Banking in Digital Era

Banking in Digital Era

Regaining Consumer Trust

Volume.9, No.1, Jan-June, 2019 ISSN: 2249-2143

International

Journal of

Business

Management

&

Research

1. Indian Banks: Transformation

Through E- Delivery Channels- Challenges

& Opportunities

59. An Analysis of Customer’s Preference

towards Traditional Banking and E-

Banking in Mansa District of Punjab

93. Impact of E-Commerce in Daily Life

International Journal of Business Management

&

Research

(A Bi-Annual Journal)

ISSN: 2249-2143

Volume 9, No. 1, Jan-June, 2019

-

An official publication of

University School of Business

Management Desh Bhagat University

Amloh Road,

Mandi Gobindgarh Fategarh Sahib-

147301 Punjab, INDIA

Year of Publication: 2019

© Desh Bhagat University

Disclaimer:

The views & opinions expressed and interpretations made in the Journal are solely of respective authors and should not be attributed to Desh Bhagat University. The editor disclaim all for any responsibility injury to

persons or property resulting from any ideas or product or practices referred in papers published in the Journal . All effects have been made to ensure accuracy, but the editors or DBU not be held responsible for any

remaining inaccuracies or omissions.

INTERNATIONAL JOURNAL OF BUSINESS MANAGEMENT & RESEARCH – A BI-ANNUAL JOURNAL (ISSN 2249-2143)

Contents Page No.

1. Indian Banks: Transformation Through E-Delivery Channels - Challenges and

Opportunities Prof.(Dr.) Bishnupriya Mishra ---1

2. Customer Services in Banks at Crossroads: An Empirical Analysis in Punjab

Dr. R.K. Uppal ---10

3. Linguistic and Social Impediments to Oral Fluency and the Speaking Skill of

Students at College of Business Administration – Kuwait University Ahmad Ali Sahiouni ---25

4. An Empirical Study on Calendar Anomalies in the Indian Stock Market

ThilakVenkatesan&Darshan Kumara. M ---42

5. An Empirical Study to Compare Non-Performing Assets in Private Sector Banks

in India Munish Gupta ---53

6. An Analysis of Customers’ Preference towards Traditional Banking and E-

Banking in Mansa District of Punjab RajniBala ---59

7. A Comparative Study on Profitability Analysis of Selected Indian Information

Technology Industries

Tegjit Kaur ---67

8. Medical Tourism: A Paradigm in our Country Pooja Rani ---84

9. Impact of E-Commerce in Daily Life

Tanvi Jindal ---93

International Journal of Business Management & Research

EDITORIAL BOARD

Patrons

Dr. Zora Singh

Chancellor, Desh Bhagat University

Editor-in-Chief

Dr. Shalini Gupta Professor

University School of Management

Desh Bhagat University

ASSOCIATE EDITORS

Dr. Rimpi Walia Professor

University School of Management,


Dr. Rajni Saluja Associate Professor

University School of Management


ADIVSORY BOARD

Prof. Azhar Kazmi Former Head, Dept. of Business Admin.

Aligarh Muslim University and

Visiting Professor of Management at

King Fahd University of Petroleum and Minerals,

Saudi Arabia

Dr. D P Goyal Director, IIM

Shillong

Dr. S.S. Prasada Rao Director, Academics

Gitam University

Vishakapatnam

Dr. Rattan Sharma Director,

Vivekananda Institute of Professional Studies Technical Campus

Delhi

Dr. Jasmeer Singh Saini Former HOD & Prof. of Management

National Institute of Technical Teacher Training & Research

Chandigarh

INTERNATIONAL JOURNAL OF BUSINESS MANAGEMENT & RESEARCH- A Bi-ANNUAL JOURNAL (ISSN 2249-2143)

IJBMR, 9(1), 2019 Page 1

Indian Banks: Transformation

Through E-Delivery Channels - Challenges and Opportunities

Prof.(Dr.) Bishnupriya Mishra

Director, P J Group of Institutions, Kesura, Bomikhal, Bhubaneswar

Abstract

The severe crises of 1991 gave birth to the new economic thought in the country. A bundle of measures were taken

to remove the various deficiencies and rigidities in the Indian economy. Hence, new economic policy was introduced

to mold the Indian economy to the right path. Financial sector reforms and banking sector reforms are the part and

parcel of economic reforms, which strengthen the economic reforms. Under the regime of banking sector reforms,

IT Act of 1999 gave new dimensions to the Indian banking sector. IT has created transformation in banking

structure, business process, work culture and human resource development. It affected the productivity, profitability

and efficiency of the banks to a large extent.

The present paper analyzes the major parameters of productivity, profitability of major banks in the pre and post e-

banking period. The paper concludes that performance of all the banks under study is much better in post-e-banking

period and further foreign banks are at the top position, whereas the performance of the public sector banks is

comparatively very poor. The paper suggests some measures to tackle the challenges faced by the banks particularly

public sector banks. At the end, paper suggests how public sector banks can convert the emerging challenges into opportunities?

Keywords: [Indian Banks, E- Delivery Channels]

Introduction

Strengthening the financial sector and improving the functioning of financial markets have been

the core objective of the financial sector reforms in India. The significant transformation of the

financial system in the country is clearly evident from the changes that have occurred in the

financial markets, institutions and products.

The country witnessed in 1990 an economic crisis leading to a fast decline in the GDP, a high

rate of inflation, adverse BOPs due to a widening gap in the current account deficit and a decline

in the foreign exchange reserves. The country had to borrow resources from foreign central

banks and other foreign government agencies against the pledge of gold so as to avoid a default

on international indebtedness. There were some banking sector deficiencies ahead the economy,

which were adversely affecting the economic growth of our country such as low productivity and

profitability, some public sector banks have been incurring losses year after year, poor customer

service, outdated work technology etc.

Keeping in mind all these distortions in the economic, financial and banking sectors, the

government of India and the RBI thought it was necessary to introduce reforms in the financial

and baking sector also, so as to promote rapid economic growth and development with stability

through the process of globalization, liberalization and privatization in the financial system to

make the financial system more competitive and gets integrated with the world economy through

internationalizations of financial markets in the world.


IJBMR, 9(1), 2019 Page 2

Banking Sector Reforms

The government of India, under the chairmanship of Sh. M. Narasimham, an Ex-Governor of

RBI, appointed the Narasimham Committee-I (NC-I) in April 1991. The committee examined all

the aspects relating to the structural organization, functions and procedures of financial system

and submitted its report on November 16, 1991. A number of reform initiations have been taken

to improve or minimize the distortions impinging upon the efficient and profitable functioning of

banks.

These reforms have improved the banks’ performance in an excellent way but due to the

cataclysmic changes taking place in the world economy towards globalization, there was need to

inject other doze of reforms. Hence, second phase of banking sector reforms are initiated by NC-

II in 1998 and these reforms are continuously regulating the entire banking system till date.

Objectives

The present paper analyzes the impact of IT on the transformation of banks during the second

phase of banking sector reforms. The specific objectives of the paper are:

1. To study the process and contents of bank transformation in the regime of post-second

banking sector reforms.

2. To analyze the comparative performance of public sector banks, new private sector banks

and foreign banks in pre and post e-banking period.

3. To study the challenges and opportunities for the banking industry particularly to the

public sector banks.

Hypothesis

1. The performance of all the banks under study is significantly better in post-e-banking

period than pre-e-banking period.

2. The performance of foreign banks is significantly better than new private sector banks

and public sector banks.

3. The performance of new private sector banks is significantly better than public sector

banks.

Research Methodology

The present paper is concerned with the Indian banking industry. Total nine top banks have been

selected on the basis of their market share in business in 2003-04, three banks from each bank

group i.e. public sector banks, new private sector banks and foreign banks.


IJBMR, 9(1), 2019 Page 3

Selected Banks

Public Sector Banks New Private Sector

Banks Foreign Banks

State Bank of India

(SBI) HDFC Bank Citibank

Bank of Baroda (BOB) ICICI Bank Standard Charted Bank (SCB)

Canara Bank (CB) Axis Bank The Hongkong and Shanghai Banking

Corporation (HSBC)

To compare the performance of selected banks in pre and post e-banking period, ratio

analysis method is used. The following ratios are analyzed to examine the performance of the

selected banks.

Labour Productivity Ratios

(a) Deposits per Employee

(b) Credits per Employee

(c) Business per Employee

Branch Productivity Ratios

(a) Deposits per Branch

(b) Credits per Branch

(c) usiness per Branch

Profitability Ratios

(a) Spread as Percentage of Working Funds

(b) Burden as Percentage of Working Funds

(c) Net Profit as Percentage of Working Funds

The study is concerned with the second-post banking reforms period i.e. 1998-99 to

2003-04. The time period is further divided into two parts i.e. pre-e-banking period (1998-2001)

and post-e-banking period (2001-04).

Bank Transformation and Information Technology

The second banking sector reforms gave much importance to the modernization and technology

up gradation. The IT Act, 1999 started the speedy process of e-banking. Transformation started

to take place in number of aspects such as structure, HRD, IT etc.

Bank Transformation

The term transformation in Indian Banking Industry relates to intermediately stage when the

industry is passing from the earlier social banking era to the newly conceived technology based

customer - centric and competitive banking. The activities of banks have grown in multi-

directional as well as in multi-dimensional manners. During transformation, all known

parameters of the earlier regime continuously change like:


IJBMR, 9(1), 2019 Page 4

(i) Capital Restructuring (ii) Financial Re-engineering

(iii) Information Technology (iv) Human Resource Development

Bank Transformation/ Stages of Transformation In Indian Banks

Stage of

Transformation Structure of Banks Objectives of the Banks

Nature of

Technology Used

Pre- Nationalization of

Banks (before 1969) Private Control of Banks Higher Profitability Manual Work

Post- Nationalization

of Banks (1969 - 90) Control of Govt. Social banking

Limited

Computerization

Economic Reforms

(1991- 2000)

- Entry of Foreign and

NPSBs

- Social Banking to IT Based

banks

- Higher Profitability

- Fierce Competition E - Banks

Current Stage Implementation of various

committees reports

- New Products and

Services

- Entry in Insurance

- CRM with IT

- Maximum use of

IT

- Mobile ATMs

Process of Transformation

Parameters of Transformation Process Implications

Structure

Business Re-engineering

Human Resource development

Work Culture

Information Technology

System, Process and Procedures

Ethos/Philosophy

IT as the catalyst of

Transformation

- Improved and efficient

structure

- Improved vision for business

-Productivity, profitability and

efficiency has increased

- Innovations are taking place

- International outlook

- Inspire employees

- More ethical work culture

- Vision for global economy

Information Technology

Delivery of bank’s services to a customer at his office or home by using electronic technology

can be termed as e-banking. The quality, range and price of these e-services decide a bank’s

competitive position in the industry. The virtual financial services can be largely categorized as

follows:

Automated Teller Machines:

- Cash withdrawals - Details of most recent balance of account

- Mini-statement - Deposit facility - Payments to third parties


IJBMR, 9(1), 2019 Page 5

EFTPoS: EFTPoS card used to initiate transactions:

- Authorization and transaction capture processes take place electronically.

- Transaction confirmed manually.

- Funds not debited electronically.

Remote Banking Services:

- Balance enquiry

- Statement ordering

- Funds transfer (payment) to third parties

- Funds transfer between customer’s different accounts

- Order traveler’s cheques and other financial instruments.

Smart Cards:

- One smart card can contain the functionality of several different types of cards issued

by different banks while running different types of networks.

- Smart card a truly powerful financial token, giving user access

- Debit facility

- Charge facilities

- Credit facilities

- Electronic purse facilities at national and international level.

Internet Banking: The latest wave in IT is Internet banking. It is becoming more obvious that

the Internet has unleashed a revolution that is affecting every sphere of life. Being an interactive

two-way medium, the Net, through innumerable websites, enables participation by individual in

B2B and B2C commerce, visits to shopping malls, books-stores, entertainment sides, and so on

cyberspace.

Results and Discussion

Labor Productivity:

Public Sector Banks

Labor productivity brings in light employee’s capacity to produce. The productivity in terms of

business per employee of all the three public sector banks is increased almost double time in all

the three banks during partially e-banking period i.e. 2001-04 as compared to that in non-e-

banking period i.e. 1998-2001, whereas variations in terms of co-efficient of variations are

maximum in non-e-banking period. From all the three public sector banks, Bank of Baroda

shows the highest productivity in both the durations i.e. Rs.1.53 lakhs during 1998-2001 and

Rs.2.57 lakhs during 2001-04 as compared to that of other two banks.

New Private Sector Banks

All the three new private sector banks show increase in their productivity in partially e-banking

period from non-e-banking period except UTI Bank, which shows decrease in its productivity.

Variations are maximum in non-e-banking period in all the selected banks. Although,

productivity of UTI Bank is decreased, even it shows the highest labor productivity in both the

durations i.e. Rs.11.41 lakhs during 1998-2001 and Rs.9.79 lakhs during 2001-04 whereas ICICI


IJBMR, 9(1), 2019 Page 6

Bank is following UTI Bank with labor productivity of Rs.7.83 lakhs and Rs.9.53 lakhs

respectively during both the durations.

Foreign Banks

Labor productivity is increased in all the selected foreign banks in all the years under study and

variations are maximum in non-e-banking period. It shows increase almost of Rs.2-3 lakhs

during the e-banking period as compared to that during non-e-banking period. It is the highest in

Citibank i.e. Rs.12.70 lakhs during 1998-2001 and Rs.17.32 lakhs during 2001-04 with the major

difference from the other banks whereas SCB shows Rs.8.05 lakhs and HSBC Rs.6.86 lakhs

during 2001-04.

Branch Productivity

Public Sector Banks

The branch productivity of public sector banks, which depicts the capacity of a branch to

produce, is also higher during partially e-banking period in all the banks as compared to non-e-

banking period, whereas variations are maximum in non-e-banking period in all the banks under

study. It is the highest in SBI i.e. Rs.33.29 cr. during 1998-2001 and Rs.47.93 cr. during 2001-04

and Canara Bank is following the SBI with Rs.47.01 cr. business per branch during 2001-04

where Bank of Baroda shows Rs.37.65 cr. productivity ratio.


The branch productivity of new private sector banks is higher during e-banking period as

compared to non-e-banking period in case of HDFC Bank i.e. Rs.148.39 cr. during 2001-04 that

comes up from Rs.102.42 cr. during 1998-2001, where ICICI Bank shows increase from

Rs.127.22 cr. to Rs.242.03 cr. almost double, but UTI Bank shows decrease in its branch

productivity from Rs.166.32 cr. to Rs.164.21 cr. during the non-e-banking and partially e-

banking period respectively. Overall, branch productivity is the highest in case of UTI Bank

during 1998-2001 i.e. Rs.166.32 cr. but during 2001-04 ICICI Bank leads to other banks with

Rs.242.03 cr. with an excellent growth in its productivity.

Foreign Banks

The branch productivity shows fluctuations in all the three foreign banks in all the years but in

case of Citibank it is decreased from Rs.1631.34 cr. during 1998-2001 to Rs.1396.22 cr. during

2001-04 with 12.82 pc fluctuations in terms of co-efficient of variations. SCB and HSBC shows

increase in their branch productivity during the e-banking period over the non-e-banking period.

Overall, it is the highest in both the durations in Citibank i.e. Rs.1396.22 cr. in 2001-04 even it

shows decrease in its productivity, both the other banks followed this bank.

Overall, it can be concluded that labor productivity and branch productivity is better, showing

excellent growth during the e-banking period as compare to non-e-banking period. New

electronic techniques are used to attract more and more customers especially, e-channels are used

to meet the increasing expectations of the customer. On the other hand, labor and branch

productivity is the highest in all the foreign banks with Citibank at the top position, new private


IJBMR, 9(1), 2019 Page 7

sector banks are following foreign banks even in case of ICICI Bank & UTI Bank, and labor

productivity is more as compared to that of SCB & HSBC. Public sector banks are far behind the

foreign banks and new private sector banks with large extent of difference, which cannot be

ignored, mainly due to their non-electronic work culture.

Profitability Ratios

Public Sector Banks

Profitability of public sector banks is decreasing during 1998-2001 i.e. non-e-banking period,

but it shows increasing trend in the partially e-banking period i.e. 2001-04, resulting more

profitability in partially e-banking period as compared to that in non-e-banking period. But

profitability of Canara Bank is increased almost three times, it shows the highest profitability

during 2001-04 i.e. 1.20 pc, even it is the least during 1998-2001 i.e. 0.44 pc, one reason is

decrease in its burden, where Bank of Baroda shows the highest 0.70 pc during 1998-2001

following Canara Bank with 0.97 pc profitability ratio in 2001-04. Overall, Canara Bank shows

much better profits having positive impact of technology.


Profitability of all the three new private sector banks shows fluctuating trend, it is more in e-

banking period in ICICI Bank & UTI Bank but lesser in case of HDFC Bank as compared to the

profitability during non-e-banking period. Profitability variations are the highest during non-e-

banking period. Profitability of HDFC Bank is decreased during partially e-banking period i.e.

from 1.42 pc to 1.24 pc mainly due to decrease in spread which is further witnessed by falling

interest income, but even shows the highest profitability as compared to ICICI Bank i.e. 0.90 pc

and UTI Bank i.e. 1.02 pc during 2001-04.

Foreign Banks

Profitability of selected foreign banks shows fluctuating trend during the study period but

with tremendous increase in their profitability during partially e-banking period. Profitability of

all the three banks is higher during 2001-04 as compared to that during 1998-2001. Fluctuations

are maximum during non-e-banking period in Citibank but these are the highest during 2001-04

in case of other banks. Profitability of SCB is the highest during 1998-2001 i.e. 1.84 pc and

during 2001-04 i.e. 2.22 pc followed by Citibank with 1.37 pc and 1.66 pc profitability

respectively during both time periods. Overall, profitability of all the foreign banks is increased

mainly due to their check on burden.

It can be concluded that profitability of foreign banks is the highest with SCB at the top

position, where new private sector banks are following foreign banks, initiated to fill this gap but

profitability of public sector banks is far behind the profitability of foreign banks and new

private sector banks. Even then all the three bank groups show increase in their profitability

during e-banking period.

Testing of Hypotheses

The table given below indicates that performance of almost all the banks is significantly

better in the e-banking period except some banks.


IJBMR, 9(1), 2019 Page 8

Table: Testing of Hypothesis in Employee Productivity, Branch Productivity and

Profitability during Pre and Post e-banking Period (t-test)

Banks Employee Productivity Branch Productivity Profitability

SBI 12.96* 24.43* 2.08

BOB 311.00* 18.37* 1.22

CB 22.94* 15.50* 7.05*

HDFC 4.80* 4.14* 0.69

ICICI 1.24 2.37 0.10

UTI 1.69 0.28 3.95*

Citibank 1.63 2.09 1.10

SCB 4.12* 0.90 1.39

HSBC 5.58* 3.37* 0.68

Note: * Significant at 5 percent level (2-tailed)

This table indicates that the performance of foreign banks is better than new private sector banks

and also public sector banks. Similarly, the performance of new private sector banks is better

than public sector banks.

Table: Statistical Analysis of Comparative Performance of Selected Banks of Three Bank

Groups (t-test)

Banks Employee Productivity Branch Productivity Profitability

Citibank & HDFC 5.85* 11.76* 2.81*

Citibank & SBI 12.09* 12.07* 9.55*

HDFC & SBI 11.58* 171.98* 6.14*

Note: * Significant at 5 percent level (2-tailed)

Future Areas of Indepth Research

1. Study of performance of each e-channel at bank and bank group level separately.

2. Study of cost-benefit analysis of IT related aspects.

3. Study of quality of customer service through e-banking services.

4. Feasibility of e-banking in rural and semi-urban areas especially the management of

transformation.

Conclusion

The paper concludes that transformation is taking place almost in all categories of the banks.

This transformation will helpful to cope with new economic and financial policies of the banks.

IT is playing a crucial role to create the drastic changes in the banking industry particularly in the

new private sector and foreign banks. The private banks take a big share of cake; our public


IJBMR, 9(1), 2019 Page 9

sector banks are still lagging behind regarding the various financial parameters. The immense

opportunities are also available for the public sector banks if they change/modify and adopt new

policies to combat the different recent challenges.

It can be concluded that mere introduction of IT alone will no be sufficient to bring necessary

performance improvement and to get the competitive edge. Intelligent people are required to use

such intelligent tools. Thus, even though IT management is a challenge flow in future banking

scenario, marketing not technology is going to be the challenge.

References

Arora, Kalpana (2003). Indian Banking: Managing Transformation through IT. IBA

Bulletin, 25, (March), 134-138.

Avasthi, G.P.M. (2000-01). Information Technology in Banking: Challenges for

Regulators. Prajnan, 29 (4), 3 -17.

Bajaj, K.K. (2000). E-Commerce Issues in the Emerging Hi -Tech. Banking

Environment. The Journal of The Indian Institute of Bankers, (Jan- March).

Bakshi, S. (2003). Corporate Governance in Transformation Times. IBA Bulletin, 25 (3),

(March).

Bhasin, T.M. (2001). E-Commerce in Indian Banking. IBA Bulletin, 23 (4 & 5), (April –

May)

Ganesh, S. (2001). Frauds In A Computerized Environment. IBA Bulletin, 23 (12),

(December), 19-25.

Garg, I.K. (2003). Indian Banking in Transition: Some Management Challenges. IBA

Bulletin, 25(3), (March), 121-123.

Gupta, R P. (2001). Banking in the New Millennium: Strategic Management Issues. IBA

Bulletin, 23 (3), (March), 38-45.

Jalan, B. (2003). Strengthening Indian Banking and Finance: Progress and Prospectus.

IBA Bulletin, 25 (3), (March)

Kulkarni, R. V. (2000). Changing Face of Banking from Brick and Mortar Banking to E-

Banking. IBA Bulletin, (January).

Mohan, R. (2003). Transforming Indian Banking: In Search of a Better Tomorrow. IBA

Bulletin, 25 (3), (March).

Nair, S.N. (2000). E-Commerce and the Emergence of E-Banking. IBA Bulletin, 22 (10),

(October).

Shapiro, C (2000). Will E- Commerce Erode Liberty. Harvard Business Review, (May-

June).

Shastri, R.V (2001). Technology for Banks in India- Challenges. IBA Bulletin, 23 (3),

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IJBMR, 9(1), 2019 Page 10

Customer Services in Banks at Crossroads: An Empirical Analysis in Punjab

Dr. R.K. Uppal Director, ICCSR Sponsored Major Research Project, D.A.V. College, Malout (Punjab)

Abstract

Apart from attracting new potential customers, business organizations, these days, realize the importance of

retaining the existing customers. Developing long-term relationship with latter, requires the firms to ensure

customer delight through quality service. Hence, to have a competitive edge, companies/multinational companies

are focusing on service quality. In this study, an attempt has been made to analyze the desirability of 1200 bank

customers regarding the reputation, service, performance, pricing pattern and location of a bank and the service they actually perceive. Hence, present paper studies the perceptions of bank customers regarding the gap between

desirability and availability of banking services in three bank groups, namely, public sector, private sector and

foreign banks. The study was conducted in Ludhiana district of Punjab in the month of October; 2018.Three bank

branches working in Ludhiana district have been taken from respective bank groups. On the basis of five point

Likert type scale, the study concludes that desirability regarding all parameters is very high as compared to

availably and hence, gap is widening. Various statistical tools like average, standard deviation, co-efficient of

variation and weighted average scores has been used to compare the perceptions of customers regarding banking

services of various banks. On the basis of empirical analysis regarding perceptions of bank customers about

desirability and availability of banking services, the paper offers some recommendations to improve their services,

reputation in the market, technology, location and pricing pattern. The paper also highlights the problems that may

arise while implementing these measures and recommends solutions to remove/minimize these hurdles.

