their relationship with overall customer knowledge on green banking initiatives. This study found out overall perception and knowledge of green banking initiatives and recent change of traditional banking services.

Key words: Preferred usage of green banking channels, customer perception of green banking initiatives or services, awareness of green banking services, etc.,

1. INTRODUCTION

Green Banking is a term referring to practices and guidelines that make banks sustainable in economic, environment, and social dimensions. It is intended to develop sustainable banking with insignificant or zero impact on the people, societies and environment. Sustainable development is a global agenda in order to save our world from the depredations caused by human beings. Global warming, ozone depletion and climate change are alarming us every second. Reduce, Reuse and Recycle are the popular green strategies adopted by manufacturing and service industry. The banks and other financial institutions are connecting enterprises, clients and regulators on one platform. Penalties and incentives both are required to initiate green banking in a delimited mode therefore, banking sector is establishing some of the important metrics for measuring the performance of green practices i.e., energy usage, carbon usages, paper usage, water usage, solar power generation, green taxes, efficiency and productivity.

Green banking is emerging concept for environment sustainability it means promoting environment friendly practices for sustainable growth and reduces the carbon footprint from the banking industry. Using online banking instead of branch banking, paying bills online instead of mailing them, opening online bank account are now added advance to the banking technology contribution of banking sector.

  1. REVIEW OF LITERATURE

    Abdul Razaque and Niranjan Nayak (2017), in this paper entitled on Sustainable Development through Green Banking the Way Ahead for Banking Sector stated that attempts to discuss the different practices relating to green banking practices. In addition, that it is observed that both the public and private sector banks are aggressively working towards a paperless banking system. Few of the banks like SBI, PNB and ICICI have started dedicated programs related to specific business section, to reduce their carbon footprints. With regards to paperless banking activities like mobile banking and electronic fund transfer (RBI, 2015), private sector banks have shown a lot of aggression which is showcased by the higher rate of growth in the above mentioned systems. Finally, they have concluded that Indian banks have a long way to go, before they can become completely green organization. One of the important strategies which they need to follow is the adoption of LEED certification for green building. Under this certification, the offices of the banks will be using non-renewable sources of energy to power their offices, the lighting system of their offices will be energy-star rated, sewage and waste disposal system will be installed and rainwater harvesting will be followed. Banks can have a major impact on the environment, if they get cooperation from their clients. Banks should implement strict environment systems, before financing any project. Some of the systems are Environment Audit Management (EAM), Environmental Impact Assessment (EIM) and Annual Reporting System (ARS). They should provide

    incentives to green projects, and make it tough for polluting projects, to be sanctioned. Green banking can be used as an opportunity to reduce pollution and save the environment, which will lead to a sustainable growth.

    Deepa and Karpagam (2018), in this study entitled on A study on customers awareness on green banking in selected public and private sector banks with reference to Tirupur has carried the awareness on green banking among the customers are selected different banks. Also, it aims to find the customers usage relating to green banking service. It is necessary to identify various initiatives taken by bank on the concept of green banking in order to customer and make then user friendly. Researcher will study the impact of different age group of customers with regard to green initiatives taken by public and private sector banks. They presents that Indias growth account and obligation to cut its carbon intensity by 20-25 percent from 2005 levels by 2020 provides tremendous opportunities for Indian banks from funding sustainable projects to offering innovative products and service in the areas of green banking. The survival of the banking industry is inversely proportional to the level of global warming. Therefore, for sustainable banking, Indian bank should adopt green banking as a business model without any additional postponement. Finally, she concludes this study green banking will be mutually beneficial to the banks, industries and the economy. Not only green banking will ensure the greening of the industries but it will also facilitate in improving the asset quality of banks in future.

    The study has the following objectives.

  2. OBJECTIVES OF THE STUDY

    To study the level of perception of customers of green banking initiatives

    To know the customer knowledge for using green banking services

    To identify the motivating factors in green banking initiatives about the customers

  3. RESEARCH METHODOLOGY

    The primary objective of this empirical study was to observe the perception of customers towards Green Banking initiatives. The study also intended to know the most used channel of green banking initiatives. The study included various demographic factors and also envisaged to see the association if any between demographic factors and various green banking channels. Descriptive research design was used in the study. Data for the study was primary in nature which was collected from respondents from southern districts of Tamilnadu structured questionnaire. The study made use of non-probability sampling and convenience and judgment sampling techniques were deployed to collect the primary data. Both online and offline mode of distribution was used to collect the data and finally the data was obtained from 100 respondents which was also the final sample size of the study.

