Customer Satisfaction Towards Banking Services of Small Finance Banks: The Role of Service Quality Dimensions and Customer Loyalty

Abstract

This study aims to validate a model of customer satisfaction (CS), customer loyalty (CL), service quality (SQ), assurance (ASSU), empathy (EMP), reliability (REL), responsiveness (RESP)and tangibility (TAN) among customers of Small Finance Banks in Saharanpur District, Uttar Pradesh, India. The study also examines the mediating role of customer satisfaction between service quality and customer loyalty. A total of 857 responses were analyzed using SmartPLS. The findings reveal that assurance, empathy, reliability, responsiveness and tangibility significantly and positively influence service quality. Further, service quality significantly affects customer satisfaction and customer loyalty, while customer satisfaction also positively influences customer loyalty. Tangibility emerged as the strongest predictor of service quality. The study highlights the growing importance of customer-oriented banking services in the rural and semi-urban financial sector of Saharanpur District. The findings provide useful implications for policymakers and bank managers to strengthen customer-centric practices, improve trust, enhance retention and support the long-term sustainability of Small Finance Banks.