Employee empowerment is a talked about concept for many years. Empowerment is not a verb; it is more a state of mind and way of working. During the last two decades among the gigantic concepts and strategies, empowerment has evidently emerged as a winner. Banking sector is highly service oriented and its versatile manpower is in direct and uninterrupted correspondence with the customers. This necessitated the importance of employee empowerment in the banking sector which enhanced customer and employee satisfaction in the long run. The present study is aimed at identifying the various tools of empowerment used in banking industry and to ascertain the effect of empowerment on the role efficacy of the employees. The public sector banking giant SBI and the private sector banking leader HDFC have been considered in this study. This study concentrates on five major perspectives of employee empowerment namely job autonomy, communication, training, rewards and organizational culture and their impact on employee effectiveness.