Today, information technology (IT) has become a key element in economic development and a backbone of knowledge based economies in terms of operations, quality delivery of services and productivity of services. Therefore, taking advantage of information technologies (IT) is an increasing challenge for developing countries. The purpose of the paper is to examine the impact of information technology on operational activities of banks, operational efficiency of employees and to acquaint with the level of satisfaction among the customers and employees. Data is collected from different customers and selected employees working in Indian banks. It is noticed that in improving customer services, management information system and ensuring high productivity, technology orientation has become inevitable. Benefits of information technology in banking are: increases operational efficiency, productivity and profitability, offering the superior quality customer services, multi-channel, real-time transaction processing, ability to better cross selling of products and services, improved management information system, management and accountability, efficient nonperforming assets (NPA) and risk/credit management and minimum transaction costs. Heavy investments in IT have been made by the banks in the expectation of improvement in their performance. But improvement in the performance depends upon, differences in the deployment, use and effectiveness of IT.