Keywords: [Desirability, Availability of Banking Services, Desirability -Availability Gap, Measures to Bridge

- Widening Gap]

Introduction

New Economic Policy of 1991, globalization, liberalization and deregulation have made

customers more concerned about their money value and surrounding environment that leads to

high customer expectations from service providers. They are also becoming increasingly critical

of service they experience. Therefore, customer satisfaction is the prime driver of marketing

process. According to numerous thinkers, customer is the fundamental reason for the existence

of business (Drucker, 1973; Levitt, 1983). Moreover, there is enough evidence that the overall

performance of a firm is linked with customer satisfaction (Anderson, Fornell and Lehmann,

1992). In fact, the superior performance of world’s largest and reputed organizations like Ford,

General Motors, Nestle, Pepsi, Cola, Proctor & Gamble, GE, Microsoft, etc. is largely attributed

to the quality of products/services they offer to their customers.

Banking being a service based sector is largely affected by the quality of service offered.

Moreover, with the entry barriers relaxed, we can notice increasing competition in the Indian

banking industry. The more focused private sector banks, both domestic and foreign, are

spreading their wings in the urban areas and metropolis aggressively. Innovative and diversified

products and sophisticated information technology and better customer relationship management

practices are the strengths which are providing edge to a bank over others. In nutshell, assuring


IJBMR, 9(1), 2019 Page 11

service quality to clients seems to have become all the more important for existence, growth and

differential advantage over their competitors for every bank in India irrespective of their

ownership pattern & size. A review of recent literature, noticeably by Lee and Hing (1995),

Steven, et. Al (1995), John and Tyas (1996), Oh and Jeong (1996), Sesha Sai (1999), Harsh

(2001), Simla and Swain (2002) and Mushtaq (2003) suggests that customer satisfaction is

important because it directly linked to return behaviour. Therefore, to achieve the service

excellence, banks must strive for ‘Zero defections’, retaining every customer that the company

can profitably serve. ‘Zero defections’ require continuous efforts to improve the quality of the

service delivery system.

However, quality cannot be improved unless it is measured. Hence, service quality trends, today,

play an important role in service organizations because excellent service quality is not an

optional competitive strategy which may or may not be adopted to differentiate one service

organization from another, but it becomes essential to corporate profitability and survival.

Scheme of Paper

The present paper has been divided into six sections. After the introduction, section II reviews

some related studies. Section III fixes some research objectives, hypothesis, highlights the

research methodology and the data base. Section IV is devoted to the results and discussion.

Section V gives some recommendations to enhance the service quality in banking industry,

implications of the study, limitations of the study and future areas for comprehensive research

and last section concludes the paper.

II. Review of Literature

For identifying the research gap sought to be bridged by the study, the existing literature on the

subject is being reviewed in the following manner.

Lytle and Mokwa (1992) & Parasuraman (1988) a consumer is satisfied if the service quality

conforms to his needs and requirements. The greater the service conformance to the requirements

of the consumers, the better is the service quality and consequently the greater will be the

consumer satisfaction.

Bolton & Drew (1987) and Ostwald (1998) observed that consumer satisfaction was strongly

related to quality and service quality was a pre-requisite of consumer satisfaction.

Buzzle and Gale (1987) revealed that in the long-run, the most important single factor affecting a

business firm’s performance is the quality of its products and services, relative to those of its

competitors.

Bolton and Drew (1988); Zeithaml (1998) perceived quality is an important measure in

influencing the consumers’ value perception and in affecting the intention to purchase products

or services.

Gronroos (1982) had identified two service quality dimensions, viz., functional quality and

technical quality. Functional quality represents the perception of the manner in which the services


IJBMR, 9(1), 2019 Page 12

are delivered. Technical quality or outcome quality on the other hand, represents the outcome of

the service act or what the customer receives in the end (Brady and Cronin, 2001).

Smith (1987) claimed that satisfaction with service is related to confirmation or disconformation

of expectation.

Lewis (1991) service quality is considered as a measure of how well the service delivered

matches customer’s expectations or providing the customer with what he wants, when he wants

it, and at acceptable cost, within the operating constraints of the business. Providing a better

service than the customer expects.

Kotler (2006) the recent trend in many service organizations is to consider service quality as a

critical factor enabling them to achieve a differential advantage over their competitors.

Albrecht and Zemke (1985) Organizations which are becoming leaders in service quality are

characterized by the commitment of the top management and a corporate culture that encourages

a focus on customer and quality throughout the company.

Ammayya (1996) suggested the adoption of modern banking technology as a means to improve

customer services.

Gurney (1999) with ever escalating customer expectations, companies have to offer additional

values to make an ever-lasting impression in the minds of customers, because merely delivery of

satisfaction as the confirmation of expectations is considered as minimum threshold. Hence, it is

important for business managers to understand the provisions, symbols and tangible clues used

by the customers in evaluating the service offered by business organizations. Quality is thus

relative and subjective and depends on the perceptions and expectations of the customer with

respect to the service offered.

Levitt (1981) proposed that customers use appearances to make judgments about realities. The

less tangible a product is the more powerful shall be the effect of packaging while judging that

product.

Berry (1980) argued that due to intangible nature of services, customers use elements associated

with the physical environment when evaluating service quality. Managing the evidence and using

the environmental psychology are often seen as important marketing tools.

Heskett, et al. (1990) observed that across a wide range of business, the pattern is the same: the

longer a company keeps a customer, the more money it stands to make. The cost of poor quality,

on the other hand, relates to the lack of responsiveness to the customer, dissatisfied customers,

complaints and adverse word-of-mouth communications and dissatisfied employees (Crosby,

1979; Goodman, et al., 1986).

Research Gap

The review of literature exhibits that no comprehensive study has been conducted regarding the

gap between desirability and availability of banking services, their reputation, technology,

pricing pattern and location of the bank. The present study is directed to know the extent of gap

between desirability and availability of banking services and some recommendations are

prepared to bridge this gap.

III. Objectives, Research Methodology & Data Base


IJBMR, 9(1), 2019 Page 13

Objectives

To study the perceptions of bank customers regarding the desirability of banking services.

To study the perceptions of bank customers regarding the availability of banking services.

To explore the gap in the perceptions of bank customers of these banks regarding the

desirability and availability of banking services.

Hypothesis

There is no difference in the perceptions of respondents of three bank groups regarding the

desirability of banking services.

Similarly, there is no difference in the perceptions of respondents of three bank groups

regarding the availability of banking services.


In the light of aforesaid objectives and hypothesis, an instrument was developed to collect

information on desirability of bank customers regarding reputation, services, technology, pricing

pattern and location of a bank. Similarly, information is collected regarding the availability of

above said aspects.

The present study was conducted in the Ludhiana district of Punjab in October, 2008. The study

is restricted to three banks with one each from the public sector, private sector and foreign banks.

The public sector bank taken for study is State Bank of India (SBI), which is the largest bank in

India. The private sector bank is ICICI bank. It is one of the leading banks in the private sector

and it has been rated the best bank in terms of service quality by a recent survey of Money

Outlook. Foreign bank is Citi bank. The sample of the study comprises 1200 bank customers. For

data collection, the respondents were selected with the help of an abridged list of random

numbers. All important demographic characteristics like age, education and profession of the

respondents are taken into consideration.

Likert type five point scale was used to know the desirability and availability of the banking

services. Various statistical methods like percentage, standard deviation, coefficient of variation

and weighted average score were used to compare the results. To test the hypothesis, chi^ test is

used.

Parameters of Study

1. Service

(a) Simple & short Procedure

(b) Co-operative Staff

2. Reputation

(a) Excellent Credit Rating

(b) Strong Financial Position

3. Performance

(a) Security

(b) Service Speed

4. Technology


IJBMR, 9(1), 2019 Page 14

(a) ATM

(b) Smart Cards

(c) I-banking

(d) M-banking

(e) Tele-banking

5. Price Pattern

(a) Minimum Opening Account

(b) Minimum Service Charges

6. Location

(a) Near to Important Place

7. Overall-Satisfaction

Data Base

Field Survey conducted in the month of October, 2008 at Ludhiana district of Punjab.

IV. Socio-Economic Profile of Customers

In the present study, the main focus of analysis is on service quality in banking industry.

Opinions of three bank group customers have been calculated separately. The total sample

survey of 1200 customers has been taken into consideration (Table1).

Table 1: Socio-Economic Profile of Customers

Group Number

N=1200

%

Bank Type

1. G-I

2. G-II

3. G-III

400

400

400

33.33

33.33

33.33

Present Age

1. Upto 25

2. 26-35

3. 36-45

4. 45-55

5. Above 55

296

476

220

168

40

24.67

39.67

18.33

14.00

3.33

Occupation

1. Service

2. Business

3. Industry

4. Agriculture

5. Professional

6. Others

380

304

272

16

16

212

31.67

25.33

22.67

1.33

1.33

17.67


IJBMR, 9(1), 2019 Page 15

Education

1.Matriculate

2. Graduate

3. Post Grad.

4. Professional

116

408

444

232

9.67

34.00

37.00

19.33

Total 1200 100.00

Source: Field Survey

G-I: Public Sector Banks, G-II: Private Sector, G-III: Foreign Banks

Further these respondents are equally divided into three bank groups i.e. public sector banks (G-

I), private sector banks (G-II) & foreign banks (G-III). Among these customers, 37 pc customers

are post-graduate & similarly 40 pc are the youngsters. Service class and business class

dominates in the respondents. The sampled respondents are divided as per the pattern mentioned

in table 1.

Results and Discussion

(a) Perceptions of Bank Customers Regarding the Desirability of Banking Services

Regarding the services of a bank, 75.67 pc customers want that the various procedures of a bank

should be simple and easy because in a country like India, majority of customers are illiterate or

less educated (Table 2). They are unable to understand the various intricacies of procedures to

avail any banking service. Therefore, it is necessary that the procedure to open a new account,

issue of ATM, Debit/Credit card, etc. should be simple, short and easy. Further, same percentage

of customers desired that the bank employees should be co-operative and polite. They desired

that the bank employees should serve them with smile on their face.

Regarding the reputation of a bank, 83 pc and 64.33 pc respondents responded that they will go

for a bank which has strong financial position and excellent credit facilities as compared to other

banks. Now-a-days, banks are providing uncountable services to their customers. But with the

availability of products, high speed service is also desirable. Nearly 74 pc customers desired that

the banks should provide high speed services because it directly affects their satisfaction. Banks

have provided their customers the facility of any time and anywhere banking. But the security of

customers’ assets availing these services is also the responsibility of banks. About 74.33 pc

customers have desired the security of their assets and identity.

Present age is a e-age. In this age customers have become more conscious and demanding. They

go for a service provider who provides services well equipped with latest technology. E-banking

represents this e-age. E-banking provides services through various e-channels like ATM, smart

cards, internet banking, mobile banking, etc. Nearly 88 pc of respondents desired that all banks

whether it is public or private should provide the facility of ATM cards. Similarly, for smart

cards, majority of respondents (57.50 pc) have shown their desirability. Nearly 63 pc, 59 pc and

57 pc customers have desired internet, mobile and tele-banking services in their banks.


IJBMR, 9(1), 2019 Page 16

Regarding the pricing pattern of banks, 72 pc customers highly desired that the banks should

keep minimum amount for opening an account.

Table 2: Perceptions Regarding Desirability of Banking Services

(Per cent)

Parameters Ab.Unnec. Unnec. Some

what

Desirable Highly Dis. WAS

Service

1. Simple & short

Procedure

2. Co-operative

Staff

2.33

-

0.67

2.67

4.33

3.67

17.00

18.00

75.67

75.67

1.63

1.67

Reputation

1. Excellent Credit

Rating

2. Strong Financial

Position

-

1.67

0.33

0.33

9.00

1.33

26.33

13.67

64.33

83.00

1.55

1.76

Performance

1. Security

2. Service Speed

1.67

1.67

2.00

1.67

3.33

3.00

18.67

20.00

74.33

73.67

1.62

1.62

Technology

1. ATM

2. Smart Cards

3. I-banking

4. M-banking

5. Tele-banking

1.33

0.33

-

2.00

0.67

0.33

1.33

1.00

1.67

4.00

4.33

6.17

7.00

6.00

10.33

6.67

34.67

29.33

31.33

28.33

87.33

57.50

62.67

59.00

56.67

1.78

1.48

1.54

1.44

1.36

Price Pattern

1. Min. Opening

Account

2. Min. Service

Charges

0.33

1.33

1.67

2.00

5.67

14.00

20.33

22.67

72.00

60.00

1.62

1.38

Location

Near to Important

Place

-

2.00

13.00

33.67

51.33

1.34

Overall-Satisf. 2.00 1.33 7.00 21.67 68.00 1.52

Source: Field Survey Results

Note: Ab.Unnec.-Absolutely Unnecessary, Dis.-Desirable, Satisf.-Satisfaction

Similarly, 82.67 pc customers are of opinion that banks should keep minimum charges for

products and services offered. About the location of the bank 85 pc customers opined that banks,

particularly, ATM machines should be near to important place like hospitals, schools, colleges,

shopping centers, etc.


IJBMR, 9(1), 2019 Page 17

Overall satisfaction of a customer from his bank is very necessary because it directly affects the

reputation of a bank. About 89.67 pc customers are satisfied by the overall services, performance

and service quality of the bank.

In case of all parameters under study WAS is greater than one which indicates that bank

customers have shown high desire about these services in their banks.

(b) Perceptions of Bank Customers Regarding the Availability of Banking Services

Although 92.67 pc respondents desired simple and short procedure of banks but only 48.33 pc

customers responded that banks have short and easy procedures (Table 3). Further only 51.34 pc

customers are satisfied from bank employees. Regarding the reputation of banks, 79.67 pc

customers responded that their banks have strong financial position in the market. To study the

performance of a bank, we have taken security and service speed of a bank and for the

availability of both parameters 70 pc and 69.66 pc customers respectively agree. Every customer

wants that his bank should be technically sound. Regarding the availability of ATMs, smart

cards, I-banking, M-banking and Tele-banking 84.34, 49.33, 43, 40.33 and 39.66 pc customers

respectively agree. Regarding the price pattern of a bank, except 64 pc and 44.66 pc customers,

all other complained that banks have adopted high pricing pattern. Nearly 77 pc customers are

satisfied by the location of banks. Although majority of customers are satisfied by the overall

services of banks but this majority is not sufficient to keep the banking industry on top in service

level. Weighted average score in case of all parameters is less than one except location and

financial position of the banks which indicates that except these two parameters, customers are

dissatisfied by the banking services.

Table 3: Perceptions Regarding Availability of Banking Services

(Per cent)

Parameters Not at all Not

Avail.

Some

what

Avail. Highly Avail. WAS

Service

1. Simple & short

Procedure

2. Co-operative

Staff

0.33

1.00

20.67

16.33

30.67

31.33

37.00

36.67

11.33

14.67

0.38

0.48

Reputation

1. Excellent Credit

Rating

2. Strong Financial

Position

3.33

-

9.00

-

13.33

20.33

38.00

30.00

36.33

49.67

0.95

1.29

Performance

1. Security

2. Service Speed

0.67

4.67

6.33

3.00

23.00

18.67

51.67

56.33

18.33

17.33

0.81

0.79

Technology


IJBMR, 9(1), 2019 Page 18

1. ATM

2. Smart Cards

3. I-banking

4. M-banking

5. Tele-banking

2.00

18.00

9.33

17.33

17.33

4.67

12.33

9.00

13.00

15.67

9.00

20.33

38.67

29.33

27.33

34.67

29.00

23.33

28.00

26.33

49.67

20.33

19.67

12.33

13.33

1.25

0.21

0.35

0.05

0.03

Price Pattern

1. Min. Opening

Account

2. Min. Service

Charges

1.00

2.67

12.33

28.33

22.67

24.33

45.00

29.33

19.00

15.33

0.69

0.26

Location

Near to Important

Place

-

4.33

19.00

40.33

36.33

1.09

Overall-Satisf. - 7.33 31.33 43.67 17.67 0.72


Note: Avail. - Available, Satisf.-Satisfaction

(c) Perceptions regarding the gap between desirability and availability of banking services

Regarding simple & short procedure and co-operative staff, average gap is 1.247 and 1.257

respectively which indicates that customers are less satisfied by the services of banks which need

to be improved (Table 4). To judge the reputation of a bank we have taken excellent credit rating

and strong financial position of the bank. In both the cases, average gap is 0.587 and 0.467 which

indicated that customers are less satisfied from both the parameters of reputation. Security is the

major aspect that attracts a customer to join an organization but in this case, average gap is 0.797

which shows that customers feel less secure with banks. Similar is the case with service speed

where average gap is 0.837.

Table 4: Perceptions Regarding the Gap between Desirability and Availability of Banking

Services

Parameters Average SD CV

Service

1. Simple & short

Procedure

2. Co-operative

Staff

1.247

1.257

1.267

1.308

101.648

104.083

Reputation

1. Excellent Credit

Rating

2. Strong Financial

Position

0.587

0.467

1.292

1.047

220.220

224.290

Performance

1. Security

0.797

1.201

150.732


IJBMR, 9(1), 2019 Page 19

2. Service Speed 0.837 1.106 132.196

Technology

1. ATM

2. Smart Cards

3. I-banking

4. M-banking

5. Tele-banking

0.530

1.250

1.187

1.387

1.337

1.087

1.611

1.395

1.634

1.668

205.169

128.851

117.530

117.848

124.813

Price Pattern

1. Min. Opening

Account

2. Min. Service

Charges

0.933

1.117

1.209

1.429

129.560

128.002

Location

Near to Important

Place

0.257

0.968

377.230

Overall-Satisf. 0.807 1.141 141.487


In case of smart cards, I-banking, M-banking and Tele-banking, average gap is more than one

which indicates that customers are highly dissatisfied by these technical services of banks.

Although, in case of ATMs also, customers are less satisfied but average gap in this case is less

than one. Pricing pattern and location of banks are not exceptional cases. In both cases, average

gap is 0.933 and 0.257 respectively. Overall customers are less satisfied with the available

banking services. Coefficient of variation indicates that there is instability in the opinion of bank

customers regarding location of bank, availability of ATM cards, service speed, excellent credit

rating and overall satisfaction from a bank. But comparatively consistency is found in their

opinions in case of other aspects under study.

The present study vividly indicates that in the e-age, customers have become more concerned

about their time and money and have become more demanding. They highly desire excellent

services with quality and at low service charges. But the response of these customers regarding

the availability of excellent banking services is not satisfactory which has created a wider gap

between the desirability and availability of banking services.

V. Recommendations

The present paper attempts to give following recommendations for banks to bridge the gap

between the desirability and availability of banking services and to win the confidence of new

customers and to retain their old and valuable customers:

1. Banks should adopt simple and short procedure

In a country like India, where majority of customers are illiterate or less educated, it is necessary

that various bank procedures should be simple, short and easy. It will also help banks to win the

confidence of customers.

What type of problems will arise?


IJBMR, 9(1), 2019 Page 20

problem of making simple and short procedure for divergent knowledge of customers in

India.

problem of covering the important information regarding customers.

language problem

Solution

bank management should take the initiative to make the banking procedures, like filling up a

form, instruction booklet, etc. should be simple and short.

only the important and necessary information related to customers should be covered.

bank forms, instruction booklet, etc. should be in regional language.

2. Bank employees should be of co-operative nature

A bank employee is the representative of that bank. Customers create picture about bank after

dealing with its employees because for customers they are not dealing with a person but with the

bank.


lack of training

problem of time

fear to keep the important information confidential

Solutions

banks should impart training to their employees

all the important information like interest rate, credit limit, etc. should be displayed in the

bank. It will help to decrease customer queries and thus, employees can spare more time to

serve customers.

frequent/continuous leave by bank employees should be avoided, since it disrupts the

corporate work.

3. Bank should have good reputation in the market

In this competitive age, customers have many options. Their area of choice is unlimited but

for banks market is limited. Therefore, to gain more customers, it is necessary for all banks,

whether it is public sector, private sector or foreign banks, to have good reputation in the

market. Because customers will go for a bank that has good reputation in terms financial

position, credit facilities, etc.

Solutions

banks should have strong financial position in the market.

banks should provide more credit facilities to their customers with fewer formalities.

4. Banks should provide correct and speedy services

Generally in case of public sector banks the time taken for processing and sanctioning of

loans is on high side (ranging from 15 days to 2 months). But in this global age, no one has

time to wait. Therefore, banks should provide speedy services to their customers. Further,

some kinds of mistakes like omitting entries, wrong debits/credits, over printing in pass book

sheets, wrong foreign exchange calculations, etc. should be avoided by bankers.


IJBMR, 9(1), 2019 Page 21

Solutions

bank management should set minimum time limit for completion of a request.

penalties should be levied on employees in case of mistakes mentioned above.

5. Banks should ensure security to their customers

Now-a-day, banks have facilitated their customers in terms of many products and services.

Therefore, the security of their customers availing these facilities is also the responsibility of

that bank. A customer will prefer to join only that bank which he consider as secure. Not so

long ago, when e-banking still gaining foothold in India, there was a case of fraud in Europe,

where a clerk had siphoned off small change from different accounts and transactions into his

personal account, and this practice had continued over several months before he was caught.

These types of news loose the confidence of customers in banking industry. Therefore, banks

should pay more emphasis on the security of their customers.

Solutions

bank management should give strict instruction to their employees not to disclose

identity of their customers at any cost.

6. Banks should offer more technical advance services

In today’s fast changing environment, it is impossible to isolate banking and technology from

each other. In this e-age, customers also have become more demanding. Therefore, to remain in

competition, it is necessary for all bank groups (especially the public sector) to provide more and

more e-channels.


problem of finance

Solution

investment in technology is like ‘sow little reaps better’. Therefore, banks should invest some

part of their profits in technology.

7. Banks should keep minimum charges for their products and services

Bank customers are of opinion that banks charge high prices for their products and services.

This impression is more for private sector banks. Therefore, all banks, particularly the private

sector banks should work in this direction.

Solution

reduction in DD charges (by 50 pc) and interest rates (ranging from 0.25 to 1 pc) can be used

as an effective strategy to attract new customers and to retain old ones.

apart from this, bank customers also consider the ledger folio charges, godown inspection

charges, L/C opening charges, processing charges, etc., before opening an account with the

bank. Reduction in these charges (ranging from 0.20 to 0.75 pc) can also attract the new

customer towards the bank.

8. Banks should locate near to important place


IJBMR, 9(1), 2019 Page 22

While choosing a bank, customers also consider the location of that bank. They will go for a

bank which is easily accessible. Therefore, it is necessary that banks should locate near to

important place like schools, colleges, hospitals, shopping centers, etc.

9. Overall-Satisfaction

Overall satisfaction of a customer from his bank is very necessary because this is the only

factor that helps any organization to increase its business because a delighted customer will

give you one more customer but an unhappy customer will curtail your 10 customers.

Thus, it is expected that if all bank groups add quality to their work their business can further

be multiplied because in the e-age, customers judge an organization not only by the number

of products offered by it but by the quality of that products and services. Same is for banking

industry because ‘quality counts in services too’.

