Abstract This study was designed to assess the dimension of service quality and its effect on

customer satisfaction taking a case to Ethiopian Private Banks which gives special attention to
newly opened banks.Both descriptive and explanatory research design were employed by using
quantitative research approach to assess the service quality dimensions and their impacts on
customer satisfaction. The researcher used questionnaire method to gather the primary data
from the customers’ of the two main branches of the selected private banks. The independent
variable that service quality of the banks is measured by using the five service quality
dimensions including tangibility, reliability, responsibility, assurance and empathy and while
customer satisfaction is considered for dependent variable. the regression output also briefly
show that there was a statistically weighty link between service quality dimensions and
customer satisfaction which is more sustained by R2 result explaining that the dependent
variable is explained more than 80% by the five service quality dimensions. Assurance
dimension takes the highest fraction in influencing customer satisfaction followed by reliability,
tangibility, responsiveness and empathy. As customer expectations are changing over time,
bank managers are advised to measure their customer expectation against the actual
performance regularly and handle complaints timely and effectively.