    4.1 Hypothesis

    o – There is no significant difference among different monthly income of customers usage Green banking Initiatives or

    services

      1. Gender of the Respondents

  4. DISCUSSION AND RESULTS

    In the study the data are collected from both the male and female respondents. So, gender factor has been considered important for the present study and the consolidated data is presented in Table- 1.

    Table – 1

    Gender of the Respondents

    S. No

    Gender

    No. of Respondents

    Percentage

    1

    Male

    43

    43

    2

    Female

    57

    57

    3

    Transgender

    0

    0

    Total

    100

    100%

    Sources: Primary Data

    The above table shows that, about the gender of the respondents among the 100 respondents, 43 respondents are male (43 %), 57 respondents are female (57%) and nil respondents of transgender (0 %).

    In other words 43 % of the respondents are in the gender of male, 57 % of the respondents are in the gender of female.

    It is inferred that the majority of the respondents 57 (57 %) are female.

      1. Educational Status of the Respondents

    Educational is a precious asset for every individual. Education makes people think wiser and decide matters with clear headedness. The following table presents the educational status of the respondents.

    Table 2

    Educational Status of the Respondents

    S.No

    Educational Status

    No. of Respondents

    Percentage

    1

    Primary education

    12

    12

    2

    Higher education

    13

    13

    3

    Under graduate

    51

    51

    4

    Post graduate

    24

    24

    Total

    100

    100%

    Sources: Primary Data

    The above table shows the educational status of the respondents. The educational status of the respondents is divided into four groups. They are primary education, higher education, under graduate, and post graduate.

    Among 100 respondents, 12 respondents have completed primary education, 13 of respondents are have completed higher education, 51 respondents are have completed under graduate, and 24 respondents have completed post graduate.

    It describe that, 12% of the respondents have completed at primary education, 13 % of the respondents have completed higher education, 51 % of the respondents have completed under graduate, and 24 % of the respondents have completed post graduate.

    It is inferred that the majority of the respondents 51 (51%) are having the educational status of under graduate.

    5. 3 Type of Banking Channel Preferred by the Respondents

    The following table shows what type of banking channels using the customers of public and private sector bank given

    below.

    Table 3

    Type of Banking Channels Preferred by the Respondents

    S. No

    Type of banking channels

    No. of respondents

    Percentage

    1

    ATM Services

    54

    54

    2

    Internet Banking Services

    28

    28

    3

    Telephone Banking Services

    7

    7

    4

    Mobile Banking Services

    11

    11

    Total

    100

    100%

    Sources: Primary Data

    The above table shows what type of banking channel prefer of the respondents. The type banking channels are divided by four groups. They are: internet banking services, ATM services, mobile banking services, and telephone banking services.

    Among the 100 respondents, 54 respondents are prefer of ATM services, 28 respondents are prefer of Internet banking services, 7 respondents are prefer telephone banking, and 11 respondents are prefer of Mobile banking services.

    In other words, 54 % of the respondents are prefer of ATM services, 28 % of the respondents are prefer of Internet banking services, 7% of the respondents are prefer of telephone banking services, and 11% of the respondents are prefer of mobile banking services.

    It is inferred that the majority of the respondents 54 (54 %) prefer the ATM Services.

      1. Category of Banking Services Preferred the Respondents

        The green banking initiatives are usage of the customers in public and private sector banks. The following use often in Green banking services given below table 5

        Table 4

        S. No

        Category of banking sector

        No. of respondent

        Percentage

        1

        Public sector bank

        39

        39

        2

        Private sector bank

        47

        47

        3

        Both

        14

        14

        Total

        100

        100 %

        Sources: Primary Data

        The above table shows the category of banking sector preferred the respondents. The E banking services usage the customers divided the three categories. They are: public sector, private sector and both.

        Among the 100 respondents, 39 of the respondents are preferred the banking sector of public sector, 47 of the respondents are preferred the banking sector of private sector bank and 14 of the respondents are preferred the banking sector of both in public and private sector bank.

        It is derived, 39 % of the respondents are preferred the banking sector of public sector, 47 % of the respondents are preferred the banking sector of private sector bank and 14 % of the respondents are preferred the banking sector of both in public and private sector bank.

        It is inferred that the majority of the respondents 47 (47 %) are have preferred the Banking sector of private sector banks.

      2. Usage of Green Banking Services of Customers

        The Green banking services are often use of the customers in public and private sector banks. The following use often in Green banking services given the classified and detailed given below table 5.

