Research background: Imperfect competition is measured by many different indices reflecting the level of monopoly power in the chosen market: (a) structural measurement approaches focusing on the elements of market structure, which measures the impact of centralization on competitiveness and (b) non-structural measurement approaches, which are based on the New Empirical Industrial Organisation theory. Researchers and practitioners in the banking market have chosen to use two indices in most cases – Herfindahl-Hirschman index and Concentration ratio, which are classified as structural measurement approaches. However, these indices tend to overestimate the monopoly power in smaller countries. These overestimates influence the further assessment of the deadweight loss and relevant policy measures to minimize the deadweight loss in the banking market. Purpose of the article: In order to get a better assessment of the monopoly power in the banking market the combined Imperfect Competition Measurement Index has been developed and presented in the article. Methods: literature analysis, regression analysis, mathematical analysis. Findings & Value added: the combined Imperfect Competition Measurement Index shows a more precise assessment of the monopoly power in smaller countries. These results can be used (a) to get a better understanding of changes in various banking markets in different countries over time, (b) to calculate the deadweight loss arising from the imperfect competition more precisely and (c) to draw appropriate policy measures aimed at minimizing the deadweight loss.