PurposeThis study examines the complicated relationship between psychological wellbeing, joy at work, creative ability and the mediating influence of psychological capital, drawing insights from self-determination theory within the context of the banking sector.Design/methodology/approachThe study utilized random sampling to gather comprehensive data from 465 banking employees. Following data collection, structural equation modeling was employed to test the hypotheses formulated based on the collected data.FindingsFindings underscore a significant association between psychological wellbeing and both joy at work and creative ability within the banking sector. Moreover, the study elucidates that psychological capital acts as a crucial mediator, illuminating the pathway through which psychological wellbeing influences joy at work and subsequently enhances creative ability.Practical implicationsThis research offers valuable insights for organizational leaders and policymakers, emphasizing the imperative of prioritizing psychological wellbeing initiatives and nurturing positive work environments to enhance employee satisfaction, productivity and innovative contributions within the banking sector.Originality/valueThe application of self-determination theory as a theoretical framework provides a robust foundation for understanding the dynamics between psychological factors and workplace outcomes. The banking industry, often characterized by high stress levels and demanding work environments, stands to benefit substantially from interventions aimed at fostering psychological wellbeing. By cultivating positive mental health and capitalizing on joy at work, organizations can stimulate employee creativity ability, thereby fostering innovation and adaptive problem-solving capabilities crucial in the contemporary banking landscape.