Despite Ethiopia's efforts to formulate a commendable competition law and an effective enforcement mechanism tackling anti competitive practices, including abuse of market dominance, the country has been experiencing various abuses of market dominance cases in many sectors. In the Banking sector, the government owned commercial bank, Commercial Bank of Ethiopia, the one with market dominance position- abuses its market dominance position by imposing excessive prices for some of its services, by discriminating among its customers in the provision of credit service and by excluding competitors from some banking business activities. However, no abuse of market dominance claim case has been instituted against the bank so far due to problems attributable to the substantive rules of the competition law itself and the enforcement mechanism established there in. This thesis, thus, assesses the trend of abuse of market dominance in the banking sector and explores the problems in the substantive provisions of the competition law and the enforcement mechanism pertaining to prohibition of abuse of market dominance in the Ethiopian banking sector that continue to instill problems in establishing a successful competition law legal regime. Finally, the paper has tried to point out some measures the government may take to improve the move towards developing a masterpiece competition law and establishing an effective enforcement mechanism with respect to prohibition of abuse of market dominance.