REASONS WHY THE CUSTOMERS DISSOLVE THEIR BANKING RELATIONSHIP FROM EXISTING BANKS

The purpose of the study is to find out the reasons of customer relationship dissolution in banking industry. A structured questionnaire was distributed to banking customers based on demographics (gender, age, marital status, education, occupation and, income level) in National Capital Territory. Data was successfully collected from 500 respondents who have either saving account or current account or both. Respondents' opinion on 21 statements was obtained regarding their intension to dissolve their banking relationship with a particular bank. Principal Component Analysis with VERIMAX rotation on these 21 items was applied to extract the reasons behind dissolving banking relationship by customers. The study found that though there are various reasons why a customer dissolves its relationship with a particular bank but broadly these can be grouped into three categories includes Service Quality and Commitment; Price and Communication; and Involuntary Dissolution. Out of these three reasons, Service Quality and Commitment seems to be most important reason of dissolving a banking relationship.