Influence Of Customers’ Corporate Social Responsibility (CSR) Perception On Satisfaction And Loyalty In Banking Sector

Abstract

The Companies Act, 2013 mandated all the Indian companies with atleast INR 5 crores net profit or INR 1000 crores turnover or INR 500 crores net worth to spend 2% of their three year average annual net profit on Corporate Social Responsibility (CSR) activities in each financial year. Over the years, banks have increased their spending on CSR activities. Awareness and perception of customers play an important role in the effective implementation of CSR initiatives of banks and is a pre-condition of consumer rewarding the business for ethical behaviour. This paper aims to study the influence of customer perception of CSR on customer satisfaction and customer loyalty. Using SEM AMOS 21, the present study employs convenience sampling with a sample of 170 banking customers of select banks in Manipur. The study, on confirming the reliability of the data, conducted Confirmatory Factor Analysis (CFA) to validate the theoretical findings of prior research studies carried out in other developing economies. The findings show that there is a positive correlation between Customer Perception of CSR and customer satisfaction, but customer satisfaction has no significant impact on customer loyalty. Further, this study also highlights the importance of customer awareness of CSR initiatives undertaken by banks, which influences and shapes their overall perception on CSR and the bank.