        Table 5

        S. No

        Banks

        No. of respondents

        Percentage

        1

        State Bank of India

        16

        16

        2

        Indian Overseas Bank

        16

        16

        3

        Tamilnadu Mercantile Bank

        33

        33

        4

        City Union Bank

        15

        15

        TOTAL

        100

        100 %

        Sources: Primary Data

        The above table shows the banking sector preferred the respondents. The green banking services usage the customers divided the four categories. They are: state bank of India, Indian overseas bank, Tamilnadu mercantile bank and city union bank. Among the 100 respondents, 16 of the respondents are using the green banking services of state bank of India, 16 of the respondents are using the green banking services of indian overseas bank, 33 of the respondents are using green banking services

        of Tamilnadu mercantile bank and 15 of the respondets are using green banking services of city union bank.

        It is derived, 16 % of the respondents are using the green banking services of state bank of India, 16 % of the respondents are using the green banking services of indian overseas bank, 33 % of the respondents are using green banking services of Tamilnadu mercantile bank and 15 % of the respondents are using green banking services of city union bank.

        It is inferred that the majority of the respondents 33 (33 %) are having use of E Banking services of Tamilnadu mercantile bank.

      3. Customers Usage Green Banking Services Among Different Monthly Income Factor Analysis

        The customers usage of Green banking services at the study area. In order to the customers usage of Green banking services among different monthly income. Factor analysis test is attempt that null hypothesis as,

        There is no significant difference among different monthly income of customers usage Green banking Initiatives or services

        Factor Analysis Table 6

        Descriptive Statistics

        Mean

        Std. Deviation

        Analysis N

        Use of Green banking services

        1.0000

        .00000

        100

        Monthly income

        3.0100

        1.56021

        100

        Sources: Primary Data

        The researcher make an analysis of factors in different banking services at different monthly income of respondents. The factor analysis at highly factor of usage of banking services at standard deviation of 1.56021. The factor analysis are usage of banking channels at influences about the monthly incomes.

        Table 7 Correlation Matrix

        Use of green banking services

        Monthly income

        Correlation

        Use of Green banking services

        1.000

        .

        Monthly income

        .

        1.000

        Sources: Primary Data

        At 5% of significance difference between the use of banking services among different monthly income of public and private sector banks in study area. The factor analysis of findings with the use of green banking services are monthly income difference very high standard deviation of descriptive analysis.

        Since P value at 0.005 of significance level of customer usage of green banking services, the null hypothesis is accepted.

      4. Customer Perception of Green Banking Initiatives or Services among different Age Group ANOVA

    The customer of different age group have been perception about the Green Banking Initiatives or services. In order to find out the significant difference between customer perceptions to the Green Banking Initiatives or services among the different age group in public and private sector banks in tirunelveli region. ANOVA test is attempted with the null hypothesis as,

    There is no significant difference among different age group of customer perception towards Green Banking Initiatives or services

    Table 8 ANOVA

    Sum of Squares

    Df

    Mean Square

    F

    Internet banking is less costly

    Between Groups

    91.046

    4

    22.761

    53.005

    Within Groups

    40.794

    95

    .429

    Total

    131.840

    99

    Simple and straight forward

    Between Groups

    177.798

    4

    44.450

    207.895

    Within Groups

    20.312

    95

    .214

    Total

    198.110

    99

    Transaction complex

    Between Groups

    129.347

    4

    32.337

    209.648

    Within Groups

    14.653

    95

    .154

    Total

    144.000

    99

    Internet banking is easy services

    Between Groups

    186.022

    4

    46.505

    342.793

    Within Groups

    12.888

    95

    .136

    Total

    198.910

    99

    Satisfied with internet banking

    Between Groups

    80.772

    4

    20.193

    36.149

    Within Groups

    53.068

    95

    .559

    Total

    133.840

    99

    Enough information

    Between Groups

    143.277

    4

    35.819

    188.699

    Within Groups

    18.033

    95

    .190

    Total

    161.310

    99

    Information about internet banking

    Between Groups

    157.684

    4

    39.421

    158.515

    Within Groups

    23.626

    95

    .249

    Total

    181.310

    99

    Bank offer during process

    Between Groups

    206.354

    4

    51.589

    231.115

    Within Groups

    21.206

    95

    .223

    Total

    227.560

    99

    Personal data protection

    Between Groups

    151.129

    4

    37.782

    285.287

    Within Groups

    12.581

    95

    .132

    Total

    163.710

    99

    More effective internet banking

    Between Groups

    160.270

    4

    40.067

    267.304

    Within Groups

    14.240

    95

    .150

    Total

    174.510

    99

    Convenient eliminates the risk

    Between Groups

    162.507

    4

    40.627

    223.701

    Within Groups

    17.253

    95

    .182

    Total

    179.760

    99

    Website are safe

    Between Groups

    129.837

    4

    32.459

    197.636

    Within Groups

    15.603

    95

    .164

    Total

    145.440

    99

    Problem about internet banking

    Between Groups

    164.034

    4

    41.009

    p>260.320

    Within Groups

    14.966

    95

    .158

    Total

    179.000

    99

    Sources: Primary Data Significance level at 5%

    At 5% level of significance the above table telling the relationship between different age group of respondents and customer perception towards on Green Banking. The Green Banking services are high level of perception regarding towards any problems about internet banking services, banks provide support. The medium level of customer perception towards internet banking is convenient because it eliminate the risk of carrying cash. The low level of customer perception towards Green Banking services the banks give enough information about the internet banking services and the very low level perception towards the Green Banking services is less costly than other banking services(branch, ATM, and Mobile banking).