Implications

The analysis vividly indicates a widening gap between the desirability and availability of

banking services in banking industry. This gap between desirability and availability is an

alarming bell for some banks, particularly, the public sector banks. Because service quality is

very poor in banks and it is below the expectations of customers. It is on the crossroads in the

competitive environment and this is the reason the customers are shifting from public sector

banks to new private sector and foreign banks and the survival of public sector banks is in

danger. Therefore, the bridging of this gap is the need of the hour. The analysis of this study is

very useful for the banking industry as well as for other organizations.

Limitations

Due to the problem of space, separate analysis of responses gender-wise, age-wise,

occupation-wise and bank group wise has not been shown in the paper.

Due to the same reason, chi^ test is not shown in the analysis.

Only three banks working in Ludhiana are taken due to shortage of time.

The analysis is based on the responses of customers.

Future Comprehensive Research Direction

Perceptions of bank employees regarding banking products and services.

Perceptions of bank employees about bank management and their customers.

Comparative study of perceptions of Indian bank customers with the foreign bank customers

regarding banking services.

VI. Conclusion

With the steep rise in level of awareness and expectations of the customers, their desires

regarding efficiency, service quality and reputation of the bank have been altered, which has put

pressure on the bankers (especially the public sector banks) for developing desired skills,

sensitivity and perceptions to understand customer expectations and needs in the changing


IJBMR, 9(1), 2019 Page 23

scenario. Therefore, in order to achieve service excellence and to bridge the widening gap

between the desirability and availability of banking services, banks need to think ‘out-of-the-

box’ where the box is a representation of all the tested and tried things that always worked in the

past. They have to think outside the boundaries of current practices, products, services,

organizations and industries.

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Model and Synthesis of Evidence”, Journal of Marketing, Vol. 52, July, pp. 02-22.


IJBMR, 9(1), 2019 Page 25

Linguistic and Social Impediments to Oral Fluency and the Speaking Skill

of Students at College of Business Administration – Kuwait University

Ahmad Ali Sahiouni

Kuwait International Law School

Abstract This paper tackles the social hindrances that impede the oral communicating process in English for the students of

the college of business administration at Kuwait University. Three sub-skills have been examined in the process of

the speaking skill; namely, pronunciation, intonation, and stress. The researcher also examined the socio influence

on both strength and weakness in the speaking skill for the targeted students. In addition, this research focuses on how grammar is influential in conveying ideas and expressing opinions and attitudes; how it is difficult to initiate

opening declarative and interrogative statements to build up convenient communication process in academic and

social environments. Moreover, the researcher tackled the issue of social interaction in academic arena and

simultaneously retains the sense of identity as well as students’ abilities to explain certain situations and easily

offering appropriate comments on such situations. The researcher explores the possible socio implements that

hinder students from socially respond to social stimuli in English. The researcher suggests some recommendations

to cure the deficiencies found in oral proficiency students of the college of business administration encounter. He

believes that effective communication should be the fruit of the development of communication patters based on

expectations as well responses to other speakers in order to be effectively orally responsive to certain experiences.

Keywords: [Linguistic & Social Impediments, Oral Fluency, Speaking Skill, Business Administration]

Introduction

Second language learners suffer from the speaking skill because it gives them the feeling of

default every time they practice language. However, the importance of English worldwide makes

it an inevitable medium of communication in many countries of the world. From a

communicative perspective, the speaking skill makes up an inevitable part of learning a foreign

language. The speaking skill, moreover, is an effective means to measure a learner’s competence

in any language, Bruce H. (2007). The researcher found that a significant number of the targeted

students wish to easily and smoothly communicate in English. What the researcher noticed is the

obvious weakness of students in the speaking skill though they have much more competency in

other language components, such as reading, writing, and listening. Such weakness, according to

the researcher, is a reflection of students’ general low level in English. This is because the

speaking skill, as well as writing, imposes serious challenges to second language learners as

these skills are productive skills. Actually, a number of linguistic factors affect this issue.

According to Dawn D. (2010), acquiring articulator fluency in multi-word utterances is one of

the obstacles facing even advanced non-native speakers of English. Students showed a

considerable skill in pronouncing separate words in isolation of their context, but when the

students tried to make clauses, phrases, or sentences, they started to hesitate, stumble and

sometimes were distorted. Hence, it has been noticed that enhancing oral fluency is a real

challenge to improve learning a second language. The researcher concludes that since students

are mainly monolingual, and have just little or no exposure to English – as most of them use

Arabic outside classrooms, with just few exceptions – their oral fluency is not up to the required


IJBMR, 9(1), 2019 Page 26

standard. It has been agreed that fluency in language is no more than a habit or practice of

language as a result of rich reservoir of lexical items as well as grammatical structures and rules.

Consequently, some linguists, such as Lightbown P., & Spada N. (2003), think that “when

students use English to speak out their thoughts, attitudes, and reactions, they face the difficulty

of knitting their inner lingual outcome into correct homogeneous series of statements". Such

students can usually produce stumbling speech full of errors and pauses due to many factors:

first, students have no lingual components. Second, instead of thinking and uttering words in

English, students translate from their first language, Arabic, to the target language, English.

Third, students rarely practice speaking English outside classrooms. Fourth, the educational level

of the students and their gender play a role in their speaking abilities, especially in social context.

However, this research paper tackles the socio causes influencing the majority of students to

display their ability to acquire oral fluency in English. Finally, the researcher focuses on the

factors that enhance oral fluency, and they diagnose the socio obstacles that slow down any

development in the speaking skill.

Addressing the Problem

English is currently enjoying a prominent status worldwide. It is the main or second language in

many fundamental domains of life. There are numerous reasons behind this high status of

English. As a result, English has become communicatively a basic requirement for

communication. Speakers of English as a second language believe that mastering English in

communication is a clear reflection on their unique personality, Harmer J. (2001). This research

paper focuses on proficiency impediments as well as the convenient tools that might help

overcome such hindrances.

Questions of the Study

Many questions with regard to oral fluency and speaking tackled in this paper go as follows.

1- What are the social reasons that make the speaking skill lag behind in comparison to other

language skills?

2 - What are the main reasons behind the weakness in the speaking skill?

3 - How can the problem of speaking weakness be solved?

Importance of the Research

The focus of this paper is direct investigation of the social influence of oral fluency on the students

of the college of business administration – Kuwait University. Another fundamental issue in this

paper is attributed to the different linguistic and cultural backgrounds of the students. This paper

receives special significance from the investigation of speech mechanisms resulting while students

learn to speak in somehow less socially stressful environments.

Definition of Oral Fluency

Fluency is a commonly used notion in foreign language teaching, frequently contrasted with

accuracy especially in a communicative language teaching. In ordinary life it often has an


IJBMR, 9(1), 2019 Page 27

extended meaning and is used as a synonym of overall oral proficiency. On the contrary, in the

assessment of foreign language proficiency, it is one of several descriptors of oral performance.

However, there is a clear interconnection between the four language skills, reading, writing,

speaking, and listening. For language learners to become proficient enough in language, they

need to develop all the four skills with special care assigned to speaking, Helen N. (2009). Oral

fluency measures how language learners are able to translate their inner ideas into words and

meaningful well-organized and well-connected sentences. It is important for language learners to

master pronunciation of separate sounds and words to improve fluency. In other words, the

listener has to be able to understand and distinguish between the individual utterances of

language learners, (Aloia.S.et. all, 1996).On one hand, when students want to create either single

words or word combinations in any form – like phrases, clauses, or sentences – they need to use

stress, rhythm, and intonation to make their utterances comprehensible to the listener. On the

other hand, in order to master the fundamental aspects of fluency, language learners need to

know both grammar, which is the structure of language, and vocabulary, which constitutes the

basic building blocks of language, Ur P. (1996).

One way to improve one’s speaking skill is to enhance the listening skill. The speaking process

goes in two directions: first, the speaker should be able to accurately convey his message in

order to be understood; second, the speaker should be able to listen well in order to understand

what other speakers say, Dawn D. (2010). Therefore, good listening skills are essential for oral

fluency. Another way to improve the speaking skill is to make a form of marriage between the

listening and reading skills, Dawn D. (2010). As a result, speaking is the naturally-performed

action used to draw attention, display feelings, express and share ideas and thoughts with others.

Nevertheless, the main interest of second language learners is to speak out these functions. The

basic environment of practicing these functions is academic, as learners are expected to perform

this action smoothly and coherently. In this sense, the researcher comments that the students of

the college of business administration – Kuwait University explicitly show their interest to

speak English fluently. Yet, they bitterly endeavor to orally react in situational English.

Speaking is inevitable for learners of English as a second language in their daily life as well as

basic life needs, such as job interviews, talking to an audience unrehearsed, taking an oral test,

and socializing. According to Helen, N. (2009), English learners acquire self-confidence, pride,

and self-satisfaction when they become competent in English.

The Importance of Oral Fluency

Thanks to globalization, the need to communicate in a different language has become more

important than it has been in history. Accordingly, language learning theories as well as teaching

methods and techniques have been developed. Therefore, language learning requires

comprehensive interest with extra focus on the active language skill of speaking or oral fluency

whether academically or socially. Globalization or internationalization adopted English as its

main medium of oral communication worldwide. As a result, English teaching methods are

directed to enhance oral communication, Grander R.C. & W. E. Lambert (1972). When language


IJBMR, 9(1), 2019 Page 28

learners suffer from deficiency in speaking, there seems to be some pedagogic discrepancy in

the teaching process as a whole. The researcher stresses that to avoid such unwanted outcomes,

it is essential to practice English in the classroom. They argue that in-class oral activities require

more use of English by both students and teachers, especially Arabic-speaking teachers. In this

concern, it is the responsibility of the English teachers to speak English in class to the utmost

possible rate because they are the main source of language input, and at the same time teachers

should restrain the use of Arabic to the minimum in order to give the students the chance to

practice English.

Due to oil boom since the 1970s, people from more than a hundred nationalities have been

attracted to Kuwait for work in different fields of life (statistics of the Planning Authority in

2012). As a result, the need for English fluency – whether academically or socially – especially

speaking, is mounting for both university students and Kuwaiti citizens. The inevitable

mandatory necessity of speaking capabilities as well as oral fluency, moreover, is undoubtedly

very essential not only for students of the college of business administration – Kuwait

University, but also for Kuwaitis at a larger scale. This is because – according to the statistics of

the Planning Authority in 2012 – there are workers from more than 120 different nationalities.

Hence, the main language used for everyday social, academic, and work communication is

English. However, the researcher noticed that the weakness in speaking skill is obvious in

relation to smoothness and correctness. The researcher attributes this deficiency to a couple of

reasons: the linguistic reason is related to the idea that the foreigners working in Kuwait

originally come from non-native English speaking countries, so that their pronunciation is

widely influenced by their first language; while the social reason is attributed to the fact that a

significant number of such workers are uneducated, and many of whom never went to school.

Therefore, the English they have acquired mainly comes from their contact with others including

Kuwaitis, leading to inconvenient fluency and inaccurate pronunciation, and misunderstanding.

A masterpiece of literature might be deformed and become dulled if it is poorly presented due to

the deficiency in oral fluency. In general, communication can be achieved mostly in speaking.

The interpretation of this fact is attributed to the fact that fluency is a productive skill in oral

style. However, speaking competency is more complicated than it seems because it involves

more than just pronouncing or uttering words. According to Bruce H. (2007), oral fluency falls

in three speaking domains; namely, interactive, non-interactive, and partially interactive. The

first type of oral fluency involves face-to-face conversation and talks by which the listening and

speaking skills are alternatively practiced. In addition, the speakers can exchange ideas,

thoughts, and opinions. On the other hand, the non-interactive fluency does not fall in many

cases. This kind of fluency involves audience, as the material is totally recorded on electronic

devices and directed to unseen audience. The third domain of oral fluency is one-way because

the receiver just listens without any involvement in speaking. Hence fluency capability is

obvious, and requires more influence and attractions to draw the attention of the listeners to

impress them. English language users are supported by definite assistance to reflect their


IJBMR, 9(1), 2019 Page 29

attitudes, opinion, descriptions and feeling.

From linguistic perspective, Loonstra A., Tarlow A., & Sellers A. (2001) argue that coherent

fluency derivative expands positively, and promotes the negotiation skills of language users as

well as self-confidence and oral capabilities. As a result, the speaker feels more comfortable

when addressing a larger audience with more confidence. However, dexterity in oral fluency

mounts up by the passage of time if language is practiced at length, leading to accrediting the

speaker particular integrity.

Oral fluency is a powerful tool that helps speakers deliver messages clearly and coherently,

persuade other listeners, direct a situation, react or describe an event. The findings the researcher

comes with have shown that language learners bitterly strive to enhance their speaking

competency to a standard that enables them to master oral communication. When asked, all

students stressed that the ability to speak coherently and confidently will definitely draw the

attention of the listeners. It has been noticed that language speakers feel comfortable from the

language tough meaning. However, the necessity for proficient oral fluency can be viewed as

accurate if lexical items are correctly-delivered in presentation to convey an effective and

meaningful message. In general, some language teachers believe that oral fluency is very

familiar and comprehensible skill because it conveys messages in different ways. The researcher

confirms that contrary to what many people think it is difficult to address crowds fluently and

effectively. In relation to the sample students under study, the researcher noticed that although

students under study show good command of English as a whole, some feel confused, and even

become panic, when it comes to public speaking and social communication, such as delivering

presentations. The students find it boring to translate their thoughts into sentences, and utter

them loudly in front of an audience. The researcher noticed that students frequently stumble;

consequently, he stresses on the students whom he should constantly improve their verbal

capability via continuous practice if they want their oral fluency to be developed. The sample

students believe that excellent oral fluency is the ability to speak well in and out campus. They

claim that mastering speaking is important for both their academic studies and future job

opportunities. Therefore, Gruenewald P. and Lockhead G. (1999) believe that it is, and will

always be, well-worth the effort in completely maintaining and developing their social linguistic

capabilities. The students admit that speaking smoothly offers the well-roundedness they are

looking for. Thereby, they can get rid of difficulties like inhibition, uneven participation, and the

use of Arabic.

Socio Perceptions of Oral Fluency Deficiency When Learning English

Among second languages being learnt in the developing countries English enjoys the highest

prominent status. As a result, people, especially the educated, eagerly try to master English as a

second language, or to master it even like native speakers in order to both academically and

socially use it. English has become the main medium of instruction in many academic

institutions, so that students need to work hard to learn English with specific focus on the

speaking skill in order to freely and openly be able to communicate with others, whether in class

or daily life. From linguistic view point, Harmer J. (2007) argues that language learners are


IJBMR, 9(1), 2019 Page 30

believed to be fluent if they can perfectly utilize its structure meanwhile focusing on content

rather than form. Based on the situation he is involved in, the researcher ought to utilize the

patterns, forms and units at ordinary speaking speed. According to the researcher, the term

“fluency” is closely related to the spontaneous, non-stop, and automatic flow of speech rather

than to speed. He emphasizes on the students to seek acquiring social skills as well as linguistic

abilities to become efficient communicators in English. According to the researcher, the link

between speech and context formulates the corner stone for performing meaningful speech.

Therefore, he suggests four aspects of competence linked with “fluency” represented as follows:

It is unlikely that language experts pay enough attention to analyze the oral fluency proficiency

of English as a second language. Due to the fact that students of the college of business

administration suffer from deficiencies in the speaking skill as well as oral communication, the

researcher tackled the speaking component. The researcher argues that the faculty students

encounter problems related to (1) language form, i.e. syntax, structure, and sound; (2) language

content, i.e. meaning or semantics; and (3) pragmatics, i.e. communication. These three main

deficiencies formulate a great influence on students' oral capacity, PrescottT.et all (2006).

The researcher noticed that the spoken English of the students of the college of business

administration in Kuwait University is in its worst condition. After spending twelve years of

schooling, the students still lag behind in their spoken language proficiency; their level is below

the target level. There are three reasons, the researcher claims, attributed to the speaking

deficiency: first, language is restricted to classrooms as students rarely use English outside

school. The result is lack of practice and abundant exposure, leading to social inability to

communicate. Second, language teachers allocate more time to other language components or

skills rather than speaking. The problem with the speaking skill is that it is not evaluated in the

exams like other components, such as writing, grammar, vocabulary, and reading. Third,

speaking is totally neglected in the credit exams. Consequently, students study English for one

purpose only, which is passing the final exams because assessment is based on written exams

Fluency

Dexterity in using language

imaginatively and creatively

Brightness of using

coherent, logical,

semantically flow of

sentences

Ability to narrate

utterances continuously

with limited breathtaking

pauses

Skill of expressing ideas

or describing situations

contextually


IJBMR, 9(1), 2019 Page 31

rather than oral ones. The result is poor social function of language.

Although the students of the college of business administration experienced a great deal of

language – such as syntactic structures, verb tenses and patterns – in their school years, they , as

cognitively mature learners, still suffer when they want to express their attitudes orally, Storm,

C. (2010). The researcher argues that the students' communicative abilities are unlikely

reproduced from the scheduled presentation offered by the instructional material and the

assigned curricula. This means that the students are socially and linguistically incapable of

implementing the language they have learnt at their faculty in their everyday life. Therefore,

since it has been supposed that the principle language learning objective is producing fluent

speech rather than stumble utterances by frequent pauses and hesitations, constant practice and

language use can develop fluency. Hence, fluency talent is not an absolute dogma students

should acquire skillfully or not, rather, it is a degree-based competence. In other words, students

are responsible for achieving some degree of fluency, Larsen-Freeman D and M. H. Long

(1990).The researcher notices that the students of the college of business administration –

Kuwait University are worried about their fluency capabilities in English as a second language.

As a result of these concerns, the students speak rather quickly without sufficient knowledge

because they just want to make up for it. Accordingly, native speakers find it difficult to

understand them. The researcher claims that the students of the college of business

administration endeavor hard to keep on with the lecturers as well as to speak fluent and correct

English. To give students self-confidence, the researcher keeps advising them to use spoken

English. The reason for this advice, according to Crowe S., & Prescott TJ (2003), is that English

is principally used for communicative purposes, i.e. English language function is transactional,

as key words are emphasized and repeated more slowly so that students become capable of

reusing them in similar situations. However, since language is a communication system it is

unlikely to be an easy task. Knowing that acquiring communication constitutes a major part of

learning a second language, the researcher focused on the fact that students may have different

thoughts in their mind, and they cannot voice them out in English. They try to express

something, but they feel they cannot stick ideas together. They have different words and images,

but they are floating and messing. In other words, students feel themselves helpless when it

comes to orally use English. Once a student initiates a sentence, the flow of ideas disappears,

and a blackout takes place in his/her head. The researcher refers to the idea that many students

have experienced some embarrassing situations, and they find themselves entangled, so they

switch to their mother tongue, Arabic. Three types of impediments obstructing students from

oral fluency, according to the researcher, are presented as follows:

1. Lack / shortage of rich vocabulary

2. Inability to express thoughts and convey messages

3. Difficulty of correct pronunciation

Forms of Oral Fluency Mistakes

The researcher interviewed fifty students of both genders, and from different social and

educational backgrounds. Experiment tools applied were pair dialogue, group dialogue,


IJBMR, 9(1), 2019 Page 32

conversation, presentation, role-play discussions, and speaking sessions. The researcher

monitored the sample students while they performed the different oral activities in an

exchangeable manner.

The researcher noticed that 23% of the sample students inserted unnecessary literary and

culturally translated items from their mother tongue, Arabic. Among the most common errors the

researcher noticed, 26% of the sample, is the mispronunciation of words. Such errors are

attributed to inappropriate accumulative language instruction over the years. Moreover, Kuwaiti

students are negatively affected by the Arabic sounds when they speak English sounds. A plenty

of reversal mistakes, about 21% mainly related to the position of adjectives in the sentence, were

also reported. Again, Arabic leaves a great impact on students' use of grammar, especially with

the position of the adjective after the noun. Another form of errors, constituting 30% of the

sample students, is the omission of words. Furthermore, incomplete expressions are caused by

the shortage of vocabulary reservoir. Students, for shortage of sufficient wealth of vocabulary,

provide incomplete expressions. In addition, it has been noticed that the performance of female

students is higher than that of male students by approximately 22%. Regarding the educational

level of the parents, it has been noticed that students whose parents are master or doctorate

holders enjoy much better speaking capabilities both on the academic and social levels. This

category constitutes about 33%. It is well-known that the more exposure language learners have,

the better their language proficiency will be. This is applicable to the sample students under

study. It has been noticed that about 29% of students who have travel history to the UK or USA

have better speaking skill.

Problems Related to Structural Fluency

The researcher identified three types of difficulties that prevent speech smoothness. One

problem is represented in the over thinking of grammar rules, i.e. the sample students are

obsessed with the accuracy of the grammatical structures more than they do with the accuracy of

their oral structures. Excessive care about grammatical rules impedes the rhythm and tone of the

speakers and distracts them. The sample students usually recall grammar rules before producing

their sentences orally, leading to the slowdown of their pace of speech. Paradoxically, native

speakers are hardly familiar with English grammar although their spoken and communicative

English is grammatically correct; meanwhile many ESL learners are well-acquainted with

English grammar, sometimes more than native speakers, Mejias, H., R. L. Applbaum, S. J.

Applbaum and R.T. Trotter (1991). It is relatively easy for native speakers to understand

grammar rules, but they are not aware of the fact that such rules are off their minds in spite of

their ability to orally, linguistically, and socially communicate, listen, and read.

Moreover, the researcher noticed that many students have considerable amount of lexical items,

but they are incapable of creating sentences of their own out of these words because there is

deficiency in using phrases. For example, if a student has about one thousand separate words,

he/she might not be capable of uttering one correct sentence. On the other hand, according to

Troyer K. et al (1997), if the same student has a hundred phrases, he/she can create a

considerable number of correct sentences; consequently, such student will be considered an


IJBMR, 9(1), 2019 Page 33

orally fluent English speaker. Therefore, the researcher repeatedly guides students to be well-

acquainted with phrases rather than compiling vocabulary if they want to be fluent English

speakers.

The second type of difficulties, however, is represented in the translation from the mother

tongue, Arabic. Such translations constitute serious impediment to fluency. Surprisingly, the

researcher was confident that the sample students used to literary translate what they want to say

from their mother tongue to the target language. Consequently, when the students wanted to

express their attitudes they frequently stuttered and committed large number of mistakes. The

justification of such difficulties in speaking, the researcher believes, is that the order of words in

the Arabic sentence is totally different from that of English. As a result, students desperately fall

in the trap and utter wrong staggering speech. Moreover, Arabic grammar is mixed with that of

English when students attempt to translate from Arabic before they speak in English. However,

the researcher keeps reminding students of the importance of learning how English sentence,

clause, and phrase are created.

Some English language learners believe that reading English and listening to English will

enhance their oral fluency. However, it is believed that promoting the speaking skill is the only

way to achieve fluency. For example, young children acquire their first language by speaking.

They first become fluent in speaking before they learn how to read and write, Harmer J (2007).

Therefore, the instinctive order of acquiring the components of any language are listening,

speaking, reading and writing. However, schools tackle the language skills differently: they

begin with reading, and then writing followed by listening. Speaking is the last language skill

schools focus on when teaching a foreign language. On the other hand, the researcher believes

that the order of learning a foreign language in school should correspond with the natural order

of learning the components of a foreign language, i.e. listening, speaking, reading, and then

writing. Thus, enhancing oral fluency starts with listening, enhanced by speaking, fortified by

reading and consecrated by writing. The reason that many students are better at reading and

listening than they are in speaking and writing is that they continuously perform reading and

listening in classrooms more than they do with the other two skills, McCroskey J. C. and V. P.

