The banking sector occupies a central position in the economic development of Bihar because it connects household savings with productive investment, provides credit to agriculture and small businesses, supports government welfare programmes, and increasingly delivers financial services through digital channels. Within this banking system, public sector banks and private sector banks operate under the same regulatory framework but differ considerably in ownership, organizational structure, business strategies, technology adoption, customer service practices and geographical expansion. The present study makes a comparative assessment of the performance of public sector banks and private sector banks operating in Bihar during the period 2019–2025. The study is based primarily on secondary data obtained from the Reserve Bank of India (RBI), State Level Bankers’ Committee (SLBC), annual reports of banks, government publications and relevant academic and institutional literature. The comparison considers multiple dimensions of banking performance rather than relying on a single indicator. These dimensions include deposit mobilisation, advances and credit delivery, credit-deposit ratio, profitability, asset quality, priority-sector lending, agricultural and MSME credit, branch expansion, financial inclusion, digital banking, customer service and operational efficiency. The study also considers the effects of the COVID-19 period and the subsequent recovery of the banking sector. The evidence indicates that public sector banks continue to have a dominant institutional role in Bihar because of their extensive branch network, historical presence, government-linked programmes, prioritysector responsibilities and reach among rural and financially underserved populations. At the same time, private sector banks have demonstrated considerable strengths in technology-driven services, digital delivery, customer-oriented products, operational flexibility and expansion in commercially attractive locations. Data reported by the SLBC show that as of 31 March 2025, public sector banks accounted for approximately ₹1,83,215 crore of outstanding advances in Bihar, while private sector banks accounted for approximately ₹85,497 crore. Public sector banks also accounted for a substantial share of priority-sector advances, agricultural lending and MSME credit.  The findings suggest that neither ownership model can be considered universally superior. Public sector banks remain particularly important for financial inclusion, rural outreach and developmental banking, whereas private sector banks show strong performance in technology, service innovation and selected efficiency dimensions. The paper concludes that the future of banking in Bihar depends less on choosing between public and private ownership and more on improving efficiency, digital accessibility, customer protection, credit quality and inclusive banking across both segments.