All banks in India offer similar services but are different in terms of service quality. This paper analyzes the literature regarding service quality and customer satisfaction in the retail banking industry, and explains the relationship between service quality and customer satisfaction and their effect. The findings suggest that improved service quality should be adopted to give maximum satisfaction to the customer. The paper also contributes knowledge and background for banks to apply these findings to better shape and focus their position in the market and also to provide maximum satisfaction to the customer.