    Since P value is more than 0.05, null hypothesis accepted. Hence there is no significant difference among different age group of customers in respect to customer perception towards Green Banking Initiatives or services.

  5. CONCLUSION

    The use of digital tools i.e., e-banking, mobile banking, e- statements, mobile statements, green channel counters, green processing, green loans, mobile vans, solar based automated teller machines or banking devices, installation of LED lamps, waste water management, composting, green toilets, paperless banking, green bins, green loans, clean development mechanism, air/noise/radiation control and many other green activities are initiated by the modern age banks. It is assumed that young, tech savvy and educated customer is comfortably adopting these practices whereas aged customers prefer traditional modus operandi. Therefore, this study was conducted on green banking in order to test and understand the perception of customers towards these practices. It have started using or initiating green channel counters, green data center, green rewards, green coin rating and green investments for developing a positive attitude among customers towards green banking initiatives. These activities are helping customers switching from traditional mode to green mode. This study proves a significant relation between perception of the respondents and awareness of green banking system. The study also proves that young respondents are frequently adopting the green banking initiatives whereas senior citizens and middle-aged respondents still prefer traditional practices. Majority of respondents had a positive response towards green banking initiatives and the most reliable sources for green banking related services are the bank employees. The study concluded that three fourth of the population surveyed were using or used automated teller machines and e- banking / internet banking quite frequently as compared to other green banking initiatives of the channels.

  6. REFERENCES

[1] Herath H.M.A.K. and Herath H.M.S.P, (2019), Impact of Green Banking Initiatives on Customer Satisfaction: A Conceptual Model of Customer Satisfaction on Green Banking, IOSR Journal of Business and Management (IOSR-JBM), 21 (1), 24 35.

[2] Amita Charan , Rekha Dahiya and Manpreet Kaur (2019), Customers Perception towards Green Banking Practices in India, THINK INDIA (Quarterly Journal), 22(4), 3653 3665.

[3] Abdul Razaque and Niranjan Nayak (2017), Sustainable Development through Green Banking the Way Ahead for Banking Sector, International Journal of Engineering and Management Research, 7 (3), 76 -81. www.ijemr.net

[4] Deepa and Karpagam (2018), A study on customers awareness on green banking in selected public and private sector banks with reference to Tirupur,

International Journal of Advanced Research and Development, 3 (1), 58 63.

[5] Bihari, S. C., & Pandey, B. (2015, January). Green Banking in India. Academic Journal, vol.7(1), pp.1-17.

[6] Biswas, M. (2011). Awareness of green banking initiative in selected public and private sector banks. Internation journal of Management, vol.3, pp.6-7.

[7] Bloem, A. M., &Cornelis, N. G. (2001, December). The treatment of Non-performing loans.

[8] Cucinelli, D. (2015). The Impact of Non-performing Loans on Bank Lending Behavior. Eurasian Journal of Business and Economics, Vol.8(16), pg.59- 71.

[9] Deka, D. G. (2015, Sept). Green Banking Practices: A study on environmental strategies of bank with special reference to State Bank of India. Indian Journal of Commerce & Management Studies, vol.VI(3), pp.11-19.

[10] IDRBT Publication, RBI. (2013). Green Banking .Hyderabad: IDRBT Publication .

[11] Kanak, T., & Singh, S. (2014). Green Banking: An Approach Towards Environmental Management. Prabhandan:Indian journal of Managemnet, vol.7(11), pp.15-25.

[12] Kaur, M. (2016, june). Green Banking: Need an hour. International education and research journal, vol.2(6), pp.46-47.

[13] Malhotra, A., & Bhardwaj, D. R. (2013, May). Green Banking Strategies: Sustainability through Corporate Entrepreneurship. Greener Journal of Business and Management Studies Vol. 3 (4),, Vol. 3 (4), pp.180-193.

[14] Nakamura, L. I., & Kasper, R. (2010, June). Credit Ratings and Bank Monitoring Ability. FRB of Philadelphia Working Paper No. 10-21, pg.1-59.

Leave a Reply

Your email address will not be published.