Richmond (1987) .

The third problem the researcher identified for the deficiency in speaking for the students of the

college of business administration is that they are not around English at all. In other words, they

are not exposed to English frequently, as the medium of instruction in their faculty is Arabic.

Students practice English in their English classrooms only for one to two hours a day, which is

not enough to master the speaking skill. However, there are some exceptions related to the

students who have more exposure to English in their social life by having travel history to

English-speaking countries. Another exception is attributed to the students whose parents have

their higher degrees from the UK or USA.

Speaking Fluency and Tension

Speaking and oral fluency are obviously two distinct things. All students of the sample showed

some form of speaking capability. Some students are relatively competent in speaking, but they


IJBMR, 9(1), 2019 Page 34

are not fluent enough to express their attitudes smoothly and coherently. Some other students are

in the middle; their fluency standard is acceptable. They can also convey the messages they want

to convey, but not adequately enough. On the other hand, the researcher noticed that the passive

students are those whose fluency is not up to the required level, or not as it is supposed to be.

Those students produce incorrect and incoherent English. Again, gender, parents' educational

level and exposure play a decisive role in categorizing students. Female students, whose parents

have higher educational level and who have longer travel history to English-speaking countries,

have better performance than other students. Most of them are categorized in the first group.

Based on the previous findings, some persistent questions appear when analyzing the speaking

and oral fluency skills, such as:

a. To what extent is the student fluent?

b. How confident is he?

c. Does he promote himself convincingly and effectively?

d. Does he have the ability to speak spontaneously and automatically?

e. To what rate does his mother tongue influence his English speech?

In the course of his research study on a sample of students from the college of business

administration – Kuwait University, the researcher could also identify another deficiency in oral

fluency represented in "fluency tension". To understand this idea, tension should be defined.

According to Mak B. (2011), tension is a degree of anxiety, or worry about imminent predictable

thing, or fear from expressing oneself orally. Based on this definition, the researcher’s comment

can inhibit the ability of speaking as the sample students showed some form of tension or

Types of

Oral

Fluency

Fast

Fluency

Slow

Fluency Passive

Fluency


IJBMR, 9(1), 2019 Page 35

nervousness that distracts them from focusing while speaking. In this research, some students

showed some kind of reluctance when they were asked to set for both an oral exam in the form

of a personal interview and to deliver a presentation for an audience. A significant number of the

sample students experiencing speaking tension remain calm rather than venturing of being

exposed to embarrassing situation when they are asked to perform oral activity. In an academic

environment, students suffering from fluency tension often display low level of self-confidence.

Such weak self-confidence makes the students keep silent even if they can express themselves,

Price L. M. (1991). The researcher, however, thinks that speaking anxiety and oral fluency

tension negatively leave an influence on language learning. He claims that tension is more likely

tied to special situations and circumstances that make the students feel uncomfortable as, for

example, delivering oral presentation in front of an audience like their colleagues. The researcher

distinguishes between three forms of oral fluency within the track of fluencytension

demonstrated in the following figure:

According to the researcher, students who are able to speak English confidently, correctly, and

flowingly are classified as fast fluent speakers of English. Such students are brilliant since early

stages. On the other hand, the researcher classified some students as slow speakers because they

speak hesitatingly, and intermittently. They also showed great deal of stammering and frequent

pauses. However, the slow speakers are capable to convey their ideas and thoughts. The last kind

of students is the passive students whose language is desperately poor. They are also non-

confident; their oral fluency is full of tension. Moreover, the slow students have some fear of

using English in public, or classrooms. It has been also noticed that student who received their

basic and secondary education in Arabic schools, whether public or private, have lower speaking

proficiency than those who have completed their school in English schools.

The sample students are distributed below on the three levels identified by the researcher after

carrying out oral activity, such as conversations, presentations, and dialogues:

Type of fluency Competence rate

Fast fluent students 21%

Slow fluent students 46%

Passive fluent students 33%

The findings show that about one fifth of the sample students is relatively competent or

professional in oral fluency. These students come from distinctive backgrounds, usually well-off

families. They frequently attend English language teaching courses abroad, mainly in the United

Kingdom and United States of America, and they are usually English school leavers. Since they

are exposed to English more frequently than the other two categories, the fast fluent students

have fast and effective rhythm, with tensionless English according to the common standards

valid in the college of business administration – Kuwait University. On the other hand, students


IJBMR, 9(1), 2019 Page 36

who have never been to an English-speaking country, or whose parents are of no higher

education performed poorer level in speaking. Such students are not necessarily all better in all

English skills, but they are better at speaking. Female students have also better performance.

The second category the researcher identified constitutes the majority of the sample students,

almost half of the sample students. These students are competent: their oral fluency is medium

or not very high. They are able to cope with the situational and academic English, so that they

can express themselves in meaningful English. Most students under this category are females

and come from highly educated families, or English schools, or have considerable travel history.

On the other hand, the passive students represent a remarkable portion of the total number of the

students, one third of the total number of the sample students. Not only do the students under

this category suffer from accumulative weakness in oral fluency, but they also struggle in all

English skills. Their main interest in English does not exceed passing their exams in any means.

They do not show any interest to improve their language skills. These students are mostly males

and from families of good but not higher education, and very few of them have travelled to an

English-speaking country.

Reasons of Oral Fluency Tension

In reality, fluency tension is associated with fear, which is derived from past events. Kail R., and

Nippold M (2004), say that unmotivated students create weak communication if they do not

speak English since early stage. Moreover, keeping silent in learning in childhood restricts the

chances of developing oral fluency skills. In addition to schools' speaking skill development,

parents' behavior or reactions regarding outspokenness can leave great effect on children's future

oral fluency capabilities, Horwitz E.K., & D. J. Young (1991). Students of the college of

business administration – Kuwait University, who were not accustomed to speaking during early

stages of learning, were shocked with the requirements of the faculty regarding oral fluency.

Therefore, their inhibition often ends in silence and withdrawnness. These students are usually

Arabic school leavers.

The researcher identifies extra feature of the fluency tension. He believes that tense students are

self-conscious, so that they are sensitive of being subject to laughter by others. This case results

in the fear of speaking fluently, which is most likely related to exposure since the fear of

speaking is often instigated with the surrounding. The researcher keeps reminding the students

how complicated and difficult the speech process is; and how much effort it takes language

learners to master speaking of their own mother tongue, until they automatically produce Arabic

effectively and fluently. Nevertheless, the personality of the students is closely related to their

own peaking proficiency. Learner characteristics that have to do with one's personality are also

strongly connected to oral communication skills rather than acquisition of literacy or academic

skills.


IJBMR, 9(1), 2019 Page 37

Tips for Speaking Skill Development

For English language learners, it is not a must to live in pure native English milieu to be fluent

in English, although it helps learners become more fluent in shorter time. In the highly

sophisticated electronic and media tools, it has become quite easy and available, even for free,

for every learner in almost every corner in the world to have easy access to English language

teaching programs. In addition, the most recent up-to-date electronic and media devices such as

iPad and MP3 have facilitated the access to original English material. Such devices and

programs create simulated English environment greatly helpful to any language learner wishing

to master English fluency. However, to master speaking, students need to repeat what they hear,

and read into systematic speech molds. Baldo V.et all (2006) believes that if students practice

listening and reading; they do not necessarily become fluent in speaking. Therefore, intensive

practice of speaking out loudly will certainly produce effortless smooth fluency.

The researcher claims that English language teachers should adhere to the use of English inside

the classroom in order for the students to be trained to use it outside the classroom as well. They

believe that to obtain reality and make speaking the second language a natural process it is

essential to assimilate language in every possible communicative circumstances. Moreover, the

researcher emphasizes on the fact that learning a foreign language necessitates improvements in

the means of communication. By using English in the classroom to the utmost, students have the

chance to utilize language in different contexts. Accordingly, the researcher keeps advising weak

students to improve their speaking skill competency. He recommends the students to:

1. practice saying English sounds individually and loudly.

2. be acquainted with the correct function of the words; gender, adjective, noun, etc.

3. increase their word bank.

4. be familiarized with many useful phrases and complete sentences that are used in every

day communication.

5. practice using words in the correct order.

6. speak out confidently without tension or hesitation.

7. train for fluency capability by addressing friends or family members in English

8. use modern electronic devices, such as Pad and MP3, or watch English programs to

increase their exposure to language.

The researcher, furthermore, thinks that students not only need mechanical procedures, as

mentioned above, but they also require learning English language, such as syntax, and grammar.

Consequently, it is fundamental for language learners to acquaint themselves with language

components, such as reading and writing. For example, when students read printed material in

English, they learn the regular conversational terms along with dictionary consultations, which


IJBMR, 9(1), 2019 Page 38

will help them find out the meaning of the unfamiliar words in their first language. The

following step comes when the student becomes capable of catching English language in

general. The learners will start speaking even if they are not fluent enough yet. Fluency will

definitely come with frequent and consistent practice. In this concern, it is worth mentioning that

passive students are in need of building up oral communication with their fellow students in

English. They can also watch English programs and movies on either television or the Internet.

Such programs and movies offer the potential of enhancing the oral fluency of the students. On

the other hand, fluent students of the sample under study declared that they spent long time and

much effort to be familiar with the listening and communicating in English. There is response

time in the students' mind before they have to reply. Because students listened to English, their

minds are prepared to respond in English. The advanced step of enhancing the speaking skill is

built on making use of sophisticated electronic devices and media software, such as iPad and

PM3, which can offer audio tutorials for pronunciation, intonation, and conversational material.

In his other part of the argument, the researcher emphasizes the importance of the responsibility

of the instructors to elevate the speaking skill of the students. The researcher believes that it is

the responsibility of the English language teachers to be cautious or sensible as they introduce

the students to fluency and speaking topics. They should also take into account the individual

variances among students. Such variances spring from the lingual and social background of

students. As a result, the researcher recommends the following procedures to English language

instructors at the college of business administration – Kuwait University to adopt when tackling

the speaking skill and oral fluency:

a. Frequently initiate English environment in classrooms.

b.Adequately display the subject matter in an exciting situational manner

c.Persistently persuade passive students to take part in classroom discussions

d.Properly expand the techniques of the speaking skill

e.Repeatedly enhance students to launch open discussions on general topics

f. Appropriately implement the techniques of group work, pair work and role-play

g.Constantly steer and monitor students’ works

h.Skillfully encourage low-achieving students to carry out power point presentations

Conclusion

To assess the quality of language teaching, one should realize the portion and quality of Arab

students learning English. English language learners believe that unless they master speaking,

they will not be considered true learners. In summary, the researcher comes to some conclusions

pertaining oral fluency. The findings the researcher found concerning the major causes of the

deficiency in the speaking skill among the faculty of social students sciences – Kuwait


IJBMR, 9(1), 2019 Page 39

University are accumulative weakness of teaching, implementation of wrong pedagogic

procedures, lack of practice, and much use of mother tongue in classrooms. Social background,

gender and parents' educational levels also play a role in classifying students in the speaking

skill. The researcher classified the difficulties the sample students suffer from when they speak.

In order to become proficient at oral fluency, the researcher recommended some remedial

procedures that may help English language learners in the college of business administration –

Kuwait University to enhance the speaking skill. Among these procedures are microinstructions

related to pronunciation and intonation as well as theatrical tips that teach the learner the

techniques of speech fluidity. In accordance with the findings the researcher collected out of the

experiments they performed on the participants of the sample, it has been confirmed that oral

fluency is a habit which can be acquired by continuous practice, persistent exercise, and

application of the speaking skill rules in real situations and attitudes.

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An Empirical Study on Calendar Anomalies in the Indian Stock Market

*Thilak Venkatesan & **Darshan Kumara. M *Assistant Professor, P.G. Commerce Department, Presidency College, Bangalore

**Student, M.Com, Presidency College, Bangalore

Abstract

The dynamic behavior of asset prices, particularly the stocks, deviate a large from their intrinsic values. This

rationale leads to the argument of market efficiency. The evidence from existing literature proves that market anomalies exists, which can aid in developing trading strategies. The various forms of anomalies were categorized

from the previous studies, and the present study was focused to investigate anomalies that exist in the Indian stock

market. The most popular indices, Nifty50 was used for the analysis. The trading volumes in the Nifty50 were also

considered to reflect the differences in the volume. This paper investigated the existence of the calendar anomalies

effects such as day on week, week on month, and month on year effects. The values were obtained from the Nifty50

index from April 2011 to March 2017 for calculation of effects on price and volume using dummy variables.

Kruskall- Wallis H statistical test was used to test the anomalies, and the findings would provide insights for making

informed decisions for investment.

Key Words: [Stock market efficiency, Calendar Anomalies, Dummy variables]

_Introduction

Market regulators observe information asymmetry as a cause to the insider trading activity, but a

common behavior of the equity markets such as a calendar anomaly can provide strategies for

devising trades. Anomalies refer to a situation in which a security or group of securities performs

to the assumptions on any fundamental fact that effects on the market activities. Most discussed

phenomenon is the seasonality effects, often called as Calendar effects which refers to regular

and repetitive fluctuation in time series occurring periodically have been documented over

several years, on the stock market returns. During the development of Indian stock market,

researches have tried to find out whether the Indian stock market is efficient or not. If the market

is not efficient there exists of some market anomalies, where the investors can gain some

abnormal returns by using well planned strategies in the market.

Equities tend to produce abnormal returns over a period of time and even in efficient markets

there exists various market anomalies due to new information, economic reports, company

announcements, political statements or any other factors those effects the market.. This security

prices should reflect fully at all the information that is available in the market Fama (1970) and

prior literature evidences the foundation of our study to identify the existence of such anomalies

in Indian stock market. Investments are decided based of a large number of factors. The

predictability of returns is a herculean task among the investors. The study aims at analyzing

calendar anomalies such as day of the week effect and month of the year effect. The variations so

captured will benefit the investing community by way of informed decisions and implement

better trading strategy. The paper is sequenced by the review of literature in the second section,

research gap for the current study, followed by research design in section three briefing the


IJBMR, 9(1), 2019 Page 43

objectives of the study. The section four covers the data analysis and inferences of the analysis

and, finally, the fifth section with discussion and conclusion.

II. Review of Literature

Movements of stocks are irregular over a period of time, say on certain days, week or certain

month. The variations have been studied across various developed and developing markets and a

lot of these variations have become notable such as the Monday effect, January effect etc. The

studies have been of interest to market participants which act as a guide for investments and as

well for policy makers to device measures to ensure smooth functioning of markets. Calendar

anomalies such as day of week, week of month and month of year effect remained a interesting

topic for research since long time.

The January effect or tax-loss effect was the most popular anomaly mainly observed in the

western countries Patel Jayen (2002). It is not an international phenomenon and it reflected a

higher average return for the month of January compared to other months and prior studies noted

the phenomenon along with the study of market efficiency. Guo siqi (2007),Ciccone. B (2007),

ullah Irfan (2016) had highlighted the phenomenon of the January effect across various stock

market returns. Seasonal effect of higher returns in 1st half of the month was noted by

Nageswari.P (2011) and Posadas (2006) and semi month effects were also observed by the prior

studies Narayan Ash,sah (2009), M. Wong (2007) and Sudarvel.J (2016) and normal volume

due to seasonal variations was noted with the effects on weekend return. Sharma D.S (2011)

noticed the insignificant day of the week effect with inconsistency in stock prices as he observed

a negative Monday and positive Friday returns. The analysis provided insights for investors and

fund managers. Raiyani. R (2011), Verma P (2016) and Schwert G.W (2003), the different levels

of financial anomalies differ from the random walk theory and pave way to devise risk return

strategy and aid in predications of stock price. Archana.S (2014), T. Mallikarjunappa (2008) and

Dash mihir (2011), observed significant anomalies and tested the various forms of market

efficiency. The efficiency of the stock index needs to be known to device profitable trading

strategies as it would impact investment planning Khanna vandana (2016) Deev (2012).

Macroeconomic factors and firm specific factors were also used to check the market efficiency

and were noted by Maria. G (2016) and Yeung W.H (2015) studied the access to overall

information related to the foreign markets as a measure to reduce unsystematic risk, Sehgal.S

(2014) Malkiel B.G (2003) and Bhattacharya.S (2012) stressed that the information access

improve the more earnings to investors. Changes in policies, inside trading and the different tax

structures deviate the random walk and the deviations have paved the way to the need of the

study. Amarnani. N (2014), M. Naseer (2015),Latif. M (2011), had observed significant change

in returns due to these policy changes. T. Bohl, M(2010) stressed that the underlying assumption

of efficient market hypothesis is that the security prices reflect fully all the information that is

available in the market, and any shock is treated as an external error term. Is the phenomenon

common to in Indian stocks with respect to returns and also with volumes of trade? The current

study was an attempt to capture the anomalies in price along with the volume of trades in Indian

stock index Nifty 50.


IJBMR, 9(1), 2019 Page 44

III. Research Design

Nature of the Study

The study is analytical, quantitative, and historical. Analytical as it confines to analysis of an

existing information, quantitative as it attempts to model the returns under study and historical as

it uses past data for analysis and interpretation. The research is built upon the secondary data for

a period of six years from financial year 2011 to 2017.

Objectives of the Study

1. To calculate the returns of the Indian stock index, on Nifty

2. To apply time dummies appropriate to the cyclicality.

3. To analyze the calendar anomalies namely day of the week effect and week of month

effect and month of the year effect.

Research Hypothesis

H01: The distribution of returns and volume is same across all days of the Week.

H02: The distribution of returns and volume is same across all Weeks of the Month.

H03: The distribution of returns and volume is same across all Months of the Year.


Collection of data

National Stock exchange accounts more percentage of the total trading volume across the market

segments; therefore, we used the Nifty Index to study the volatility behavior of the market. This

study uses the daily closing prices of the Nifty Index, from the period 1St April 2011, through

31st March 2017. For the trading commenced from this day Nifty Index price data were collected

from the NSE website www.nseindian.com. The closing price data were converted to daily

compounded returns by taking the first log difference Returns of present day (R1) subtracted by

the previous day closing returns (R0) and the time factor (T) is divided by closing price and total

multiplied by (100).

Where; (R1-R0)/R0*100

R1= present day closing price

R0= previous day closing price

Tools used for analysis

Descriptive Statistics: Mean, Standard Deviation, Skewness & Kurtosis: This test is used to

calculate the mean of the total values. And the standard deviation and with the values Skewness

is to identify data which are not normally distrusted which are lying extremely left or right, and

the data of Kurtosis is used to find the higher or lower hump in the data


IJBMR, 9(1), 2019 Page 45

Kruskall- Wallis test: The Kruskall-Wallis H test is "one-way ANOVA on ranks", it is a rank-

based non-parametric test that can be used to determine the differences between two or more

groups of an independent variable on a ordinal or continuous dependent variable.

Dummy variables: Dummy variables are used to code the variables of nominal or ordinal scales

for building models in multiple regressions. The returns are calculated values and the dummy

variables are coded according to the effect that is to be measured.

IV. Data Analysis and Interpretation

The data was obtained from the National Stock Exchange and the Bombay stock exchange

respectively, the calculation of returns and changes in volume was done in order to facilitate the

study the three anomalies namely, Day of the week, Week of the Month and the Month of the

year. Appropriate dummy variables were introduced to index the days, weeks and months.

Table 4.1: Descriptive statistics-Day of the week on Returns and Volume

Nifty50

Index Analysis of Returns-Day of Week Analysis of Volume-Day of Week

Day N Mean Std.

Deviation Kurtosis Skewness Mean

Std.

Deviation Kurtosis Skewness

MON 275 -0.01 1.06 3.45 -0.56 7.05 149.29 60.49 7.62

TUE 275 0.01 1.07 1.46 -0.15 15.71 74.89 108.47 9.66

WED 275 0.06 0.87 1.08 0.39 5.4 26.36 6.67 1.1

THU 275 0.03 1.04 1.2 -0.19 13.77 51.96 122.03 9.25

FRI 275 0.06 1.08 0.74 0.11 6.85 65.12 89.05 8.5

Total 1375 0.03 1.03 1.72 -0.13 9.75 84.28 142.46 10.92

H

value 0.136 163.038

Nifty Returns for Day of Week analysis signifies that the mean return on Monday (-0.0114) is

lower that all other days with a standard deviation of 1.06266. However highest standard

deviation of 0.87229 is observed in Wednesday with the mean return of 0.0632. The negative

skewness for Monday, Tuesday, and Thursday indicates the returns are negatively skewed,

whereas Wednesday and Friday slightly positively skewed.

The analysis of Volume for Day of Week suggests that the mean volume of Monday 7.0508

with the highest standard deviation of 149.288 than compared to all other days. However the

highest mean volume of Tuesday 15.7063 and standard deviation of 74.8912 and having the

positively skewed value of 9.661. But the least mean volume of Wednesday 5.3963 and least

standard deviation of 26.3618 and having the least positively skewed value of 1.103.


IJBMR, 9(1), 2019 Page 46

Table 4.2: Hypothesis Test -Day of the week on Returns and Volume

Hypothesis Test: Independent Sample Kruskal-Wallis Test

Null Hypothesis Significance Decision

The distribution of return is the same 0.998

Accept Null

across categories of day Hypothesis

The distribution of volume is the same 0.000

Reject Null

across categories of day Hypothesis

Kruskall- Wallis H statistics is employed to test whether the differences in mean return across

the weekdays are statistically significant or not, and the returns was same across categories of

days. The calculated value of H for Nifty index for period is 0.136 which is lesser than the table

value of 9.488 at 5% level of significance. Hence we cannot reject the null hypothesis and

conclude that there is no significant different in the mean returns of weekdays. Similarly

hypothesis for the mean differences in volume was calculated, the H for Nifty index for period is

163.038 which is higher than the table value of 9.488 at 5% level of significance. Hence we

Reject the null hypothesis and concluded that there is significant different in the mean volume of

weekdays.

Graph 4.1: Box plot showing the distribution of data for Returns and Volume of Nifty 50

Days of the week effect

The median returns are equally distrusted in all the days, were as the upper quartile and the lower

quartile of each day was varied as observed from upper extreme and the lower extreme

(whiskers) but are laying similarly in same range over the values, but the outliers which are seen

above the whiskers line shows that the data for the period is non even and high volumes of trade


IJBMR, 9(1), 2019 Page 47

was observed in the beginning of the week, least outliers observed on Wednesday and positive

returns were observed on Fridays.

Table 4.3: Descriptive statistics-Week of the Month on Returns and Volume

Nifty50

Index Analysis of Returns-Week of Month Analysis of Volume-Week of Month

weeks N Mea

n

Std.

Deviation

Kurtosi

s

Skewnes

s

Mea

n

Std.

Deviatio

n

Kurtosi

s

Skewnes

s

week 1 60 -0.08 1.90 -0.50 0.22 40.30 84.78 31.86 4.99

week 2 60 0.39 2.09 0.41 -0.68 16.10 26.34 0.01 0.71

week 3 60 0.33 2.06 1.35 0.92 17.61 49.37 11.31 2.49

week 4 60 0.43 2.19 -0.10 0.21 21.47 45.77 7.17 1.72

Total

24

0 0.26 2.06 0.23 0.18 23.87 56.20 46.46 5.16

H-

value 3.772 6.536

Week of the month mean returns of 1st week (-0.0841) was lower than all other week with the

standard deviation of 1.8970. However, the highest standard deviation of 2.1898 is observed in

4th week with the mean return of 0.4270.The negatively skewed of 2nd week indicates that the

returns are negative and positive on 3rd week. The mean volume of Monday 40.2970 which is

higher than all other days with standard deviation of 84.7838 and skewness value of 4.986.But

the lowest mean volume of 16.1024 and standard deviation of 26.3388 was found on Tuesday

with the lowest skewness value of 0.707, but no negative value founded in the volume of weeks.

