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Service quality and customer satisfaction play a vital role in any business. But it is particularly important in emerging markets such as Vietnam which still needs to catch up with western service standards. It is even more important in service industry as it deals with people. Further, local businesses need to compete with foreign businesses due to the Foreign Direct Investments in Vietnam. In this context, the purpose of the article is to test the impact of the five dimensions—tangibility, responsiveness, reliability, assurance and empathy—of the SERVQUAL on customer satisfaction in Vietnamese banking industry. Results of the study indicate that all the five dimensions of service quality significantly impact customer satisfaction. More specifically, Reliability and Empathy most influence the customer satisfaction.