<p>The present study aims to investigate the structure-performance relationship for Indian banks in a changing environment embodied with the consolidation of public banks, but promotion to the private banks. For this purpose, study utilises the generalised method of moments over unbalanced panel data of Indian banks during 1995–2021. The empirical results support the efficient-structure (ES) hypothesis, and rules out the prevalence of structure-conduct performance (SCP) and relative market power (RMP) hypotheses in case of full sample analysis. This suggests that better a bank manages its efficiency, more is the profit. However, the empirical findings for structure-performance relationship differs for sub-sample analysis across size and ownership. It supports the ES hypothesis for small-size banks; however, hybrid efficiency/collusion hypothesis in the case of large-size banks. Concerning the ownership group, the empirical results support the hybrid efficiency/collusion hypothesis in the case of private sector banks (including foreign banks); however, rules out the SCP or ES hypotheses for the public sector banks. Study also finds that the higher market power reduces bank’s efficiency, and thereby supports the results for quiet life hypothesis (QLH). Consequently, banks’ consolidation approach of the Indian banking industry requires cautious approach as this may lead to a reduction in the efficiency of banking sector.</p>