The current competitive and technological driven environment is challenging to a greater extent for the organizations irrespective of sectors and it becomes imperative to enhance the level of engagement of employees at work as it contributes to better organizational performance. Research evidence shows that the employees who are engaged, not only exhibit better productivity but also improved retention with more customer-focused that subsequently contributes positively to innovation and improved performance. Recently, Psychological Capital (PsyCap) is viewed as key drivers for employee engagement. Employees with higher psychological capacities are found to have better engagement and exhibits significant positive influence on workplace outcomes and performance level. Since the banking sector is considered to be the backbone of the economy, employees with banking knowledge and competencies alone are no more sufficient to gain a competitive advantage and providing a environment of developing psychological resources is crucial for increased engagement and performance. Thus, a thorough understanding of the associations between PsyCap and employee engagement among bank employees is needed as the recent technological developments and modern trends in the banking sector necessitate the banks to foster employee engagement which is of top priority to gain competitive advantage