During all weeks mean volume is 23.875 with standard deviation of 56.2043 and positively

skewed at 5.161 for the period from 1st April 2011 to 31st march 2017.

Table 4.4: Hypothesis Test -Week of the Month on Returns and Volume

Hypothesis Test: Independent Sample Kruskall-Wallis Test



Accept Null

across categories of weeks Hypothesis

The distribution of volume is the

same 0.088

Accept

Null


However the calculated H-value for the nifty index period of 01 April 2011 to 31 March 2017 is

3.772 which is lower than the table value of 7.814 at 5% level of significant . Hence, we cannot


IJBMR, 9(1), 2019 Page 48

the null hypothesis, that there is no significant difference and returns the same across all

categories of weeks.The differences in the mean volume across the weeks is 6.536 which is as

well lower than the table value 7.8147 at 5% level of significance. Hence we conclude that mean

volume of the weeks and remains same.


Week of the Month effect

The median returns of all the weeks are been varying as depicted by the upper and lower

quartiles of each week. The upper extreme and the lower extreme (whiskers) are gradually

expanding to the end of the month and the outliers in the middle of the month shows the more

fluctuation of returns and the high volume of trade in the month beginning and remains normal

in second week.

Table 4.4: Descriptive statistics-Month of the year on Returns and Volume

Nifty50 Index Analysis of Returns-Month of Year Analysis of Volume- Month of Year

Months N Mean

Std.

Deviation Kurtosis Skewness Mean

Std.

Deviation Kurtosis Skewness

APR 6 -0.05 2.65 1.01 0.02 34.95 28.51 0.87 0.74

MAY 6 1.15 5.07 -0.79 -0.12 106.73 95.42 -0.77 0.61

JUN 6 2.05 3.84 2.21 1.42 43.48 29.36 -1.29 -0.61

JUL 6 -0.06 2.48 -0.75 0.45 35.29 25.09 -1.75 0.3

AUG 6 -2.3 5.38 -1.69 -0.05 56.87 42.66 0.84 0.77

SEP 6 1.57 4.04 0.87 1.14 11.3 32.09 3.73 1.89

OCT 6 3.66 5.02 -2.15 0.23 12.88 60.44 1.27 -0.72

NOV 6 -1.49 4.64 -0.97 -0.12 74.96 62.11 -0.19 -0.82

DEC 6 -1.29 2.92 0.77 -1.28 -33.02 18.26 1.8 1.39

JAN 6 2.69 6.39 -0.78 0.25 233.91 120.91 -0.14 1.16

FEB 6 -0.16 5.02 -1.42 -0.78 47.84 49.74 -2.51 0.18

MAR 6 1.45 4.63 -0.68 -0.08 6.01 23.55 -0.35 -0.43

Total 72 0.6 4.48 -0.04 0.19 52.6 83.73 6.46 2.07

H-value 7.912 37.11


IJBMR, 9(1), 2019 Page 49

The mean returns of October 3.6642 is higher than all other months with a standard deviation of

5.022. However the highest standard deviation is observed in January with a mean return of

2.6933. On the other hand, a lower mean return was observed in August that is (-2.3016). The

negatively skewness for May, August, November, December, February and March indicates the

returns are negative, where as June month was observed with positive skewed. Whereas the total

mean return is 0.6018 with a standard deviation of 4.4750 were both are positive whereas the

skewed value is also positive that of 0.189 for the period

The highest mean volume was 233.9142, in January month with a standard deviation of

120.9124, followed by 106.73 and standard deviation of 95.4219 in the month of May. The

highest skewed value is found in September month (1.8) and kurtosis value of 3.730. On the

other hand the lower mean return was found in March 6.0112 with a standard deviation of

23.553 and with the negatively skewed that is -0.431 where as the least standard deviation was

found in December 18.2638 with a positively skewed value of 1.386. But compared to returns

skewed value the volume are less skewed her June, October, November and March remaining are

positive. The all months mean volume is 52.599 with a standard deviation of 83.7251 with a

skewed value of 2.066 during the period 2011 to 2017.

Table 4.5: Hypothesis Test -Week of the Month on Returns and Volume

Hypothesis Test: Independent Sample Kruskall-Wallis Test



Accept Null

across categories of Months Hypothesis

The distribution of volume is the same 0.000

Reject Null


Kruskall-Wallis H statistics was employed to test whether the differences in the mean return

across the month are statistically significant or not. The calculated value of H for Nifty index for

the period is 7.912 which is lower than the table value 19.675 at 5% level of significance. Hence

the Retain the null hypothesis and concluded that there is no significant difference in the mean

returns of the month and remains same. The calculated value of H for Nifty index volume for the

period was 37.11 which is higher than the table value 19.675 at 5% level of significance. Hence

the Reject the null hypothesis and concluded that there is a significant difference in the mean

volume of the month and remains different.


IJBMR, 9(1), 2019 Page 50


Month of the year effect

The median returns of all the month are scattered along with the large and medium quartile range

of the Nifty index and volume of trade was the highest trade in January month and very low in

December month during the study period.

V. Discussion and Conclusion

The mean returns of the Nifty 50 index was observed negative on Monday with highest deviation

on volumes. The hypothesis examining the difference among returns was noted similar on all

days but the volumes differed. The week of the month also was noted with negative mean return

in the first week with large variation in volumes. The returns and the volume difference were

insignificant during the study period. The month of the year effect proved the January effect to

be significant in case of volumes and the returns were also higher in case of box plot whisker.

The findings of similar studies Jayen Patel(2016) noted no January effect in the international

markets and by the findings we can conclude that the Indian markets are a weak form efficiency

compares to its other developed counterparts. The analysis contrasted a few studies in case of the

beginning of the week and 1st half period Sundervel (2016). Though the Hypothesis had not

reflected the differences, a longer horizon analysis along with Sensex data can bring a better

understanding of the phenomenon.

References

Amarnani, N. (2014). Study of Calendar Anomalies in Indian Stock Markets.

Perspectives on Financial Markets and Systems-Market Efficiency, Behavioural Finance

and Financial Inclusion, (Silver 2011), 247–262. Retrieved from http://papers.ssrn.com

/sol3/papers. cfm?abstract_id=2398195

Archana, S. (2014). A Study on Market Anomalies in Indian Stock Market. International

Journal of Business and Administration Research Review, I(2347), 128–137.

Bhattacharya, S. (2012). Day of the Week Effect: Empirical Analysis of National Stock

Exchange. BVIMR Management Edge, 5(2), 98–102. Retrieved from

http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip,shib&db=bth&AN=89


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746081&scope=site

Ciccone.B. (2007). A Month-by-Month Examination of Long-Term Stock Returns A

Month-by-Month Examination of Long-Term Stock Returns. Northest Business and

Economics Assoication, (603), 3–23.

Dash, M. (2011). Seasonality and Market Crashes in Indian Stock Markets. Asian Journal

of Finance and Accounting, 3(1), 174–184. https://doi.org/10.5296/ajfa.v3i1.997

Deev, O. (2012). Intraday and intraweek trade anomalies on the Czech stock market. Acta

Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 60(4), 79–88.

Guo, S. (2007). Market efficiency anomalies A study of seasonality effect on the Chinese

stock exchange. Umea School of Business, Umea University, 1–60.

Khanna, V. (2016). An Examination of Stock Market Anomalies : A Study in the Context

of Make in India Movement. IOSR Journal of Business and Management (IOSR-JBM),

31–36.

Latif, M. (2011). Market efficiency, market anomalies, causes, evidences, and some

behavioral aspects of market anomalies. Research Journal of Finance and Accounting,

2(9), 1–14.

M.Naseer. (2015). The Efficient Market Hypothesis: A Critical Review of the Literature.

IUP Journal of Financial Risk Management, 12(4), 48–63.

M.Wong. (2007). An Empirical Analysis of the Monthly Effect : The Case of the

Malaysian Stock Market. Working Paper Series in Economics, 4, 3–18.

Malkiel, B. G. (2003). The Efficient Market Hypothesis and Its Critics. Journal of

Economic Perspectives, 17(1), 59–82. https://doi.org/10.1257/089533003321164958

Maria, G. (2016). Intraday Anomalies and Market Efficiency: A Trading Robot Analysis.

Computational Economics, 47(2), 275–295. https://doi.org/10.1007/s10614-015-9484-9

Nageswari, P. (2011). An empirical analysis of January anomaly in the Indian Stock

Market. International Journal of Management & Business Studies, 1(4), 90–95.

Narayan, A. (2009). Stock Market Seasonality : A Study of the Indian Stock Market. NSE

India–Research Papers., 001(March), 1–24.

Patel, J. B. (2002). Market Rationality: Efficient Market Hypothesis versus Market

Anomalies. Research Journal of Finance and Accounting, 3(2), 1–14.

https://doi.org/10.1111/jbfa.12035

Posadas Hernandez. (2006). Stock Market Anomalies. The Latin American Evidence,

Online-Ressource 4-32. Retrieved from http://dx.doi.org/10.1007/978-3-8350-9103-0

R.raiyani, J. (2011). Research papers monthly effect in Indian stock market: evidences

and implication. I-Managers Journal on Management, 5(4), 2011.

Schwert, G. W. (2003). Anomalies and market efficiency. Handbook of the Ecomics,

939–968.

Sehgal, S. (2014). Tests of Equity Market Anomalies for Select Emerging Markets. The

International Journal of Business and Finance Research, 8(3), 27–46.


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Sharma, D. S. (2011). Day of Week Effect : Evidences From Indian Stock. Indian

Journal of Commerce and Management Studies, (6), 25–30.

Sudarvel, J. (2016). Semi Month and Turn of the Month Effect in Indian Stock Market

with Reference to NSE Nifty Index. International Journal of Advane Research in

Computer and Management, 4(8), 235–239.

T.Bohl, M. (2010). The other January effect: International evidence. The European

Journal of Finance, 16(2), 173–182. https://doi.org/10.1080/13518470903037953

T.Mallikarjunappa. (2008). The Impact of Derivatives on Stock Market Volatility: A

Study of the Nifty Index. Asian Academy of Management Journal of …, 4(2), 43–65.

Retrieved from http://web.usm.my/journal/aamjaf/vol 4-2-2008/4-2-3.pdf

Ullah, I. (2016). Market Efficiency Anomalies : A Study of January Effect In Karachi

Stock Market. Journal of Managerial Science, 10(June), 32–44.

Verma, P. (2016). An Empirical Analysis of Day of the Week Effect in BSE BANKEX.

International Journal of Management & Business Studies, 6(3), 35–39.

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Journal of Economics and Finance, 7(9), 267–277. https://doi.org/10.5539/ijef.v7n9p267


IJBMR, 9(1), 2019 Page 53

An Empirical Study to Compare Non-Performing Assets in Private Sector

Banks in India

Munish Gupta

Department of Commerce St. Soldier College (Co-ed), Jalandhar

Abstract

The private sector banks in India characterize part of the Indian financial system that is comprised of both public

and private sector banks. The private sector banks are the banks in which the larger parts of stake or value are held

by private investors and not by the government. The banking in India has been conquered by public sector banks

since the 1969 when every giant bank was nationalized by the government. Be that as it may, since liberalization in

banking policies in 1990, new and old private sector banks have come into existence again. They have developed rapidly since liberalization over the two decades utilizing the innovation, making availed monetary tools and

procedures and contemporary developments. The development of the economy relies on the proficiency and stability

of the banking sector. The most critical factor which measures the wellbeing of the banking industry is the

magnitude of NPAs. Non-Performing assets have put impact on the financial position of banks. This paper has made

empirical study comparing level of NPAs between private sector banks under study.

Keywords: [Non Performing Assets, Private Sector Banks, India]

Objective of the Study

To make a comparative study of Non-performing assets in Private sector banks in India.

Sources of Data

The data collected is mainly secondary in nature. The sources of data for this paper include the

literature published by Indian Bank and the Reserve Bank of India, various magazines, Journals,

Books dealing with the current banking scenario and research papers.


Research design used to conduct this study is observational research since it manages statistical

information and the fundamental point of the analysis is to compare Non-Performing Assets

level in Private Sector Banks. With the end goal of this study, data identified with average of

Gross NPA Ratio and Net NPA ratio has been taken for 6 private sector banks. The studyis done

based on data for the time of 8 years from the private sector banks from year 2010-11 to 2017-

18. Information is given the assistance of bar charts, tables and so on.

List of Banks Taken for Study

Sr.No. Name of the Bank Type of Bank Abbreviations

1. ICICI BANK Private Sector Bank ICICI

2. HDFC BANK Private Sector Bank HDFC

3. AXIS BANK Private Sector Bank AXIS

4. JAMMU & KASHMIR BANK Private Sector Bank J&K

5. KARNATAKA BANK Private Sector Bank KB


IJBMR, 9(1), 2019 Page 54

6. DHANLAKSHMI BANK Private Sector Bank DB

Tools of Analysis

In order to achieve the above-mentioned objective, the data collected are entered, arranged and

presented using Microsoft Excel and SPSS 23. All information collected for the purpose of the

study has been arranged in cross sectional tables, depending upon the requirements of the

analysis. The tabulation encompasses absolute figures supported by simple percentage and

subjected to statistical analysis using Average, Standard Deviation, F-test using One-way

ANOVA technique.

Hypothesis of the Study

H0: There is no significant difference between level of Non-Performing assets in between

ICICI Bank, HDFC Bank, AXIS Bank, Jammu & Kashmir Bank, Karnataka Bank, Dhanlakshmi

Bank.

Analysis and Interpretation

Table 1: Average NPA level of Private Sector Banks

Year

Average NPA Ratio

ICICI HDFC AXIS J & K KB DB

2010-11 3.46 0.63 0.79 1.08 2.80 0.47

2011-12 2.78 0.57 0.73 0.85 2.69 0.79

2012-13 2.00 0.53 0.78 0.87 2.01 3.35

2013-14 2.00 0.59 0.87 0.64 2.42 4.03

2014-15 2.70 0.57 0.91 4.37 2.47 4.37

2015-16 4.40 0.60 1.23 6.32 2.90 3.96

2016-17 7.00 0.67 3.50 8.00 3.50 5.00

2017-18 7.50 0.85 5.50 7.50 4.00 5.00

Mean 3.98 0.62 1.79 3.70 2.85 3.37

St. Dev 2.17 0.10 1.77 3.22 0.63 1.78

CAGR 11.71% 4.49% 32.06% 31.98% 5.25% 40.18%

Source: RBI: Report On Trend and Progress of Banking in India


IJBMR, 9(1), 2019 Page 55

Figure 1:

It can be seen in the Table- 1 that HDFC Bank is numerically associated with smallest mean

level of Average NPA Ratio i.e. Mean = 0.62% and ICICI Bank is associated with highest mean

level of Average NPA Ratio i.e. Mean = 3.98%. Further, Compound Annual Growth Rate

(CAGR) of Average NPA Ratio is highest in Dhanlakshmi Bank i.e. CAGR=40.18% and lowest

in HDFC Bank i.e. CAGR=4.49%. It is clear from the Bar Graph that there is a continuous

increase in Average Non-Performing Assets Ratio for ICICI Bank, Axis Bank, Jammu &

Kashmir Bank, Karnataka Bank and Dhanlakshmi Bank. However, HDFC Bank has shown

better control over mounting NPAs on year by year basis from 2010-11 to 2017-18.

Table 2: Test of significance (One Way ANOVA)

GNPA ratio

Sum of

Squares Df Mean Square

F Value

(P. Value=2.43) Sig.

Between

Groups 65.977 5 13.195 3.639 .008

Within

Groups 152.290 42 3.626

Total 218.267 47

*The mean difference is significant at the 0.05 level

In order to test the Hypotheses i.e. to compare the level of Average Non-Performing Asset Ratio

in private sector banks under study, one-way ANOVA has been performed. There is statistically

a significant difference between the groups as determined by one-way ANOVA Table 2 i.e.

FSTAT(5,42)=3.639> FCRITIC(5,42)=2.43 , α=0.05>0.008. Thus, null hypothesis of no significant


IJBMR, 9(1), 2019 Page 56

difference between level of Average NPA Ratio of Private Sector Banks under study is rejected.

To evaluate the nature of difference between three means further, the statistically significant

ANOVA was followed up with Tuckey Post hoc test in Table – 3. This table highlights that

difference between level of average NPA level of ICICI Bank and HDFC Bank is significantly

different i.e .α=0.05 > p = 0.013. Similarly, there is significant difference between HDFC Bank

and Jammu & Kashmir Bank i.e. α =0.05 > p =0.027. These differences depict that HDFC Bank,

Axis Bank, Karnataka Bank and Dhanlakshmi bank has shown better control over NPAs rather

than ICICI Bank and Jammu & Kashmir Bank.

Table 3: Tukey HSD POST HOC test

(I) Private SectorBanks

Mean Difference (I-

J) Std. Error Sig.

ICICI HDFC 3.3538* .9521 .013*

AXIS 2.1913 .9521 .216

J&K .2763 .9521 1.00

KB 1.1313 .9521 .840

DB .6088 .9521 .987

HDFC ICICI -3.3538* .9521 .013*

AXIS -1.1625 .9521 .824

J&K -3.0775* .9521 .027*

KB -2.2225 .9521 .203

DB -2.7450 .9521 .064

AXIS ICICI -2.1913 .9521 .216

HDFC 1.1625 .9521 .824

J&K -1.9150 .9521 .353

KB -1.0600 .9521 .873

DB -1.5825 .9521 .564

J&K ICICI -.2763 .9521 1.00

HDFC 3.0775* .9521 .027*

AXIS 1.9150 .9521 .353

KB .8550 .9521 .945

DB .3325 .9521 .999

KB ICICI -1.1313 .9521 .840

HDFC 2.2225 .9521 .203

AXIS 1.0600 .9521 .873

J&K -.8550 .9521 .945

DB -.5225 .9521 .994

DB ICICI -.6088 .9521 .987

HDFC 2.7450 .9521 .064

AXIS 1.5825 .9521 .564

J&K -.3325 .9521 .999

KB .5225 .9521 .994


IJBMR, 9(1), 2019 Page 57

*The mean difference is significant at the 0.05 level.

Conclusion

The NPAs have dependably made a major issue for the banks in India. Profitability of banks is

antagonistically affected because of development in non-performing assets.though 90% of NPAs

of scheduled commercial banks is occupied by Public sector banks.However in current

scenario,NPAs in Private sector banks are ballooning rapidly.The study shows that HDFC Bank,

Axis Bank, Karnataka Bank and Dhanlakshmi bank have managed their asset quality in a better

manner than ICICI Bank and Jammu & Kashmir Bank.Thus there is a dire need to persue the

stringent recovery mechanism in order to curb the inflating non-performing assets in

comparatively less efficient private sector banks.

References

RBI: Statistical Tables Relating to Banks (Annual Issues) (Various Issues)

RBI: Report on Trend and Publications, New Delhi of Banking in India (Annual Issues)

(Various Issues)

Karunakar, M., “Are non - Performing Assets Gloomy or Greedy from Indian

Perspective,

Samir, DeepaKamra and N.SRana.(2010)”Non-Performing Assets(NPAs)impede

performance of Public Sector Banks”, TheJournal of Master School of Management,

Research Journal of Social Sciences, 3: 4-12, 2008.

B.Selvarajana , G. Vadivalagan, P” International Journal of Finance & Banking Studies

2013 Volume 2

Aspal, Parvesh Kumar and Malhotra, Naresh, Performance Appraisal of Indian Public

Sector Banks (September 1, 2012).

Taori K.J., “Problems and Issues relating to Management of Non Performing Assets of

Banks in India” – The Journal of Indian Institute of Bankers– April June 2000, Volume 2,

Murthy C.R.K., “Branch Level Management of Non Performing Assets: Part III –

Effective Management of Civil Litigation” – Vinimaya, Vol.XXI, No.2,

Kaveri V.S., Faculty, National Institute of Bank Management, Pune,” Prevention of

NPAs– Suggested strategies” - IBA Bulletin, August 2001.

Rajeev Meenakshi and Mahesh H P, (2010), Banking Sector Reforms and NPA: A study

of Indian Commercial Banks, Working Paper 252, The Institute for Social and Economic

Change, Bangalore, pp 1-19

Ramesh K. V. and Sudhakar A., (2012), NPA Management in Public Sector Banks: A

Study of Canara Bank and State Bank of India, International Journal of Research in

Commerce and Management, Vol. 3, Issue 11, November, pp 42-49

Saikat Ghosh Roy “Determinants of Non-Performing Assets in India - Panel Regression

Eurasian Journal of Economics and Finance 2014


IJBMR, 9(1), 2019 Page 58

Mukund P Unny (2011)“A Study on the Effectiveness of Remedies Available For Banks

in a Debt Recovery Tribunal - A Case Study on Ernakulam DRT”: Centre for Public

Policy Research.


IJBMR, 9(1), 2019 Page 59

An Analysis of Customers’ Preference towards Traditional Banking and E-

Banking in Mansa District of Punjab

Rajni Bala Assistant Professor, Department of Commerce, Nehru Memorial Government College, Mansa

Abstract

The present paper is an attempt to study the bank customers’ preference towards traditional banking and E-

Banking. It also determines those factors influencing them for shifting or not shifting from traditional banking to E-

banking and suggests the suitable measures for enhancing E-banking services. Data has been collected through

well-structured questionnaire from 96 respondents of Mansa district. Percentage method, total weighted score

method are used to analyze the data. The study concludes that traditional banking is more preferred than E-banking

by most of the customers of Mansa district. More trust in traditional banking, lack of Knowledge, lack of privacy

and security are the major factors due to which customers do not want to shift from traditional banking to E-banking.

Keywords: [Traditional banking, E-banking, Customers’ Preference]

Introduction

In Indian economy before liberalization, globalization and privatization (LPG) era, all the

financial transactions in Indian banking sector were performed manually with a very little use of

computer system. With the introduction of IT Act 2000, information technology had brought an

electronic revolution in the Indian banking sector known as E-Banking. The banks are now

providing customer centric products like ATM, internet banking, telephone-banking, mobile-

banking, debit/credit card facilities and electronic transfer fund (EFT) for providing banking

services as per convenience of customers. E-banking has reduced the dependency of customers

on the traditional banking system. Now, customers do not have to visit their bank branch and

spend much time in queues of the bank premises for conducting their financial transactions. They

can perform their banking transactions through E-delivery channels at anywhere anytime.

Despite of so many facilities that E-banking offers, Indian bank customer still relies on

traditional methods of banking system and reluctant to use E-banking. Due to this reason,

customers do not want to shift from traditional banking to E-banking. The present study is

concerned with analysis of bank customers’ preference towards traditional banking and E-

Banking

Review of Literature

Chauhan and Choudhry (2015) noted that adoption of E-Banking by the customers was at the

early stage due to various challenges. The challenges such as security risk, privacy risk, trust

factor and less awareness among customer about E-banking were acting as hurdle in adoption of

E-Banking facility.

Oye et al(2011) found that customers felt hesitation in using new technology. They believed on

cash tradition and preferred wait in long queues of bank premises for their transaction rather than

on online banking.


IJBMR, 9(1), 2019 Page 60

Khatri (2013) stated that internet banking was one of the channels of E-banking. It helped

customers to perform their financial transactions electronically over the internet. Customers’

education level, customers’ awareness about internet banking and internet infrastructure were

also major challenges for E-banking.

