This research investigates the impact of information technology on operating costs of the selected public and private banks in Iran. Independent variables are the size of the bank, cost of human resources, communication equipment and network, Database, communication hardware and software.  We use balance panel data for 9 selected banks (Melli, Mellat, Sepah, Saderat, Sina, Pasargadae, carafarin, saman and refah) in a fixed effects panel model for the period of 2009-2015. The results indicate the positive effect of information technology on banks operating costs reduction.