Although the rate of interest on deposit in development banks are higher than the rate of interest on deposits in commercial banks people still prefer to deposit their amount in commercial banks in spite of the lower interest rate. Explain
Ans-
1 Interest rate is not sole factor that attract the customer towards bank. Its the wide array of services who provides under a single roof. Commercial banks have such diversified product line which easily attract customers.
2. Since the paid up capitalof commercial bank is large(800 arab vs 500 arab) meaning commercial bank has highest core capital and can absorb the loss in greater extent. This develop the feeling of assurance of customer as they can perform transaction without fear of making deposit.
3 Commercial banks provide services through digital state of art technology in more advanced and secure manner. This attaract the customer to deposit money as they can use their deposit
4. Commercial banks justify the saying " the more you show , more you grow" . Commercial banks uses heavy advertising and promotional campaign to share its offers and product information. Such heavy promotion ensure the wide access of people in financial products.
5. Commercial banks focsed more on relationship marketing. This build up mutual trust and beliefs between customers and banks.
6. The agency functions of commercial bank like ATM, cheque clearing, debit card, credit card, e banking, c_asba and payment gateway are more rich in terms of features and availability.
7. Complaints, grievance handling, customer dissatisfaction and other issues handling mechanism is more effective in commercial bank. This increases the feeling of belonginess of customers towards bank.
8. Commercial bank focus more on its layout and decorations of office, which is also a magnetic factor to attract customers.
9. Its all about operational efficiency which always please the customers and attract towards bank. Comparatively commercial banks have more resilient resources and advance CBS for increasing operational efficiency.
10. In Nepal, majority people perceived commercial bank as only bank for performing deposit and lending related transactions. This sorts of psychology is developed due to poor financial literacy. They often neglect development bank even if it is in their easy reach.
In conclusion, people in Nepal always prefer commercial bank over development bank to deposit money because of its quality, customizable, diversified services with better customer experience.
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