Sylvie and Xiaoyan (2005) explored the market status for adopting the online/mobile banking

in China by conducting the customer survey. The study concluded that mainly Chinese males not

necessarily young and highly educated were using online and mobile banking services. Lack of

computer and technology skill, perception of risk, Chinese traditional cash carrying banking

culture were found to be main barriers in the way of not adopting/using online banking. The

study also concluded that mobile banking in China was to be least used because of lack of

awareness and understanding of its benefit.

Objectives of the Study

To study and analyze the usage level of bank customers regarding traditional banking and

E-Banking.

To identify the E-banking channel most preferred by E-customers for using E-banking

services.

To determine the factors influencing the customers for shifting or not shifiting from

traditional banking to E-banking.

To suggest the suitable measures for enhancing E-Banking.


The study is concerned with analysis of bank customers’ preference towards traditional banking

and E-Banking in Mansa district. Data has been collected through well- structured questionnaire

from 96 respondents of Mansa district. Data is presented in form of tables. Percentage method

and total weighted score method have been used to analyze the data. Total weighed score has

been calculated from five point Likert scale. Highest weight is given to first rank and lowest

weight is given to lowest rank.

Data Analysis and Interpretation

Table 1: Socio-Economic Profile of Customers

Group Number Percentage %

Gender

1. Male

2. Female

67

29

69.79

30.21

Age ( In Years)

Below 25

25-35

35-50

50 or above 50

13

29

41

13

13.54

30.21

42.71

13.54

Occupation


IJBMR, 9(1), 2019 Page 61

1. Business man

2. Service man

3. Professional

41

35

20

42.71

36.46

20.83

Income

1. Below 1 lakh

2. 1lakh-3 lakh

3. 3 lakh-5 lakh

4. 5 or above 5 lakh

20

24

33

19

20.83

25.00

34.38

19.79

Total 96 100

(Authors’Calculation)

Table1 shows that out of 96 respondents, 69.79 per cent respondents are male and 30.21 per cent

are female. While studying the demographic profile, 42.41 per cent respondents belong to age

group 35 to50 years, 34.38 per cent respondents earning income from 3 lakh to 5 lakh rupees and

36.46 per cent customers belong to serviceman category show the maximum response in

comparison to others.

Table 2: Usage level of customers regarding traditional banking and E-Banking

Traditional Banking E-Banking

Group No. % No. %

Gender

1. Male

2. Female

42

22

43.75

22.92

25

7

26.04

7.29

Age ( In Years)

1.Below 25

2.25-35

3.35-50

4.50 or above 50

3

13

36

12

3.13

13.54

37.50

12.50

10

16

5

1

10.41

16.67

5.21

1.04

Occupation

1. Business man

2. Service man

3. Professional

37

15

12

38.54

15.63

12.50

4

20

8

4.17

20.83

8.33

Income

1. Below 1 lakh

2. 1lakh-3 lakh

3. 3 lakh-5 lakh


17

19

17

11

17.71

19.79

17.71

11.46

3

5

16

8

3.12

5.21

16.67

8.33

Total 64 66.67 32 33.33



IJBMR, 9(1), 2019 Page 62

Table 2 shows that overall 66.67 per cent respondents are using traditional banking services and

33.33 per cent respondents are using E-banking. Gender wise 43.75 per cent male are using

traditional banking and 26.04 per cent are using E-banking. Age group wise 37.50 per cent

respondents of age group 35 to 50 years are using more traditional banking and 16.67 per cent

respondents of age group 25 to 35 years are using more E-banking. Occupation wise traditional

banking is mostly used by business men i.e. 38.54 per cent and E-banking is mostly used by

service men i.e. 20.83 per cent. Income wise 19.79 per cent respondents earning income from 1to

3 Lakh rupees are using more traditional banking and 16.67 per cent customers earning income

from 3 to 5 lakh rupees are using more E-banking.

Table 3: Period (in years) of using Traditional Banking and E-Banking

Traditional Banking E-Banking

Group No. % No. %

Less than 1 year

1-3 years

3-5 years

More than 5 years

3

11

19

31

3.13

11.46

19.79

32.29

10

11

8

3

10.42

11.46

8.33

3.12

Total 64 66.67 32 33.33


Table 3 shows that most of the customers i.e. 32.29 per cent are using traditional banking more

than 5 years. But E-banking is mostly used by customers i.e. 11.46 per cent between 1 to 3 years.

Least percentage of customers i.e. 3.12 per cent is using E-banking services more than 5 years.

Table 4: Preference of customers regarding E-Banking Services

E-banking Services R1 R2 R3 R4 R5 Total

Score

Overall

rank

ATM 10 9 8 3 2 118 2

Internet banking 13 8 7 2 2 124 1

Mobile banking 12 5 7 3 5 112 3

Telephone banking 0 2 2 7 21 49 5

Credit card 4 9 14 4 1 107 4


Table 4 reveals that most of the respondents give the first rank to internet banking because it is

useful for them to transfer their fund. Second rank goes to ATM as customers can deposit and

withdraw the money anywhere anytime. Third rank goes to mobile banking and fourth rank goes

to credit card as it is convenient for shopping without carry any cash. Fifth rank goes to


IJBMR, 9(1), 2019 Page 63

telephone banking as the customers consider it unpractical device for conducting banking

transactions.

Table 5: Response of customers regarding shifting from traditional banking to E-banking

Yes No

Group No. % No. % Total

Gender

1. Male

2. Female

25

10

26.04

10.42

17

12

17.71

12.50

42

22

Age ( In Years)

1.Below 25

2.25-35

3.35-50

4.50 or above 50

2

8

22

3

2.08

8.33

22.92

3.13

1

5

14

9

1.04

5.21

14.58

9.38

3

13

36

12

Occupation

1. Business man

2. Service man

3. Professional

18

9

8

18.75

9.38

8.33

19

6

4

19.79

6.25

4.17

37

15

12

Income

1. Below 1 lakh

2. 1lakh-3 lakh

3. 3 lakh-5 lakh


7

10

12

6

7.29

10.42

12.5

6.25

10

9

5

5

10.42

9.37

5.21

5.21

17

19

17

11

Total 35 36.46 29 30.21 64


Table 5 shows that overall 36.46 per cent respondents want to shift from traditional banking to

E-banking and 29 per cent respondents are not willing to shift. Gender wise 26.04 per cent male,

Age group wise 22.92 per cent respondents of age group 35 to 50 years, Occupation wise 18.75

per cent customers belong to business class and Income wise 10.42 per cent respondents earning

from 3 to 5 Lakh rupees are more willing to shift from traditional banking to E-banking.


IJBMR, 9(1), 2019 Page 64

Table 6: Factors influencing customers for shifting from traditional banking to E-banking

services (for those customers who want to shift)

Factors R1 R2 R3 R4 R5 Total

Score

Overall

rank

Easy to access/convenient 9 6 10 7 3 116 2

Up to date and accurate information 7 6 9 7 6 106 4

Quick transfer of fund 10 7 8 5 5 117 1

Use of anywhere anytime and no

need to wait in long queues of bank

8 7 8 6 6 110 3

More transparency 5 3 9 8 10 90 5


Table 6 reveals that quick transfer of funds and easy to access/convenient are the strongest

factors influencing the customers for shifting from traditional banking to E-banking services. Up

to date and accurate information and transparency are the least motivational factors influencing

the customers for shifting from traditional banking to E-banking services.

Table 7: Factors influencing the customers for not shifting from traditional banking to E-

banking Services (for those customers who do not want to shift)

Factors R1 R2 R3 R4 R5 Total

Score

Overall

rank

Lack of awareness 9 6 5 6 3 99 4

Difficult and complicated 6 8 9 3 3 98 5

Lack of privacy and security 8 7 7 4 3 100 3

Lack of knowledge how to use it 10 8 5 4 2 107 2

More trust in traditional 13 7 4 3 2 113 1


Table 7 shows that more trust in traditional banking, lack of Knowledge, lack of privacy and

security are the major factors influencing the customers for not shifting from traditional banking

to E-banking.

Table 8: Suggestions to enhance E-banking services

Suggestions R1 R2 R3 R4 R5 Total

Weighted

Score

Overall

rank

Customers training camp , seminar and

demo fair regarding E-Banking services

should be organized by bank

42 32 7 10 5 384 1


IJBMR, 9(1), 2019 Page 65

Reading material regarding E-banking

services should be provided by bank

28 32 14 10 12 342 3

Help desk and inquiry counter should be

set up by bank

40 30 9 11 6 375 2

E-banking should be more secure to build

the trust of customers regarding it

31 23 17 15 10 338 4

Rules format and accessing E-banking

services should be simplified

20 15 30 16 15 297 5

(Author’s calculation)

Table 8 shows that most of the respondents suggested that customer training camps, seminars

and demo fairs regarding E- banking services should be organized by banks. Help desk and

inquiry counter should be established by banks to provide the solution of customers’ problems.

Reading material regarding E-banking services should be provided by banks to customers and

bank should make efforts for providing E-banking services more safe and secure.

Findings and Conclusion

Overall 66.67 per cent respondents are using traditional banking services and 33.33 per cent

respondents are using E-banking. Gender wise male, age wise respondents of age group 25 to 35

years, occupation wise service class, and income wise respondents earning income from 3 lakh to

5 lakh rupees are more using E-banking services in comparison to others. 36.46 per cent

respondents want to shift from traditional banking to E-banking. Quick transfer of funds and

easy to access/convenient are the strongest factors influencing the customers for shifting from

traditional banking to E-banking Services. 29 per cent respondents are not willing to shift from

traditional banking to E-banking services. More trust in traditional banking, lack of Knowledge,

lack of privacy and security are the major factors influencing the customers for not shifting from

traditional banking to E-banking. The study suggested that customer training camps, seminars

and demo fairs regarding E- banking services should be organized by banks. Help desk and

inquiry counter should be established by banks to provide the solution of customers’ problems.

Reading material regarding E-Banking services should be provided by banks to customers and

bank should make efforts for providing E-banking services more safe and secure to enhance E-

banking services in this area.

Limitation of the Study

Data has been collected from limited geographical area. The findings and conclusion of the

present study can be varied if further research is to be carried on in near future.

References

Chauhan, V & Choudhary, V. (2015). Internet Banking: Challenges and Opportunities

in Indian Context.Apeejay - Journal of Management Sciences and Technology, 2(3), pp.

29-40.


IJBMR, 9(1), 2019 Page 66

Khatri, J. (2013). Internet Banking in Nepal :Use and Challenges. Banking Journal, 3(2),

pp.55-57.

Oye. N. D., Shakil, M. A & Lahad, N. A. (2011). E-Banking: A case study of Askari

Commercial bank Pakistan. International journal of Engineering Research and

Application, September-October, 1 (3), pp. 1152-1167.

Sylvie, L & Xiaoyan, L. (2005). Customers attitude towards online and Mobile banking

in China. International Journal of Bank Marketing, 23 (5), pp.362-380.


IJBMR, 9(1), 2019 Page 67

A Comparative Study on Profitability Analysis of Selected Indian

Information Technology Industries

Tegjit Kaur

Research Scholar, Department of Economics, Desh Bhagat University, Mandi Gobindgarh

Abstract

IT has great possibility of becoming an engine of accelerated economic growth, efficiency, improvement for all

sectors of the economy, developing India’s position in export market, improving trade insufficiency and means of

efficient governance. This study is based on secondary data and discussions with personnel concerned. The

secondary data consists of the annual reports of three IT Industries ranging for the last 10 years. The data of the

sample IT industries (for a period of five years from 2008 to 2012) has been collected from the annual reports

published by the IT industries. The Financial tool that is used for the purpose of analysis are Earning Per

Share(EPS), Operating Profit Margin(OPM), Net Profit Margin(NPM), Debt Equity Ratio(DER), Return On

Assets(ROA), Return On Net worth(RNW), Current Ratio (CR), Fixed Assets Turnover Ratio(FTR) In this study we shall make analysis of each ratio by Descriptive Statistics (Mean, S.D., C.V.), Trend Analysis, One Way ANOVA and

Two Way ANOVA.

Keywords: [Profitability, IT Industries, India]

Introduction

Despite the global economy growing up, the Indian Information technology industry is

maintaining a steady pace of growth. Financial analysis is an aspect of the overall business

finance function that involves examining historical data for gain information about the current

and future financial health of a company. IT has great possibility of becoming an engine of

accelerated economic growth, efficiency, improvement for all sectors of the economy,

developing India’s position in export market, improving trade insufficiency and means of

efficient governance. In enhances way in to information, protects consumers, provides access to

government services, makes skill creation and training more effective, improves liberation of

health services, and promotes simplicity. The present paper attempts to measure the profitability

position of leading Indian IT companies for the period 2005-15. The paper is structured as

follows: it presents scope of study, a brief review of the literature dealing with the accounting

and liquidity performance, followed by a description of the objectives, data and methodology.

Subsequently, it discusses the results, and finally, offers the conclusion.

Review of Literature

Bortolotti et al. (2002) examined the financial and operating performance of thirty one national

telecommunication companies in twenty five countries that were fully or partially privatized

through public share offering. Using conventional pre-versus post-privatization comparisons and

panel data estimation techniques, they find that the financial and operating performance of

telecommunication companies improves significantly after privatization, but a sizable fraction of

the observed improvement results from regulatory changes-alone or in combination with major

ownership changes-rather than from privatization alone


IJBMR, 9(1), 2019 Page 68

Rao et al. (2013) in their study entitled “An Empirical Analysis on Financial Performance of

Public Sector Housing Corporation in India: A Case Study of HUDCO”, stated that the main

concept of their study is Profitability and liquidity management is of crucial importance in

financial management decision. The most favourable financial performance could be achieved by

a company that can trade-off between profitability and liquidity performance indicators. The

purpose of this study is to find out the financial position of and know the significance of them.

Descriptive statistics discloses that performance of the selected unit in terms of liquidity,

solvency and profitability position is very satisfactory and relatively efficient financial position is

found in 36 all the cases. They suggested that both the institutions under the study should

concentrate on financial profitability, especially unexplained variables in purpose of creating

shareholders‟ wealth

Daga and Parikh (2014) analyzed the financial performance of three IT giants of India – Tata

Consultancy Services limited (TCS), Wipro Limited and Infosys Technologies Pvt. Ltd and

understanding their foreign market exposure risk. With depreciation of Indian currency

(depreciated to almost 60% since global economic crises 2008), understanding the exposure risk

of Indian IT sector becomes all the more important. The study is based upon secondary data

covering the period from 2003-2004 to 2012-2013. For analyzing the financial performance of

all the three companies, growth analysis and ratio analysis are calculated. To understand the

foreign market exposure risk Coefficient of Variation and Ratio analysis of turnover, gross profit

and net profit for companies for two different period, 2003-2008 and 2008-2013 are calculated

and compared.

Davda (2012) analyzes the profitability position of the sample banks ICICI, HDFC, AXIS,

KOTAK MAHINDRA, ING Vysya Bank and Indusind Bank for a period of ten years 2002 to

2011. The study helps an investor who would like to be rational and scientific in his investment

activity has to evaluate a lot of information about past performance and the expected future

performance of the companies, industries and the economy as a whole before taking the

investment decision The Financial tool that is used for the purpose of analysis are Earning Per

Share, Net Profit Margin, Return on Equity, Assets turnover Ratio, and Return on Assets. While

interpreting the results, the statistical tool of one way Analysis of Variance (ANOVA) has been

used.

Sornaganesh and Maheswari (2014) anaylsed the profitability position the sample companies.

The study adopts an analytical and descriptive research design. The data of the sample IT

industries (for a period of five years from 2008 to 2012) has been collected from the annual

reports published by the IT industries. The Financial tool that is used for the purpose of analysis

are Earning Per Share(EPS), Operating Profit Margin(OPM), Net Profit Margin(NPM), Debt

Equity Ratio(DER), Return On Assets(ROA), Return On Net worth(RNW), Current Ratio (CR),

Fixed Assets Turnover Ratio(FTR).The statistical tool that is used for testing hypothesis is Two-

Way Analysis Of Variance (ANOVA).


IJBMR, 9(1), 2019 Page 69

Objectives

In the background of the above discussion the following broad objectives are outlined to Study

the Profitability Analysis of Information Technology Companies.

To analyze the financial efficiency of the Information Technology Industries.

To analyze the profitability position of the Information Technology Industries.

Research Hypothesis

The following Hypotheses have been taken to test

H01: The GPS of TCS, Infosys and Wipro does not differ significantly.

H02: The NPS of TCS, Infosys and Wipro does not differ significantly.

H03: The ROCE of TCS, Infosys and Wipro does not differ significantly.

H03: The RONW of TCS, Infosys and Wipro does not differ significantly.

Scope of the Study

The study aimed to make an analysis of financial performance of Information

Technology industries in India. Hence, the present study is pertaining to Indian top

three Information Technology companies. The study has used the financial facts of

the selected companies from 2005-06 to 2014-15. The financial performance of the

sample companies is evaluated in terms of Profitability.

Sample Design

Sampling Technique: The study is done with special reference to IT industries in India. The

reason being that the data or the financial statements are readily available . Apart from this, IT

industries in India are bound to disclose all their facts and figures publicly. Thus, the technique

of 'Convenience Sampling' is being adopted for the study.

Sample Size: A sample of three IT Industries in India viz., TCS, INFOSYS and WIPRO is

consider for the purpose of analysis.

Data and Variables

This study is based on secondary data and discussions with personnel concerned. The secondary

data consists of the annual reports of three IT Industries ranging for the last 10 years.

Time Period of the Study

The study is conducted based on the audited financial statements of three selected companies of

IT Industries for a period of 10years (2005-06 to 2014-15) The duration of the period is good

enough to cover the short term fluctuations and is sufficient to provide insights into the

performance of the different selected companies.


IJBMR, 9(1), 2019 Page 70

Methodology

The present study adopts an analytical and descriptive research design. The data of the sample IT

industries (for a period of 10 years from 2005-06 to 2014-15) has been collected from the annual

reports published by the IT industries. A finite sample size of three industries has been selected

for the purpose of the study which are TCS, WIPRO and INFOSYS. .The following tools &

techniques has been classified in the study

1. Profitability Ratio Analysis

A Ratio is figure showing the logical relationship between any two items taken

financial Statement. A number of ratios are used by profitability analysis. They can be

classified as

Operating Profit Ratio,

Net Profit Ratio

ROCE

RONW

2. Descriptive Statistical Analysis

Mean

S.D.

C.V.

3. Straight line Trend Analysis

The trend equation is formed as

Y =

Where:

is the constant term and

is the slope of the trend line

4. Advanced technique such as One Way ANOVA and Two Way ANOVA are also applied

Results

Operating Profit Ratio

Operating Profit Ratio measures the relationship between operating profit and revenue from

operation. An increase in the ratio over the previous period shows improvement in operational

efficiency of the business enterprise. The results of various analyses on Operating Profit Ratio of

selected IT Companies are as under:

Descriptive Statistics

Descriptive statistics of IT industries wise and year wise Operating Profit Ratio are shown in the

following table no 4.1


IJBMR, 9(1), 2019 Page 71

Table 1: Descriptive statistics of Operating Profit Ratio between IT industries

Year TCS INF WIP Mean SD CV

2005-06 28.26 32.47 24 28.2 4.2 15.0

2006-07 27.7 31.8 22.9 27.5 4.5 16.2

2007-08 25.5 31.6 20 25.7 5.8 22.6

2008-09 26.2 33.5 20.5 26.7 6.5 24.4

2009-10 29.7 34.6 22 28.8 6.4 22.1

2010-11 29.8 32.6 20.7 27.7 6.2 22.5

2011-12 29.6 32 18.8 26.8 7.0 26.2

2012-13 29 28.9 20.45 26.1 4.9 18.8

2013-14 30.9 27.4 22.18 26.8 4.4 16.4

2014-15 26.1 28.7 21.9 25.6 3.4 13.4

Mean 28.3 31.4 21.3

SD 1.8 2.3 1.5

CV 6.5 7.3 7.2

Table 1 shows the average Operating Profit Ratio of different years is the highest in case of

Infosys (31.4), followed by TCS with average Operating Profit Ratio of different years (28.3)

and Wipro with the average Operating Profit Ratio Of different years (21.3) .Coefficient of

Variation of different years is highest in case of Infosys (7.3) showing more variability and less

consistency in Operating Profit Ratio. Coefficient of Variation of different years is slightly less

in case of Wipro (7.2) and lowest in case of TCS (6.5) showing more consistency and

homogeneity and less variability in Operating Profit Ratio.

Year-wise analysis shows that the average Operating Profit Ratio is highest in the year 2009-10

that is 28.8 for selected three IT industries (TCS, Infosys and Wipro). Coefficient of Variation is

highest in case of year 2011-12 (26.2 percent) indicating more variability in Operating Profit

Ratio across the selected IT industries.

It is concluded that Infosys has the highest average Operating Profit Ratio as compare to all other

selected IT Companies during the study period. TCS Company has higher degree of uniformity

in Operating Ratio during study period. So, Infosys has more managerial efficiency as compare

to other selected industries. It is also concluded that in the year 2014-15 of selected companies

there is higher degree of uniformity in Operating Profit Ratio as compared to other years.

Straight line Trend Analysis

The trend equation is formed as

Y =

Where:

is the constant term and

is the slope of the trend line

In trend analysis, we estimated Model Summary and trend equations of Operating Profit Ratio of

selected companies.


IJBMR, 9(1), 2019 Page 72

Table 2: Model Summary for Operating Profit Ratio of selected Companies

R R2 F value p value Constant

value

Beta

coefficient t value p value

TCS 0.30 0.09 0.83 0.39 27.3 0.19 0.91 0.39

INF 0.68 0.46 6.81 0.03* 34.2 -0.51 -2.61 0.03*

WIP 0.34 0.11 1.02 0.34 22.3 -0.17 -1.01 0.34

*Significant at 0.05 level

The above table no.2 show that time doesn’t have a significant effect on Operating Profit Ratio

of TCS and Wipro because the coefficient of time is insignificant and R2 is very low, therefore,

the models of TCS and Wipro are not a good fit. But in the case of Infosys, time has a significant

effect on Operating Profit Ratio because the coefficient of time is significant and R2 is not very

low.

The estimated trend equations are;

TCS: y = 0.19X + 27.3

INF: y = -0.51X + 34.2

WIP: y = -0.17X + 22.3

It is concluded that time does not affect much on the Operating Profit of TCS and Wipro

Companies.

One Way Analysis of Variance

For the testing of the following hypothesis, One Way ANOVA has been applied on

Operating Profit Ratio of selected companies.

Hypothesis:

H0: There is no significant difference in Mean Operating Profit Ratio of selected IT Companies

between the years.

H1: There is significant difference in Mean Operating Profit Ratio of selected IT Companies

between the years.

Table 3: One Way ANOVA

Source of

Variation SS df MS F P-value F crit

Between

Years 30.12001 9 3.346668 0.112485 0.998997 2.392814

Within Years 595.0415 20 29.75207

Total 625.1615 29

The above table shows that the calculated F-value is less than that of table value, so null

hypothesis is accepted .The result shows that there is no significant difference in Operating Profit

Ratio of selected years.


IJBMR, 9(1), 2019 Page 73

It is concluded that Operating Profit Ratio of selected IT companies remained constant

during the study period.

Two Way ANOVA

To test the following Hypotheses, Two Way ANOVA has been used on Operating Profit Ratio

of selected companies

Hypothesis Testing:

Comparison between companies:

H0: Mean Operating Profit Ratio of selected years is not significantly different between selected

IT companies.

