Why Indian Consumers Go Green: Satisfaction Drives Green Banking Adoption, Study Finds

Green banking, the bundle of paperless, low-carbon and environmentally oriented financial services now offered by banks around the world, has moved from a marketing novelty to a pillar of sustainable finance policy. In India, the Reserve Bank of India’s Green Finance Framework has given the sector fresh momentum, yet a stubborn question has remained: what actually makes an Indian consumer sign up for green banking services? A new study from researchers at Ganpat University and Parul University in Gujarat offers one of the most detailed answers to date, and its headline finding is strikingly simple. The single strongest driver of green banking adoption is not environmental idealism, perceived usefulness of the technology, or even trust in the bank. It is customer satisfaction.

The research, published in Discover Psychology, was led by Riketa Parmar and Vipul Patel of Ganpat University’s V. M. Patel College of Management Studies, together with Mruga H. Mehta and Jigneshkumar P. Desai of Parul University. The team set out to build and test what they call the Green Banking Consumer Adoption Model for India, or GB-CAM-India. Rather than relying on a single behavioural theory, the model deliberately stitches together three of the most widely used frameworks in consumer and environmental psychology: the Technology Acceptance Model, the Theory of Planned Behaviour, and the Value-Belief-Norm theory. To these it adds constructs tailored to the Indian market, including perceived trust, perceived risk and customer satisfaction.

The logic behind the integration is worth unpacking. The Technology Acceptance Model, developed originally to explain how people come to use new technologies, focuses on two perceptions: that a system is useful and that it is easy to use. The Theory of Planned Behaviour adds the role of attitudes, subjective norms, meaning the social pressure we feel from people around us, and perceived behavioural control, our sense that we are capable of performing the behaviour. The Value-Belief-Norm theory, rooted in environmental sociology, traces pro-environmental action back through a chain of personal values, ecological beliefs and the activation of moral norms. Green banking sits at the intersection of all three: it is a technology, a planned consumer behaviour and an environmentally significant act at once, which is precisely why the authors argued that no single theory could capture the whole picture.

To test the model empirically, the researchers collected primary survey data from 760 respondents spread across five regions of Gujarat, a western Indian state with a large and diverse banking population. For each theoretical construct, they computed composite, or summed, scale scores and then subjected the data to a battery of statistical checks. Exploratory factor analysis was used to confirm that the survey items clustered into the intended dimensions, and reliability analysis confirmed internal consistency. The psychometric credentials of the measures were strong: the Kaiser-Meyer-Olkin measure of sampling adequacy reached 0.906, a value well above the conventional 0.6 threshold, every composite reliability value was at least 0.829, and all average variance extracted values were at least 0.545, calculated from the standardised loadings produced by the factor analysis. In plain terms, the survey instruments measured what they claimed to measure, and they did so consistently.

With the constructs validated, the team turned to multiple regression to test eight hypotheses linking the predictors to green banking adoption behaviour. The model performed respectably, explaining 46.8 percent of the variance in adoption behaviour, with an F-statistic of 82.51 on 8 and 751 degrees of freedom and a p-value below 0.001. Customer satisfaction dominated the results, with a standardised beta of 0.464, far ahead of any other predictor. Perceived ease of use came second at 0.193, followed by social influence at 0.083, both also significant at the 0.001 level. Perceived risk worked in the opposite direction, exerting a significant negative effect with a beta of minus 0.085 and a p-value of 0.002. The message for banks is that making green services feel safe, simple and satisfying matters more than preaching their environmental virtues.

One of the most technically interesting parts of the study concerns how satisfaction connects upstream perceptions to downstream behaviour. Using bootstrapped indirect-effect tests with 5,000 resamples and bias-corrected 95 percent confidence intervals, the researchers found that customer satisfaction carries significant indirect effects from perceived usefulness, perceived trust and environmental attitude through to adoption behaviour. Crucially, the corresponding direct paths from those three constructs to adoption were statistically nonsignificant. That pattern means satisfaction does not merely supplement these influences; it is the channel through which they operate. The authors are careful with terminology here, characterising these as indirect-only effects rather than partial mediation, a distinction that matters for how future researchers model the pathway.

The study also probed how the satisfaction-adoption relationship varies across the population. Income level emerged as a significant moderator of that path: higher-income consumers showed reduced sensitivity to satisfaction signals when deciding whether to adopt green banking. In other words, for wealthier customers, a pleasant service experience moves the adoption needle less than it does for lower-income consumers, a finding with clear implications for how banks segment their green marketing. The researchers additionally observed that mean adoption scores differed significantly across Gujarat’s five regions, with an F-statistic of 9.88 on 4 and 755 degrees of freedom and a p-value below 0.001. They are careful to note, however, that this is a group-difference finding rather than a formally tested regional moderation effect, an honest caveat that reflects the exploratory, composite-score design of the analysis.

The practical implications ripple outward from these statistics. For banks, the results suggest that investments in service quality, complaint resolution and overall customer experience may do more to accelerate green banking uptake than awareness campaigns alone, because satisfaction is the conduit through which usefulness, trust and environmental attitudes are converted into action. Reducing perceived risk, whether fear of fraud in digital channels or uncertainty about green products, should also pay dividends, given its significant negative coefficient. For policymakers working under the Reserve Bank of India’s Green Finance Framework, the regional differences in adoption scores across Gujarat hint that a one-size-fits-all national rollout may underperform, and that income-sensitive design could matter, since wealthier consumers respond differently to satisfaction cues than lower-income ones.

The authors are equally candid about the limits of their approach. Because the analysis relied on composite scores, exploratory factor analysis and multiple regression rather than a full structural equation model, the causal architecture of GB-CAM-India remains a proposal awaiting confirmatory testing. They explicitly flag directions for future SEM-based research that could estimate the full path model with latent variables, test the regional moderation hypothesis formally, and extend the sample beyond Gujarat to other Indian states. The survey design is also cross-sectional, so the direction of influence, while theoretically motivated, is inferred rather than observed over time.

Even with those caveats, the study lands at a propitious moment. As India’s financial sector aligns itself with sustainable development goals, understanding the psychology of the consumer becomes as important as the engineering of the green products themselves. What this research demonstrates is that the road to sustainable finance in India runs through the everyday experience of the bank customer: a useful app that is trusted, a service that satisfies, and a social environment that quietly nudges people toward greener choices. If satisfaction is the engine of green banking adoption, then the banks that win India’s sustainable finance transition may be those that treat environmental ambition and customer experience as a single, inseparable project.

Subject of Research: Consumer adoption of green banking services in India, modelled through an integrated TAM-TPB-VBN framework

Article Title: An integrated TAM–TPB–VBN framework with empirical validation from Gujarat for green banking consumer adoption in the Indian market

Article References: Parmar, R., Patel, V., Mehta, M. H., & Desai, J. P. (2026). An integrated TAM–TPB–VBN framework with empirical validation from Gujarat for green banking consumer adoption in the Indian market. Discover Psychology. https://doi.org/10.1007/s44202-026-00883-5

Image Credits: AI Generated

DOI: 10.1007/s44202-026-00883-5

Keywords: green banking, consumer adoption, Technology Acceptance Model, Theory of Planned Behaviour, Value-Belief-Norm theory, India, Gujarat, customer satisfaction, sustainable finance, perceived risk, social influence, survey research