In lives of the customers easier (Otoo, 2016). The

In the age of globalization, accomplishing
the higher level of customer satisfaction is the challenging task especially in
the service sector. In order to face this challenging task, many organizations
have started to improve their service quality (Devkota
& Dahal , 2016). Service quality is one of the serious components in
any service sector because service quality helps to maintain competitive
advantages in the market place. Therefore, service quality is the strategic
tool to reinforce competitive advantages and increase profitability in business
(Tam, 2004).

Service quality is an
assessment of how well a delivered service meets the customers’ expectations.
It is one of the main components to gain competitive advantages and earn profit
in any service sector. It is the tool to attract customers, increase customer
base, retain them and build customer loyalty. So, it plays a vital role in
customer satisfaction and profitability. Thus, the relationship between service
quality and customer satisfaction is crucial in-service sector such as banking.

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Bank is basically a customer
centric service industry. In banking sector, the customers are attracted by the
quality of services offered. For example, the advancement of technology has
helped the banks to introduce services such as internet banking, mobile
banking, ATM (automated teller machine), etc. which have made the lives of the
customers easier (Otoo, 2016). The people want to become clients of the banks which help
them ease their daily activities. With the presence of cut-throat competition
in the banking industry, the banks have to stay ahead of their rivals in order
to earn profits. It can do so by differentiating itself from the competitors by
providing high quality customer service. For this, the banks should know about
the expectations and perception of the customer. Measuring customers’
expectation is the key to be able to serve the customers satisfactorily. On the
other hand, with the better understanding of customers’ perceptions, banks can
determine the actions required to meet the customers’ needs. This helps to
satisfy the customers’ needs which directly impact the overall performance of
the bank (Karim & Chowdhury,2014).
So, customer satisfaction has a significant role in continuity of the financial
institutions and achieving their goals and objectives. The way to keep
customers satisfied in banking industry is by providing high level of service.
Therefore, all banking institutions should be focused on maintaining and
enhancing their service quality in order to satisfy their customers’ needs and

In Nepal, the banking sector
has flourished and has led to establishment of many banks. This has created
more options for customer to enjoy banking facilities. As a result, this sector
has become very competitive and profitable. The banks require to stand out from
the rest to be able to compete properly. Nepalese market scenario is also
changing with time so the customers are ready to pay premium price for
quality.  Thus, in order to attain the competitive
edge and to attract and retain more customers, the banks are focused on
providing better services to the customers which in return will lead to
customer satisfaction.