Significance of Trust and Loyalty During Financial Crisis:A Study on Customer Behavior of Indian Banks

This paper investigates the significance of trust and loyalty during and pre-Global Financial Crisis (GFC). Random sampling method was employed to collect data from 351 customers of Indian banks. The findings indicate that ‘shared value’ and ‘opportunistic behavior’ play dominant roles in determining customer trust than communication. Trust, in turn, acts as a strong moderator to lack of price sensitivity, Investment Intention (II) and Investment Behavior (IB). In this study, level of communication was found inadequate. Inadequate communication was found to impact complaining behavior and word-of-mouth promotion. However, inadequate communication has no impact on the important dimension of customer loyalty even during the crisis, like II and IB. The paper finds its importance with managers and academicians who would be benefited by developing in-depth knowledge about relevance of trust and loyalty during normal and crisis situation. According to the author, no such work has been carried out before.