Strategy plays a very important role in operation of an institution. Sun Tzu. an ancient Chinese philosopher has said: "Strategy without tactics is the slowest route to victory: tactics without a strategy is the noise before defeat". Strategy is a thorough and long-term plan of an organization to achieve its long-term goals. According to Mintzberg (McGill University), strategy is a flow of decisions and action programs. According to Chandler (Harvard University), setting up a strategy includes identifying long-term goals (of an organization) and implementing action programs. along with allocating necessary resources to achieve these goals. In the context of recent fierce competition. each bank needs a strategy of its own to survive and confirm its position against competitors in the commercial arena. This paper will discuss basic strategic matters and major steps in setting up a bank's strategy.