H1: Mean Operating Profit Ratio of selected years is significantly different between selected IT

companies.

Comparison between years:

H0: Mean Operating Profit Ratio of selected IT companies is not significantly different between

selected years.

H1 ; Mean Operating Profit Ratio of selected IT companies is significantly different between

selected years

Table 4: Two Way ANOVA for Operating Profit Ratio

Source of Variation SS Df MS F P-value F crit

Between the Companies 526.13 2 263.714 68.7 3.75e-09 3.55

Between the Years 30.129 9 3.34 0.87 0.57 2.45

Error 68.91 18 3.82

Total 625.16

The above table shows the result of Operating Profit Ratio between the companies and years

Between the Companies

The calculated F-value is more than the table value. So, the null hypothesis is rejected. The result

shows that there is significant difference in Operating Profit Ratio of selected companies. It

means that Operating Profit Ratio varies between the selected IT Companies.

Between the years

In the above table the calculated F-value is less than the table value. So, the null hypothesis is

accepted, the result shows that there is no significant difference in Operation Profit Ratio

between the years. This implies that the Operating Profit ratio has not fluctuated much in

different years.

It is concluded that Operating Profit Ratio varies between the companies but not between years.

Net Profit Ratio

Net Profit Ratio establishes the relationship between net profit and revenue from operation. This

ratio helps in determining the operational efficiency of the business .An increase in the ratio over

the previous period shows improvement in operational efficiency and decline means otherwise.

A comparison with the industry standard is also an indicator of the efficiency of a business. The

results of various analyses on Net Profit Ratio of selected IT Companies are as under:


IJBMR, 9(1), 2019 Page 74


Descriptive statistics of IT industries wise and year wise Net Profit Ratio are shown in following

table 5

Table 5: Descriptive statistics of Net Profit Ratio between IT industries


2005-06 22.21 25.23 19.28 22.2 3.0 13.4

2006-07 22.41 27.1 19.31 22.9 3.9 17.1

2007-08 21.98 27.91 16.43 22.1 5.7 26.0

2008-09 18.89 27.6 15.17 20.6 6.4 31.0

2009-10 23.31 27.55 17.01 22.6 5.3 23.4

2010-11 24.29 24.85 17.05 22.1 4.4 19.7

2011-12 21.29 24.69 15.07 20.4 4.9 24.0

2012-13 22.09 23.36 16.43 20.6 3.7 17.9

2013-14 23.42 21.25 18.3 21.0 2.6 12.2

2014-15 20.97 23.2 18.44 20.9 2.4 11.4

Mean 22.1 25.3 17.2

SD 1.5 2.2 1.5

CV 6.8 8.9 8.9

Table 5 shows the average Net Profit Ratio of different years is highest in case of Infosys (25.3),

followed by TCS with average Net Profit Ratio of different years (22.1) and Wipro with average

Net Profit Ratio of different years (17.2). Coefficient of Variation of different year is highest in

case of Infosys and Wipro (8.9) showing more variability and less consistency in Net Profit

Ratio. Coefficient of Variation of different year is lowest in case of TCS (6.8) showing more

consistency and homogeneity and less variability in Net Profit Ratio.

Year-wise analysis shows that the average Net Profit Ratio is highest in year 2006-07 that is

22.9 for selected three IT industries (TCS, Infosys and Wipro). Coefficient of Variation is

highest in case of year 2008-09 (31 percent) indicating more variability in Net Profit Ratio for

selected IT industries.

It is concluded that Infosys has highest average Net Profit Ratio as compared to all other

selected IT Companies .TCS company has high degree of uniformity in Net Profit Ratio during

study period .So, Infosys has more overall efficiency as compare to other selected industries. It is

also concluded that in year 2014-15 of selected companies have higher degree of uniformity in

Net Profit Ratio as compared to other years.

Straight Line Trend Analysis

The trend equation form as

Y =

Where:

is constant term and

is the slope of trend line


IJBMR, 9(1), 2019 Page 75

Table 6: Model Summary for Net Profit Ratio of selected Companies


value

Beta


TCS 0.06 0.003 0.03 0.88 21.9 0.03 0.16 0.88

INF 0.76 0.58 11.1 0.00** 28.4 -0.57 -3.33 0.00**

WIP 0.18 0.03 0.26 0.62 17.7 -0.09 -0.51 0.62

**Significant at 0.01 level

The above table 6 shows that time doesn’t have a significant affect much on Return on Capital

Employed Ratio of TCS and Wipro because the coefficient of time is insignificant and R2 is very

low. Therefore, the models of TCS and Wipro are not a good fit. But in the case of Infosys, time

has effect much on Net Profit Ratio because the coefficient of time is significant and R2 is not

very low.

The estimated trend equations are ;

TCS :y = 0.03X + 21.9

INF : y = -0.57X + 28.4

WIP :y = -0.09X + 17.7

It is concluded that time not affect on Net profit of TCS and Wipro companies

One Way ANOVA

For the testing of hypothesis, One Way ANOVA has been applied on Net Profit Ratio of selected

companies.

Hypothesis Testing:

H0: There is no significant difference in Mean Net Profit Ratio of selected IT Companies

between the years.

H1: There is significant difference in Mean Net Profit Ratio of selected IT Companies between

years.


Source of

Variation SS Df MS F P-value F crit

Between years 24.58096 9 2.731218 0.140324 0.997637 2.392814

Within years 389.2723 20 19.46362

Total 413.85326 29

In above table shows that the calculated F-value is less than table value. So, null hypothesis is

accepted .The result shows that there is no significant difference in Net Profit Ratio of selected

years.

It is concluded that Net Profit Ratio of selected IT companies remains constant during study

period

Two Way ANOVA


IJBMR, 9(1), 2019 Page 76

For the testing hypotheses, Two Way ANOVA has been applied on Net Profit Ratio of selected

companies

Hypotheses Testing:


H0:Mean Net Profit Ratio of selected years is not significantly different between selected IT

companies.

H1:Mean Net Profit Ratio of selected years is significantly different between selected IT

companies.


H0: Mean Net Profit Ratio of selected IT companies is not significantly different between

selected years.

H1 ; Mean Net Profit Ratio of selected IT companies is significantly different between selected

years

Table 8: Two Way ANOVA for Net Profit Ratio


Between the Companies 326.5351 2 163.2676 46.84327 7.34E-08 3.554557

Between the Years 24.58096 9 2.731218 0.783617 0.634369 2.456281

Error 62.73721 18 3.4854

Total 413.8533 29

The above table shows that result of Net Profit Ratio between the companies and years

Between the companies


shows that there is significant difference in Net Profit Ratio of selected companies. It means that

Net Profit Ratio varies between the selected IT Companies.

Between the years

In above table the calculated F-value is less than table value. So, null hypothesis is accepted. The

result shows that there is no significant difference in Net Profit Ratio of selected years. This

implies that Net Profit Ratio is not fluctuated in different years.

It is concluded that Net Profit Ratio is varies between the companies but not between years.

Return on Capital Employed Ratio

Return on Capital Employed ratio establishes the relationship between Net Profit before Interest

Tax and Dividend to Capital employed. It aims to determine the overall performance of the

enterprise. The results of various analyses on Return on Capital Employed Ratio of selected IT

Companies are as under:


Descriptive statistics of IT industries wise and year wise Return on Capital Employed Ratio are

shown in following table 9


IJBMR, 9(1), 2019 Page 77

Table 9: Descriptive Statistics of R.O.C.E between IT industries


2005-06 49.45 35.28 34.2 44.22667 12.64 22.5

2006-07 55.9 42.3 35.9 42.83333 10.0 23.86

2007-08 47.1 37.2 30.5 33.53333 8.5 25.35

2008-09 37.5 37.4 30.5 31.4 8.5 27.07

2009-10 41 30.3 28.8 29.8 9.6 32.21

2010-11 42.2 27.9 25.8 29.7 10.5 35.35

2011-12 38.3 29.1 22.5 28.43333 10.1 35.5

2012-13 40.6 27.2 23.15 31.50667 8.2 26.03

2013-14 43.4 25.8 24.73 32.64667 9.7 29.7

2014-15 38.5 26 23.34 29.87667 7.2 24.1

Mean 43.07 31.87 25.24

SD 7.24 6.14 5.42

CV 16.80 19.2 21.4

Table 9 shows the average Return on Capital Employed of different years is the highest in case

of TCS ( 43.07), followed by Infosys with average Return on Capital Employed Ratio of

different years (31.87) and Wipro (25.24) with average Return on Capital Employed Ratio of

different years. Coefficient of Variation of different year is highest in case of Wipro (21.4)

showing more variability and less consistency in Return on Capital Employed Ratio. Coefficient

of Variation of different year is slightly less in case of Infosys (19.2) and lowest in case of TCS

(16.8) showing more consistency and homogeneity and less variability in Return on Capital

Employed Ratio.

Year-wise analysis shows that the average Return on Capital Employed Ratio is highest in year

2005-06 that is 44.22 for selected three IT industries (TCS, Infosys and Wipro). Coefficient of

Variation is highest in case of year 200-11 (35.3percent) indicating more variability in Return on

Capital Employed Ratio for selected IT industries.

It is concluded that TCS has the highest average and has higher degree of uniformity in ROCE

during study period. So, TCS has more overall performance as compare to other selected IT

Industries. It is also concluded that in year 2005-06 have highest average and in year 2005-06 of

selected companies have higher degree of uniformity in ROCE as compared to other years.



Y =

Where:

is the constant and



IJBMR, 9(1), 2019 Page 78

In applying of trend analysis, we estimated Model Summary and trend line equation of

Ratio of selected companies.

Table 10: Model Summary for Return on Capital Employed Ratio of selected Companies


value

Beta


TCS 0.61 0.37 4.73 0.06* 51.1 -1.46 -2.17 0.06

INF 0.93 0.86 48.9 0.00** 42.2 -1.88 -7.0 0.00**

WIP 0.37 0.14 1.23 0.30 28.8 -0.66 -1.11 0.30

**Significant at 0.01 level

The above table 10 shows that time doesn’t have a significant affect much on Return on Capital

Employed Ratio of TCS and Wipro because the coefficient of time is insignificant and R2 is

very low. Therefore, the models of Wipro and TCS are not a good fit. But in the case of Infosys,

time has effect much on Return on Capital Employed Ratio because the coefficient of time is

significant and R2 is not very low.

The estimated trend equations are

TCS : y =-1.46X + 51.1

INF : y = -1.88X + 42.4

WIP: y = -0.66X + 28.8

It is concluded that time does not affect much on return on capital employed of Wipro

Companies.


For the testing of hypothesis, One Way ANOVA has been applied on Return on Capital

Employed Ratio of selected companies.

Hypothesis Testing

H0: There is no significant difference in mean Return on Capital Employed Ratio of selected IT

Companies between the years.

H1: There is significant difference in mean Return on Capital Employed Ratio of selected IT

Companies between years.


Source of


Between Years 834.3179 9 92.70199 0.993183 0.475807 2.392814

Within Years 1866.766 20 93.33828

Total 2701.089 29


IJBMR, 9(1), 2019 Page 79


accepted .The result shows that there is no significant difference in Operation Profit Ratio of

selected years.

It is concluded that Return on Capital Employed Ratio of selected IT companies remained

constant during study period.

Two Way ANOVA

For the testing hypotheses, Two Way ANOVA has been applied on Return on Capital Employed

Ratio of selected companies

Hypothesis Testing

Comparison between companies

H0: Mean Return on Capital Employed Ratio of selected years is not significantly different

between selected IT companies.

H1: Mean Return on Capital Employed Ratio of selected years is significantly different between

selected IT companies.


H0: Mean Return on Capital Employed Ratio of selected IT companies is not significantly

different between selected years.

H1 ; Mean Return on Capital Employed Ratio of selected IT companies is significantly different

between selected years

Table 12: Two Way ANOVA for Return on Capital Employed Ratio


Between the Companies 1625.168 2 812.5841 60.54083 1.02E-08* 3.554557

Between the Years 834.3179 9 92.70199 6.906676 0.000268* 2.456281

Error 241.5975 18 13.42208

Total 2701.0834 29


The above table shows that result of Return on Capital Employed Ratio by between the

companies and years between the companies

The calculated F-value is more than the table value. So, the null hypothesis is rejected. The

results show that there is significant difference in Return on Capital Employed Ratio of selected

companies. It means that Return on Capital Employed Ratio varies between the selected IT

Companies.

Between the years

In above table the calculated F-value is more than table value. So, null hypothesis is rejected.

The result shows that there is significant difference in Return on Capital Employed Ratio of

selected years. So it means that Return on Capital Employed Ratio is fluctuated in different

years.

It is concluded that Return on Capital Employed Ratio is varies between companies as well as

between years.


IJBMR, 9(1), 2019 Page 80

Return of Net Worth Ratio

Return of Net Worth is also known as Return on Equity. It indicates the amount of net income

returned as a percentage of share equity. Return on Equity measure Corporations profitability by

revealing how much profit a company generates with the money shareholder have investment.

The results of various analyses on Return of Net Worth Ratio of selected IT Companies are as

under:


Descriptive statistics of IT industries wise and year wise Return of Net Worth Ratio are shown

in following table 13

Table 13: Descriptive statistics of Return of Net Worth Ratio between IT industries


2005-06 49.45 35.28 34.2 39.6 8.5 21.5

2006-07 55.9 42.3 35.9 44.7 10.2 22.8

2007-08 47.1 37.2 30.5 38.3 8.4 21.8

2008-09 37.5 37.4 30.5 35.1 4.0 11.4

2009-10 41 30.3 28.8 33.4 6.7 19.9

2010-11 42.2 27.9 25.8 32.0 8.9 27.9

2011-12 38.3 29.1 22.5 30.0 7.9 26.5

2012-13 40.6 27.2 23.15 30.3 9.1 30.1

2013-14 43.4 25.8 24.73 31.3 10.5 33.5

2014-15 38.5 26 23.34 29.3 8.1 27.6

Mean 43.4 31.8 27.9

SD 5.8 5.8 4.8

CV 13.4 18.1 17.1

Table 13 shows the average Return of Net Worth Ratio of different years is highest in case of

TCS (43.4), followed by Infosys with average Return of Net Worth Ratio of different years

(31.8) and Wipro with average Return of Net Worth Ratio of different years (27.9). Coefficient

of Variation of different year is highest in case of Infosys (18.1) showing more variability and

less consistency in Return of Net Worth Ratio. Coefficient of Variation of different year is

slightly less in case of Wipro (17.2) and lowest in case of TCS (13.4) showing more consistency

and homogeneity and less variability in Return of Net Worth Ratio.

Year-wise analysis shows that the average Return of Net Worth Ratio is highest in year 2006-07

that is 44.7 for selected three IT industries (TCS, Infosys and Wipro). Coefficient of Variation is

highest in case of year 2013-14 (33.4 percent) indicating more variability in Return of Net Worth

Ratio for selected IT industries.

It is concluded that TCS has highest average and have higher degree of uniformity in RONW

during study period. So, TCS has more profit to generates with the money shareholder have


IJBMR, 9(1), 2019 Page 81

investment. It is also concluded that in year 2008-09 of selected companies there is higher degree

of uniformity in Return on Net Worth as compare to other years.



Y =

Where:

is the constant and


In applying of trend analysis, we estimated Model Summary and trend equations of

Return on Net Worth of selected companies.

Table 14: Model Summary for Return of Net Worth Ratio of selected Companies


value

Beta


TCS 0.68 0.46 6.73 0.03* 50.6 -1.3 -2.59 0.03*

INF 0.88 0.78 27.6 0.00** 41.1 -1.67 -5.26 0.00**

WIP 0.92 0.85 45.1 0.00** 35.9 -1.45 -6.71 0.00**

**Significant at 0.01 level *Significant at 0.05 level

The above table 14 shows that time has a significant affect much on Return on Capital

Employed Ratio of TCS, Infosys and Wipro because the coefficient of time is significant and R2

is very not low. Therefore, the models of TCS, Infosys and Wipro are a good fit. But in the case

of all selected companies, time has effect much on Return on Capital Employed Ratio because

the coefficient of time is significant and R2 is not very low

The estimated trend equations are

TCS :y = -1.3X + 50.6

INF : y = -1.67X + 41.1

WIP :y = -1.45X + 35.9

It is concluded that time affect much on Return on Net Worth of all selected companies.


For the testing of hypothesis, One Way ANOVA has been applied on Return of Net Worth Ratio

of selected companies.

Hypothesis Testing:

H0: There is no significant difference in Mean Return of Net Worth Ratio of selected IT

Companies between the years.

H1: There is significant difference in Mean Return of Net Worth Ratio of selected IT Companies

between years.


IJBMR, 9(1), 2019 Page 82


Source of


Between years 684.4519 9 76.05021 1.073678 0.422308 2.392814

Within years 1416.629 20 70.83146

Total 2101.081 29


accepted .The result shows that there is no significant difference in Return on Net Worth of

selected years.

It is concluded that Return of Net Worth Ratio of selected IT companies remained constant

during study period

Two Way ANOVA

For the testing hypotheses, Two Way ANOVA has been applied on Return of Net Worth Ratio

of selected companies

Hypotheses Testing:


H0: Mean Return of Net Worth Ratio of selected years is not significantly different between


H1: Mean Return of Net Worth Ratio of selected years is significantly different between



H0: Mean Return of Net Worth Ratio of selected IT companies is not significantly different

between selected years.

H1 ; Mean Return of Net Worth Ratio of selected IT companies is significantly different between

selected years

Table 16: Two Way ANOVA for Return of Net Worth Ratio


Between the Companies 1291.284 2 645.6421 92.7165 3.32E-10* 3.554557

Between the Years 684.4519 9 76.05021 10.92108 1.22E-05* 2.456281

Error 125.3451 18 6.963616

Total 2101.081 29


The above table shows that result of Return of Net Worth Ratio between the Companies and

Years

Between the selected companies


shows that there is significant difference in Return of Net Worth Ratio of selected companies. It

means that Return of Net Worth Ratio varies between the selected IT Companies.

Between the selected years


IJBMR, 9(1), 2019 Page 83

In above table the calculated F-value is more than table value, so null hypothesis is reject the

result shows that there is significant difference in Return of Net Worth Ratio of selected years.

This implies that Return of Net Worth Ratio is fluctuated in different years.

It is concluded that Return of Net Worth Ratio varies between companies as well as between

years

References

Bortolotti, B.D., Souza, J.F., Antini, M., Megginson, W.L., (2012). Privatization and the

sources of performance improvement in the global telecommunications industry,

Telecommunications Policy, Volume- 13, July Pp. 465-474

Daga, A. and Parikh, A.(2013). Financial Performance Analysis of Forex Exposure of

Indian IT Sector with Special Reference to Tata consultancy Services Limited, Infosys

Technologies Pvt. Ltd. and Wipro Limited, Paripex- Indian Journal of Research,

Volume: 3

Davda, N.V. (2012). Comparative Study of Selected Private Sector Banks in India,

International Journal of Research in Commerce & Management, Vol.3 (7).

Sornaganesh, V., Maheswari, D (2014). Fundamental analysis of IT industry in India,

International Journal of Informative & Futuristic Research Volume -1 (8).


IJBMR, 9(1), 2019 Page 84

Medical Tourism: A Paradigm in our Country

Pooja Rani Research Scholar, Department of Management, Desh Bhagat University, Mandi Gobindgarh

Abstract

Tourism over the years has cropped up to be the world‘s largest and fastest growing industry. It is a major

phenomenon of the modern society. Medical tourism is the travel of people to a place other than where they

normally reside for the purpose of obtaining medical treatment in that country. Traditionally, people would travel

from less-developed countries to major medical centers in highly developed countries for medical treatment that was

unavailable in their own communities. The recent trend is for people to travel from developed countries to third-

world countries for medical treatments because of cost consideration, though the traditional pattern still continues.

Health tourism is a wider term for travels that focus on medical treatments and the utilization of healthcare

services. It spans a wide field of health-oriented tourism ranging from preventive and health-conductive to

rehabilitation and curative forms of travel; the latter being commonly referred to as Medical tourism. India is a

leading player in the medical tourism/healthcare facilitation industry. It is increasingly emerging as the destination of choice for a wide range of medical procedures. This article examines the emerging of medical tourism in India

and what challenges it’s faced in the context of globalization. How these could be overcome by enhancing the

facilities of medical tourism.

Keywords: [Ayurveda, Medical Tourism, Naturopathy, Siddha, Unani, Yoga]

Introduction

“Tourism is like a bridge. It connects our countries and it can connect people to each other”. -

Karen Che

Medical Tourism can be broadly defined as provision of cost effective‖ private medical care in

collaboration with the tourism industry for patients needing surgical and other forms of

specialized treatment. This process is being facilitated by the corporate sector involved in

medical care as well as the tourism industry, both private and public (Sankaranarayanan, 2005).

Tourism in reality is not an industry but an activity. Tourism over the years has cropped up to be

the world‘s largest and fastest growing industry. It is a major phenomenon of the modern society.

Tourism development is perceived by almost all countries of the world as a potent ingredient in

the economic development strategies. It is considered as a quick and easy means to economic

development. Medical tourism is a new concept where two important service industries are

joining to attract people who seek healthcare services located

beyond the geographical territory of their country. It provides state of the art private medical care

in collaboration with tourism industry to patients from other countries. Medical tourism is

becoming a popular option for tourists across the globe. It encompasses primarily and

predominantly biomedical procedures, combined with travel and tourism. The term medical

tourism has been coined by travel agencies and the mass media to describe the rapidly growing

practice of travelling across international borders to obtain hi-tech medical care. Various

countries like Thailand, Malaysia, India, etc are promoting medical tourism aggressively. The

key competitive advantages of India in medical tourism stem from the following: low cost


IJBMR, 9(1), 2019 Page 85

advantage, strong reputation in the advanced healthcare segment (cardiovascular surgery, organ

transplants, eye surgery etc.) and the diversity of tourist destinations available in the country.

The key concerns facing the industry include: absence of government initiative, lack of a

coordinated effort to promote the industry, no accreditation mechanism for hospitals and the lack

of uniform pricing policies and standards across hospitals.

Nowadays, a lot of factors draw people towards tourism. The important motivators for travel and

tourism may be cultural, social, interpersonal, physical, religious, and many more and now the

healthcare. Medical Tourism has much scope for development and it can develop certain

localities, states and even countries. A planned and integrated development of medical tourism

can act as a catalyst of the economic development of any country, more so, the developing

country, like India. Karnataka is one of the fastest growing states in India. It is the home to some

of the most high tech industries. Bangalore, in particular, has become the home to some of

India‘s premier hospital establishments. It is booming in terms of IT, BT and now, MT, that is

medical tourism. As Karnataka is endowed with a combination of high – tech super - specialty

hospitals on the one hand, on the other, it has a number of natural beauty spots. Further, the air

conditioned weather of Bangalore suits any foreign patient coming here for a treatment. The

surgeries in high tech hospitals are followed by rejuvenation therapies in Ayurveda spas or other

Indian systems of medicine.

