CSR activity is an important part of many banks' mission statement and serves as a guide to what the firm stands for and how it aims tofulfill these aspirations. Moreover, CSR is often cited as a key determinant of customer loyalty, either directly or indirectly, via different constructs. The objectives of this study were to assess CSR activities carried out by banks in Bahirdar city branches and investigate the effects of CSR activities on customers' loyalty. This study was used cross sectional mixed explanatory survey design research type and regression analysis was usedfor the purpose of hypothesis testing. The study was conducted in 5 banks of Bahirdar city branches and sample size of 100 respondents were participated. Primary data was collected through close ended questionnaires and interviews. The researcher was used.both descriptive and inferential statistics to involve measurement or relationships and differences between or among the variables. The data was presented and analyzed using SPSS version 20 statistical software and all comparisons were seen at (p<0.05) level of significance. As a result CSR activities were carried out by banks even though the percent of the activity was different from bank to bank and the correlations showed significantly positive relation with customer loyalty at p<O.Oland the regression analysis showed significantly different result at p<O.000. Therefore, the null hypothesis of philanthropic, legal and ethical responsibilities were rejected and the alternative hypothesis were accepted In addition the null hypothesis of economic responsibility was accepted. In conclusion CSR activities practiced by banks in Bahirdar city branches have positive effect on customers' loyalty. Finally the study recommends; banks should applied CSR activities since they are considered trustworthy by customers and augment long term relationship with customers which may in turn encourage long term success.