A Comparative Study on Service Quality and Customer Satisfaction between Public Banks and Private Banks in Iran

ABSTRACT: Privatization of banks started about ten years ago in Iran. The objective of privatization of banks was to limit the government intervention in banks. The public banks in Iran existed for a long period of time. Private banks however came to existence within the last ten years. Nevertheless they try hard to obtain customer satisfaction even after a short period of existence. This thesis investigates whether the private banks or the public banks have higher customer satisfaction. The analysis is based on a survey study where 220 clients of public and private banks were interviewed. A SERVQUAL questionnaire was used to test the clients‟ expectations and perceptions in banks‟ tangibles, reliability, responsiveness, assurance and empathy. Then the survey findings for public banks and private banks were compared and analyzed. According to the survey findings private banks were more successful to obtain customer satisfaction than the public banks. In other words, private banks‟ quality of service was closer to their clients‟ expectations than it was with the public banks‟ quality of service to their clients‟ expectations. Key words: Customer satisfaction, Private sector, Public sector, Banking, Comparative analysis. ……………………………………………………………………………………………………………………………………………………………………………………………………………………