Objective of the study was to study the factors affecting Customer Satisfaction in Banking Sector of Pakistan and to find the relationship between Service Quality, Customer Satisfaction and Customer Loyalty. Research design of the study is quantitative and surveys research method has been used in it. Data was collected from four different cities: Sahiwal, Arifwala, Okara and Pakpatan. Data has been collected through already tested structured questionnaire from 72 respondents. Results of this study show that there is significant relationship between service quality attributes and customer satisfaction. It also revealed that positive relationship exists between customer satisfaction and customer loyalty. With the help of this study we can conclude that service quality leads to satisfied customers and customer satisfaction leads to customer loyalty. In todays competitive world banks can get competitive advantage by providing superior services to their customers. Key Words: Service Quality, Customer Satisfaction, Customer Loyalty.