ATM Withdrawal Restriction and Customer Retention: A Case with Students and Pensioners

Objectives: The present study seeks to examine the perception of the graduate students and pensioners of some selected localities of Kolkata about the importance of ATMs as a branch surrogate, impact of the ceiling on withdrawals from ATMs, and the strategies to win over the capping for the customers as well as for the banks to retain them.

Participants and Data collection: It obtained primary data from 200 respondents consisting of 140 graduate students and 60 pensioners using different non-probability sampling techniques through schedule and personal interviews.

Research Methods: Different statistical tests like factor analysis, Mann Whitney U test, students't-test, regression analysis, and descriptive statistics were performed to assess support for the hypotheses. The reliability of the questions and sample adequacy test was also carried out. Through factor analysis, five major factors viz. perceptions about ATM- an avatar for banks, customers' satisfaction in ATM services, customers' repercussion on capping, financial planning for withdrawals, and strategies for customers to avoid charges and for banks to retain them were extracted.

Results: The results of the study suggest that youth prefer to use ATMs which has become indispensable and provide diversified financial services that leads tocustomers' satisfaction; but withdrawing now requires some planning as customers need to visit branches to avoid fees. To retain the customers the banks should encourage the use of more electronic cards and net banking; should not charge for withdrawing own funds, allow them to access even the non-home branch ATMs close to the their locality, should reduce the minimum average floor balance to enjoy free unlimited access of home bank ATMs and keep currency of higher denomination to reduce the number of transactions.