Concept of Medical Tourism

Medical Tourism refers to an increasing tendency among people from England, the U.S., and

many other third world countries, where medical services are either very expensive or not

available, to leave their countries in search of more affordable health options, often packaged

with tourist attractions. Health and medical tourism is perceived as one of the fastest growing

segments in marketing Destination India’ today. While this area has so far been relatively

unexplored, we now find that not only the Ministry of Tourism, Government of India, but also

the various state tourism boards and even the private sector consisting of travel agents, tour

operators, hotel companies and other accommodation providers are all eying health and medical

tourism as a segment with tremendous potential for future growth (Fernandes, 2003). The service

sector is playing an ever increasing role in theglobal economy. One of the most significant

contributors to this growth has been tourism. It is linked with a host of ancillary services such as,

travel and hospitality, good infrastructure in areas like, telecom, financial services, and

entertainment. A host of organizations are involved in promoting tourism today. They are, -

WTTC at a global level, regional associations such as PATA, national tourism promotion boards

and state level tourism development corporations.

Significance of Medical Tourism

Medical tourism is an industry which combines healthcare services attached with tourist services

for the foreign medical tourists. Patients from one country travel to some other country seeking

specialized health services. Their travel is often combined with leisure and tourism. One of the


IJBMR, 9(1), 2019 Page 86

major impacts of the New Economic Policy of 1991 on the Indian economy has been the

globalization of healthcare services. Since 1995 many foreign nationals are travelling to India to

seek quality healthcare facilities at low costs. Hence, India has become the destination for

medical tourism not only for medical tourists from neighboring countries, but also for patients

from Europe, USA, Australia, Africa and Arab countries.

Medical Tourism, is believed to become a major driver of economic growth in India, as first

world patients, driven out of their own systems by high costs and crowded conditions, look for

cheaper and better options for medical care (Hasan, 2003). India has proved itself to be a major

destination for health tourism, healthcare outsourcing and medical back office support. Main

medical destinations for patients from the US, UK, Canada and other European countries are

India, China, Taiwan, Thailand, Singapore and Malaysia. India is a leading player in the medical

tourist/healthcare Facilitation industry. It is increasingly emerging as the destination of choice

for a wide range of medical procedures.

Growth of Medical Tourism in India

In India, the rate of growth of Medical Tourism is tremendous compared to other Asian

countries. A combination of three vital factors quality, availability and cost has been

instrumental in kindling the unimaginable growth of this sector in our country (Shankari, 2007).

According to a study conducted by Confederation of Indian Industry and McKinsey in 2004,

some 150,000 foreigners visited India for treatment, with the number rising by 15 % a year

(RNCOS, 2003). India has emerged as the second fastest growing (8.8%) tourism economy in

the world over 2005-14 (World Travel & Tourism, 2004). There has been a growth of more than

13% in foreign tourist arrivals at 3.9 million during 2005, up from 3.4 million foreign tourists

who visited India during previous year. Foreign exchange earnings from foreign tourists were up

by more than 20% at $5,730.86 million in 2005, up from $ 4,769 million earned the previous

year.

There are numerous advantages of going to India for treatment. Some of the advantages of going

to India for medical treatment are:

Advantages of going to India for Medical tourism

Internationally accredited medical facilities using the latest technologies

Highly qualified Physicians/Surgeons and hospital support staff

Significant cost savings compared to domestic private healthcare

Medical treatment costs in India are lower by at least 60-80% when compared to similar

procedures in North America and the UK

No Wait Lists

Dedicated and Fluent English speaking staff

India is among the top 10 list of providing first world class medical procedures and state

of the art facilities


IJBMR, 9(1), 2019 Page 87

Options for private room, translator, private chef, dedicated staff during your stay and

many other tailor made services

India is rich heritage culture that makes sound combination for the medical tourists with a

holiday/business trip

Information and live chats availability through internet

India has a very old civilization of more than 5000 years and is known for its cultural and

religious diversities with diverse geographical landmarks. In India, according to the famous

words “Atithi Devo Bhava” refers tourists are treated as God. In India, in addition to existence

of modern medicine, indigenous or traditional medical practitioners continue to practice

throughout the country. Popular indigenous healthcare traditions include Ayurveda, Siddha,

Unani, Naturopathy, and Yoga. Ayurveda provides a complete system of preventive medicine

and healthcare, which has been proven as its effectiveness over a long period in India. The

science of Ayurveda is based on the knowledge of the human constitution. If every individual

knows his or her own constitution, they can understand what constitutes a good diet and lifestyle

for themselves. The five great elements, viz., ether, air, fire, water and earth are manifested into

the three Dashas or biological organizations known as Vata, Pitta and Kapha. These biological

organizations are used by an individual to gain a full understanding of all aspects of body

functions, in order to establish the harmonious balance required for a healthy existence.

Ayurveda is based on natural herbs, which gives distinct advantage. The Siddha system defines

disease as the condition in which the normal equilibrium of the five elements in human beings is

lost resulting in different forms of discomfort. The diagnostic methods in Siddha medical system

are based more on the clinical acumen of the physician after observation of the patient, pulse and

diagnosis and clinical history. Unani system of medicine believes that the body is made up of

four basic elements viz., earth, air, water and fire, which have different temperaments i.e. cold,

hot, wet and dry. After mixing and interaction of four elements a new compound having new

temperament comes into existence i.e. hot-wet, hot-dry, cold-wet and cold-dry. Unani system of

medicine believes in promotion of health, prevention of diseases and cure.

Naturopathy has several references in the Vedas and other ancient texts, which indicate that these

methods were widely practiced in ancient India. Naturopathy believes that the human body

possesses inherent self-constructing and self-healing powers. Naturopathy differs slightly with

other systems of medicine, as it does not believe in the specific cause of disease and its specific

treatment but takes into account the totality of factors responsible for diseases such as one’s

unnatural habits in living, thinking, working, sleeping, or relaxation, and the environmental

factors that disturb the normal functioning of the body.

Yoga is a science as well an art of healthy living physically, mentally, morally and spiritually.

Yoga is believed to be founded by saints and sages of India several thousand years ago. Yoga has

its origin in the Vedas, and its philosophy is an art and science of living in tune with the

universe. Yoga, the art and science of maintaining physical and mental well-being, has its origin

in India. It is an instrument to self-evolvement and enlightenment, through physical and mental


IJBMR, 9(1), 2019 Page 88

well-being. Various Yogic postures gently massage internal vital organs, keeping them in perfect

condition. Cholesterol levels are kept in check and the blood pressure is normalized. This

internal harmony cleanses and detoxifies the body and boosts the immune system. All these

traditional healthcare systems are attracting national and international patients, and generate

tourism flows.

Major Treatment Attracting Foreign Medical Tourists to India

Bone marrow transplant

Cosmetic Surgery

Dialysis and Kidney Transplant

Gynecology& Obstetrics

Joint Replacement Surgery

Neurosurgery & Trauma Surgery

Osteoporosis

Preventive Health Care

Refractive Surgery

Vascular Surgery

Cardiac Care

Nuclear Medicine

Urology

Eye Surgery

Dental Implant

Medical tourism in India holds great promise as an industry for the near future. Its contribution

to the revenues of private healthcare organizations and GDP is increasing steadily. However, a

focused strategic framework needs to be put in place in order to tap foreign medical tourists.

Medical tourism services – a term used to define the influx of foreign patients for health and

medical care packaged with tourism; are gaining momentum across countries such as Australia,

Switzerland, Germany, Canada, Cuba, Argentina, Malaysia, Singapore, Thailand and Indonesia.

Present Scenario of Medical Tourism In India

Today, medical tourism sector in India is witnessed a sudden boom in past few years. Foreign

tourist arrival in India is growing every year. The FTAs in India continue to grow, according to

ministry of tourism the total Foreign Exchange Earning (FEEs) through tourism during 2015,

2016 and 2017 were Rs.1,35,193 crore, Rs. 154,146 crore and Rs. 1,80,379 crore (provisional),

respectively. The growth rate of FTAs in India is registered as below:


IJBMR, 9(1), 2019 Page 89

Year Foreign Tourist Arrival

(in millions)

FTAs in percentage

2013 6.97 5.9

2014 7.68 10.2

2015 8.03 4.5

2016 8.80 9.7

2017 10.18 15.6

India’s medical tourism sector was estimated to be worth us$ 3 billion. It is projected to grow to

$7-8 billion by the year 2020. According to the Confederation of Indian Industries (CII), the

primary reason that attracts medical tourists to India is the cost effectiveness and treatment from

accredited facilities at par with developed countries at much lower cost.

Comparative Rates of Medical Treatment

Medical

procedure in

US $

USA Singapore Poland Turkey Thailand Malaysia UAE India

Heart

bypass

123,000 17,200 14,000 13,9000 15,000 12,000 40,900 7,900

Heart Valve

Replacement

170,000 16,900 19,000 17,200 17,200 13,500 50,600 9,500

Hip

Replacement

40,364 13,900 5,500 13,900 17,000 10,000 46,000 7,020

Knee

Replacement

35,000 16,000 8,200 10,400 14,000 8,000 40,200 9,200

Spinal

Fusion

110,000 12,800 6,200 16,800 9,500 6,000 16,762 10,000

Dental

Implant

2,500 2,700 925 1,100 1,720 1,500 3,000 900

Source: Indian health care services

Above table present the data on the cost of medical procedure in India in relation to other

countries. It can be obtained from the table above.

Quality Service Provider

India has more than 25 hospitals that have been accredited by the Joint Commission

Accreditation for Hospital Organization (JCAHO). That ensures and follows the international

safety standards with state of the art facilities. The American Medical Association has made a

cost comparison study of healthcare in different countries. According to the statistics released by

AMA, a knee replacement surgery would cost $ 40,000in US, $10,000in Thailand and $13,000

in Singapore, while the same surgery would cost the person $8500 in India. That gives India a

certain edge when it comes to reasonable medical treatments. Moreover, Indian doctors are

renowned all over the world for their skills and proficiency. Apart from this, all tourists are


IJBMR, 9(1), 2019 Page 90

treated as God according to the famous shlok “ATITHI DEVO BHAVA” and an equal treatment

and care is provided to all medical tourists.

Top Quality Service Provider hospitals are as follows:

Medanta Hospitals Gurugram, Kokilaben Hospital Mumbai, Hiranandani Hospital Mumbai,

Lilavati Hospital Mumbai, PGIMER Chandigarh, SankaraNethralaya (Eye specialist Chennai),

Tata Memorial Hospital (Cancer Specialist Mumbai), Fortis Hospital New Delhi, Apollo

Hospital New Delhi, AIIMS New Delhi, Columbia Asia Referral Hospital Kolkata, Bangalore,

Gujarat, Punjab, U.P, Maharashtra.

Technological Advancement

Indian hospitals are equipped with the latest technology. Government is facilitating many health

care programs with the support of technology as their backbone. Moreover the government has

built the standard for Electronic Medical Records (EMR). The most popular treatments seeks in

India by medical tourist are Cardiac bypass surgery, eye surgery, bone-marrow transplant, heart

surgery and knee replacement. Every treatment is conducted using the latest technology with

reliability. In addition, Government of India has launched tourist visa on arrival (TVOA) by

Electronic Travel Authorization on 27th November 2014for 43 countries. In this scheme 2968

VOA were issued. This initiative has directly helped to Medical tourists.

Challenges

There are many issues which are constrains factor for the development of medical tourism in

India. They are as follows:

Lack of government support

Lack of uniform medical policies and their complications

Hospitals need to tie-ups with insurance companies

Hospitals infrastructure need to be upgrade as per latest technology

Lack of emphasis on alternative system of Medicine (Yoga and Ayurveda)

Lack of training in hospital middle staff

Ministry of health and Ministry of tourism need to be work together to introduce policies

for Medical tourists

Low coordination with other facilities provider like airline operators and hotel industry

Conclusion

Many foreign medical tourists visit the hospitals like, Narayana Hrudayalaya, Apollo,

Wockhardt, Columbia Asia, Hosmat, Ramaiah Memorial, and Sagar for curative treatments.

They are cardiac, knee replacement, hip surgeries, rhinoplasty, etc. Some hospitals are also

known for cosmetic treatments. On the other hand, there are spas providing holistic, and

Ayurveda treatments like, Ayurveda gram, Jindal centre of Naturopathy, Golden Palms Resort,

and Soukya Spa which offer variety of Ayurveda, siddha, and naturopathy treatments. Number of

foreign medical tourists to India has been continuously increasing from 2000. The literature


IJBMR, 9(1), 2019 Page 91

survey conducted and the primary data collected through various hospital visits reveal that the

most important contributing factors for the growth of medical tourism are, the availability of

world class medical facilities in Indian healthcare organizations, success rate of various

operations, lesser cost of the treatments, and availability of Ayurveda treatments. Medical

tourism as a phenomenon is just over a decade old in India. Yet, with the help of the above

discussed marketing strategies, it can become a very important medical tourism destination,

attracting foreign patients from all over the world. The cost of treatment, excellent climate,

infrastructure, range of medical packages and levels of expertise have all helped to make India

one of the most important medical tourism destinations in the world.

The growth of the medical tourism is difficult to predict due to political circumstances and world

economic. Based on the study it is concluded that medical tourism has shown tremendous

economic growth in the country. The data in the above discussion suggest that Singapore and

UAE where government is promoting medical tourism in the country where as government can

play a role of facility provider to determine which tourism products can be offered to whom.

Indian hospitals are receiving patients from both developed and developing countries who wants

to obtain the comparatively cost effective and high quality medical care in India.

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IJBMR, 9(1), 2019 Page 93

Impact of E-Commerce in Daily Life

Tanvi Jindal Research Scholar, Department of Management, Desh Bhagat University, Mandi Gobindgarh

Abstract India is among the fastest growing economy of the world. E-Commerce has become an important part of daily life.

Accessibility to e-commerce platforms is not a privilege but rather a necessity for most people, particularly in the

urban areas. As in 21st century as internet has become most important, frequently used and most necessary device, it

will surely race to achieve more growth and sales via internet. In India with the digital penetration has increased

significantly, according to statistical data internet use has increased to 429.23 million user in India and is expected to

reach around 830 million by year 2021. There has been significant rise of e-commerce in India. Internet plays an

important role in our daily life. We use internet daily almost for every single work. Before e-commerce buying and

selling were done without internet physically in the markets but after the arrival of e-commerce in India our life has

become more convenient because of its number of advantages. Online shopping is a part of e-commerce which is done mostly by the users due to e-commerce websites in India which allows us to buy and sell the products

according to our choice at affordable price. E-commerce websites have a lot of impacts on different markets and

retailers. In this paper we will discuss about the different markets and retailers and impacts of e-commerce on them.

E-commerce is a great platform not only to develop infrastructure but also increase employment rates in India and

thus overall impact in increasing economic and social growth in Indian economy. E-commerce (electronic

commerce or EC) is the buying and selling of goods and services or transmitting of funds or data, over an electronic

network primarily the internet but also all other activities which are associated with any transaction such as delivery

and payment facilitation.

Keywords: [E-commerce, Economic growth, Business, Traditional Commerce, Technologies, Electronic data]

Introduction

Electronic commerce or e-commerce has been defined as the ability to perform transactions

involving the exchange of goods or services between two or more parties using electronic tools

and techniques. The explosion of E-commerce has created new phenomena in our lifestyle

especially in shopping activities. Consumers can easily but products or services like magazines

and airlines tickets via internet.

Besides the earlier definition by Yonah (1997) in the paper, National Office for the information

Economy defines e-commerce as type of business transaction or interaction in which the

participants prepare or conduct business electronically. This covers the wide range of activities

ranging from use of electronic mail (e-mail) to internet based sales and transactions and web

based marketing. Placing “e” in front of any process or function seemed to be the magic

prescription for never ending story of success and rapid returns for enterprises. E-business, e-

procurement, e-sales, e-payment, e-banking, e-CRM, e-CAD, e-delivery are just a few. Internet,

for example is becoming one of the most popular medium in transmitting various data. Users can

find any kind of information within a shorter time compared with conventional method that

consumes more time. E-commerce is buying and selling of goods and services over the internet.

Before e-commerce buying and selling were done without internet physically in the markets but

after the arrival of e-commerce in India our life has become more convenient because of its

number of advantages. The advantages offered by e-commerce are online shopping of anything

at any time and at any place, customers can find the products on e-commerce websites which is


IJBMR, 9(1), 2019 Page 94

no available in physical markets, it reduces cost and time, without stepping out from home we

can get our product at home.

Different Types of E-Commerce

The major types of E-Commerce are:

Business –to- Business (B2B): B2B e-commerce is simply defined as e-commerce between

companies. This is the type of e-commerce that deals with relationships between and among

businesses. About 80 per cent of e-commerce is of this type and most experts predict that B2B

ecommerce will continue to grow faster than Business to Customer segment.

Business –to- Consumer (B2C): commerce between companies and consumers involves

customers gathering information, purchasing physical goods (i.e. tangibles suchas books or

consumer products) or information goods (or goods of electronic material or digitized content,

such as software or e-books) and for information goods, receiving products over an electronic

network. B2C e-commerce reduces transactions cost (particularly search costs) by increasing

consumer access to information and allowing consumers to find the most competitive price for a

product or device.

Business –to- Government (B2G): Business –to- government e-commerce or B2G is generally

defined as commerce between companies and the public sector. It refers to the use of internet for

public procurement, licensing procedures and other government related operations. This kind of

e-commerce has two features: first, the public sector assumes a pilot/leading role in establishing

e-commerce and second it is assumed that the public sector has the greatest need for making its

procurement system more effective. Web-based purchasing policies increase the transparency of

the procurement process (and reduce the risk of irregularities).

Mobile Commerce (M-Commerce): M-commerce is the buying and selling of goods and

services through wireless technology i.e. hand held devices such as cellular telephones and

personal digital assistants (PDAs). Japan is seen as a global leader in m-commerce. Industries

affected by m-commerce include:

a. Financial services, including mobile banking (when customers use their handheld devices

to access their accounts and pay their bills) as well as brokerage services (in which stock

quotes can be displayed and trading conducted from the same handheld device)

b. Telecommunications, in which service changes, bill payment and account reviews can all

be conducted from the same handheld device

c. Service/retail, as consumers are given the ability to place and pay for orders on the fly.

d. Information services, which include the delivery of entertainment, financial news, sports

and figures and traffic updates to a single mobile device.

E-Commerce in Day to Day Life

It is an electronic business application and involves electronic fund transfer, supply chain

management, online transaction processing, e-marketing, corporate purchasing, value chain

integrations etc. with the onset of information technology the way we do business has changed. It

replaced from paper cheque or money to electronic payment system, from paper or postal invoice

to electronic invoice and from traditional commerce to electronic commerce etc. Flipkart.com


IJBMR, 9(1), 2019 Page 95

and myntra.com were the most preferred choice of online retailers mentioned by the students to

shop from the online stores. Tickets, electronic goods accessories, apparels, books, electronic

goods, footwear, instant recharge of cell phone, gifting items were the major categories of

products / services bought by most of the students. Cash on delivery was the most preferred

mode of payment stated by the students while doing online shopping. In study conducted in India

on “Antecedents of Online Shopping Behavior in India: An Examination” found that Indian

student’s intention to purchase online is influenced by utilitarian value, attitude toward online

shopping, availability of information and hedonic values. Satisfaction, trust and commitment

were found to have significant impact on student loyalty towards online shopping in the study

carried out in Indonesia.

Impact of E-Commerce in Accounting Operations

Given the e-commerce process in most of the cases are found these specific types of income and

expenses: Revenue from sale customers; mailing services revenues; incomes from bank interests;

expenses for procurement of Information systems; expenses for creating a website presentation,

expenditure on goods; expenditure on packaging; advertising expenses; expenses for electronic

payment protocol; expenses for obtaining electronic signatures. It is a system that includes the

transactions that focus on the purchase and sale of goods but also transactions underlying income

generation such as creating demand for those goods and services and facilitating communication

between business partners. The expansion of e-commerce has generated a series of problems and

risks regarding taxation and other accounting of such operations. Another study analyzed the

potential development of e-commerce examining the influence of product type on consumer

behavior in internet shopping partners.

Impact of E-Commerce on Employment

In developed countries new generations are growing buying goods online and they are moving in

their prime spending years. In developing and less developed countries, incomes are rising and

the spread of mobile phones will likely bring more consumers online. What are the effects on

employment? Is online retailing creating enough jobs to offset the job losses in the traditional

retail sector? Different positions arise. According to Michael Mandel of the Progressive Policy

Institute between 2007 and 2017 the number of retail jobs shrank by 140,000 while those in e-

commerce and warehousing rose by about 400,000. Martin Ford points out in his book three

major forces will shape unemployment in the retail sector such as the disruption of the industry

by online retailers (e.g. Amazon, ebay, Netflix), the growth of fully automated self- service retail

sector (intelligent vending machines and kiosk), the introduction of increased automation and

robotics into stores (and warehouses). These forces will create jobs and trigger a shift in the

employment from traditional retail jobs warehouses, delivery, programming and technical

maintenance. However, this is not straight forward; workers may not have the competences or

skills to adapt to these changes.

Impact of E-Commerce on Business


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E-Commerce is changing manufacturing systems from mass production to demand-driven and

possibly customized, just-in-time manufacturing. Furthermore, the production systems are

integrated with finance, marketing and other functional systems as well as with business partners

and customers. Using web-based ERP systems, orders that are taken from customers can be

directed to designers and to the production floor within seconds. Production cycle time is cut by

50 per cent or more in many cases, especially when production is done in a different country

from where the designers and engineers are located. Companies like IBM, General Motors, are

assembling products for which the components are manufactured in many locations (13). Sub-

assemblers gather materials and parts from their vendors and they may use one or more tiers of

manufacturers. Communication, collaboration and coordination become critical in such multitier

systems. Using electronic bidding, assemblers get sub-assemblies 15 per cent to 20 per cent

cheaper than before and 80 per cent faster.

E-Commerce and online shopping in India is getting a noticeable growth as more usage of

internet facilities, high educational standards, changing life style and economical growth of the

country reasons in the demand of e-commerce techniques and tools. Versatile shopping

experience and rapid development of transaction facilities is further boosting opportunities for

the remaining market segments. The biggest advantage of e-commerce is the ability to provide

secure shopping transactions via internet and coupled with almost instant verification and

validation of credit card transactions. E- Commerce also enables consumers and companies to

gain access to worldwide markets and also to improve the level of customer service, speed the

flow of goods and information, reduce transaction costs etc. the developing countries face a

number of challenges in utilizing the benefits in raising incomes and trade flows in the area of e-

commerce.

Conclusion

From the above discussion we can easily put-forth that commerce has gone through

revolutionary changes to keep pace with changing world. In this wake, it has traveled phase of

traditional commerce to e-commerce. E-commerce had played game changing role for businesses

around the world. According to survey after demonetization, role of cashless economy in India

has increased significantly, thus the role of internet also likewise other such government policies

have also had a major impact. A lot have been done and a lot has to be done when it comes to e-

commerce industry in India. It provides convenience to customers and allows the enterprise to

expand their business over internet. E-Commerce has good impact on markets like reduce the

cost of advertisements as many customers can attract through internet, new brands can be

developed, can maintain a good relationship with customers and can make customized products

according to customer’s needs. But e-commerce has bad impact on offline retailers because

customers buys on low price from online shops due to which they also have to lower their price

and does not get any profit, retailers cannot maintain a large stock like online shops have stores

because it will cost a huge loss to them. They have to spend more money in offline

advertisements to attract customers. Along with the impacts e-commerce also offers some


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limitations in terms of markets and retailers that is website cost, to create and maintain a website

a lot of money is required; infrastructure cost, to fulfill the orders online retailers have to

maintain a large stock in a big warehouse which costs a lot; security and fraud, due to popularity

of online shops criminal elements are also attracted to them who can hack the personal

information and can misuse them; customer trust, it is difficult for customers to trust a new brand

without looking, touching and face-to-face interaction.

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