Customer Perception Towards Fee-Based Banking Services: A Comparative Study of Public and Private Bank Users in Lucknow District

This study set out to compare customer perception of fee-based banking services between public and private sector bank users in Lucknow District. Using a validated seven-item perception scale administered to 200 respondents, the study found a statistically significant, though modest, overall difference favouring public sector bank customers, driven specifically by differences in communication clarity, convenience, satisfaction, and price sensitivity rather than by differing views on pricing fairness or value for money. The findings challenge the assumption that private banks' technological edge automatically translates into superior customer perception of fee-based services, and instead point to communication and service delivery, rather than pricing structure per se, as the key differentiator between the two sectors. Based on these findings, the study recommends that: (i) private sector banks invest in clearer, more proactive disclosure of fee-based charges at the point of transaction, potentially narrowing the communication gap identified in this study; (ii) public sector banks build on their existing trust and communication advantage by improving perceived value for money, an area with room for improvement across both sectors; (iii) both sectors monitor price-driven switching intention closely, given that this was the single highest-rated perception item across the entire sample, indicating that fee escalation carries real retention risk irrespective of bank ownership type; and (iv) banking regulators and industry bodies consider standardising fee-disclosure formats across public and private banks, to ensure that communication quality, rather than institutional ownership, becomes the primary driver of customer perception.

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