The study aims to assess customers’ perceptions of service excellence in public sector banks across key service quality dimensions and to examine its influence on customer trust and loyalty. It further seeks to understand how customer trust mediates the relationship between service excellence and customer loyalty in the context of public sector banking. The study adopts a quantitative research approach using primary data collected from customers of select public sector banks in Tirupati District of Andhra Pradesh through a structured questionnaire. Statistical tools such as discriminant analysis and Andrew F. Hayes mediation analysis were employed to analyze the data and test the proposed relationships. The findings reveal that service excellence is multidimensional, with reliability, tangibility, assurance, responsiveness, and personal attention playing distinct roles in shaping customer perceptions, and that service excellence significantly influences customer loyalty both directly and indirectly through customer trust. The results also indicate that customer trust acts as a crucial mechanism that strengthens and amplifies the impact of service excellence on customer loyalty. The study concludes that public sector banks can achieve sustained customer loyalty by delivering consistent and dependable services, strengthening employee competence and responsiveness, and fostering customer trust through transparent and customer-oriented practices. The study suggest that, integrating service excellence with deliberate trust-building strategies, public sector banks can enhance long-term customer relationships and maintain competitive stability in an increasingly demanding banking environment.