Role of Switching Barriers as an Antecedent of Customer Loyalty in Private and Public Banks of India

Authors

  • Michael Job Thomas Corresponding author. Karunya Institute of Technology and Sciences, Coimbatore, Tamil Nadu, India.
  • J Clement Sudhahar Karunya Institute of Technology and Sciences, Coimbatore, Tamil Nadu, India.
  • Asi Vasu Deva Reddy VIT Business School, Vellore Institute of Technology, Chennai, Tamil Nadu, India.

DOI:

https://doi.org/10.22452/IJIE.vol18no1.2

Keywords:

Switching barriers, Customer loyalty, Switching costs, Private sector banks, Public sector banks

Abstract

Losing customers negatively impacts a bank’s profits and its market share.
Customer retention by inducing loyalty is a top priority in the fiercely competitive
Indian banking industry. The objective of the present study is to find out how switching
barriers affect customer loyalty in private and public sector banks in the wake of bank
privatisation in India. Data was collected by means of a questionnaire from a sample of
609 bank customers in India. The collected data was analysed using descriptive analysis,
comparison of means, ANOVA and regression. Comparison of means and ANOVA were
used to find if there was considerable difference in customer loyalty and perception of
the switching barrier variables for private and public sector banks and among male and
female bank customers. Based on regression, the effect of switching barriers on customer
loyalty for private and public sector banks were determined. It was found that confidence
benefits played a significant role in determining customer loyalty in private and public
sector banks. For public sector banks, special treatment benefits and confidence benefits
are found to play a considerable role in determining customer loyalty. It also shows
that if suitable attractive alternatives are available, switching is a possibility for public
sector banks. For private sector banks, all dimensions of switching barriers other than the
availability of attractive alternatives considerably impact customer loyalty. This study
affirms previous models showing that all five switching barrier variables affect customer
loyalty of banks. However, the results show that the availability of attractive alternatives
plays an insignificant role for private sector banks, while social benefits and switching costs
play an insignificant role for public sector banks. Moreover, the results also reveal that
female customers tend to be more loyal to their banks compared to their male counterparts.

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Published

2026-01-01

How to Cite

Michael Job Thomas, J Clement Sudhahar, & Asi Vasu Deva Reddy. (2026). Role of Switching Barriers as an Antecedent of Customer Loyalty in Private and Public Banks of India. Institutions and Economies, 18(1), 29–54. https://doi.org/10.22452/IJIE.vol18no1.2

Issue

Volume 18, No 1 (2026)

Section

Articles

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