ABSTRACT : The purpose of this research is to evaluate the quality of the retail banking services provided by commercial banks operating in Bahrain from the standpoint of the banks personal customers. The commercial banks in Bahrain are the focal point of the financial system, contributing about two thirds of the GNP produced by the financial sector. The commercial banking market comprised two broad market segments, namely retail banking and wholesale banking. The scope of this research is restricted to the evaluation of the quality of retail banking services in the commercial banks. The research consists of two parts, a theory base and an empirical investigation. The theory base encompasses contemporary concepts of retail banking that were sighted when surveying relevant available literature. In this part, the concept of retailing was discussed and modern retailing trends were identified, followed by an analysis of retail banking market and its major segments in terms of size and growth potential. Subsequently, the main types of retail banking products were presented, and the relationship between technology and retail banking was tackled. Finally, the invisible, often neglected, dimension of banking was discussed, that is the concept of the service quality. The empirical study starts with looking for a research model to be used for measuring the perceptions of retail customers as to the level of service quality in the commercial banks. After considering several models, the conceptual model of Parasuraman, Zeithaml, and Berry was selected. The conceptual model stipulates ten service attributes for assessing the level of service quality in any service firm: (1) access to the firm, (2) communication with customers, (3) employees competence, (4) employees courtesy, (5) firm's credibility, (6) firm's reliability, (7) employees responsiveness, (8) customers' perceptions of security, (9) firm's tangible facilities, and (10) firm's ability to understand the customers. After selecting research model, ten research hypotheses were formulated, corresponding to the ten service attributes determined by research model. The main components of the hypotheses were identified and subsequently used to design research questionnaire. The questionnaire was distributed to a randomly selected sample comprised (75) Bahraini Nationals, of which (55) completed and returned the questionnaire. The collected data were then classified and used to test the research hypotheses. Nine of the ten hypotheses were accepted and one was rejected. The results confirmed that the retail customers do not perceive a high level of service quality in terms of nine of the ten service attributes suggested by research model. To examine the validity of these results, the sample was broken down to five pairs of groups on the basis of certain socio-demographic characteristics. The groups were then subjected to Mann-Whitney U test, and the outcome was comparable to the results reached earlier. Finally, and in view of research results, certain recommendations were made to improve the standard of banking services. However, it was concluded that the recommended changes involve costs that are to do with scale economies, and for these costs to be justified, and the scale economies to be satisfied, the commercial banks operating in Bahrain must be willing to consolidate.