Consumer confidence in banking institutions has become a key factor of brand loyalty, retention, and financial behaviour in a fast-changing financial environment.  Consumer confidence is especially affected by their views of a bank's financial stability during economic upheavals including the COVID-19 epidemic.  This paper views financial resilience and bankruptcy risk as consumer trust signals rather than only as accounting tools.  The study evaluates the perceived financial stability of several Indian public and private sector banks using the Altman Z-score model as a diagnostic tool.  The study also looks at how people read these financial signals and how their interpretations influence their behavioural reactions—including trust, satisfaction, and readiness to keep or change banking ties.  The results show a clear pattern whereby private sector banks outperform their public sector equivalents in terms of both actual financial health and perceived resilience, which directly affects consumer confidence.  The research offers useful insights for financial service designers, marketers, and legislators by suggesting a theoretical link between customer behaviour and financial risk assessment