FACTORS AFFECTING DEPOSITORS’ FIDELITY IN BANKING SECTOR OF DISTRICT PESHAWAR

Abstract

Banks are financial institutions playing key role in the smooth operation of financial sector in any economy. Depositors’ fidelity is a factor vital for the survival of the banking sector, because through it banks not only retain the existing depositors but attract new ones. It is also considered a significant aspect in the formation and preservation of competitive edge in banks. The aim of this study was to detect factors that influence depositor’s fidelity in banking sector of district Peshawar. For this purpose, primary data was collected through structured questionnaire from 400 respondents, using convenient sampling technique. Getting guidance from the past studies, four variables i.e. trust, service quality, depositor’s satisfaction and switching cost, were identified to assess its influence on depositors’ fidelity. The findings of the study indicate that trust, service quality and depositors’ satisfaction have significant impact on depositors’ fidelity, while switching cost has no effect on depositor’s fidelity in the banks located in Peshawar district.