<p>Congestion with undesirable outputs is known as the phenomenon where by overinvestment in inputs leads to a decrease in desirable outputs and an increase in undesirable outputs. This paper proposes a new method for measuring congestion which considers undesirable outputs and the joint weak disposability between desirable outputs and undesirable outputs, a consideration which has been neglected in previous congestion studies, based on data envelopment analysis. The method proposed herein is then applied to the case of China’s banking industry, revealing that the main cause of congestion in China’s banking industry is overinvestment in fixed inputs and number of employees. This paper also analyzes the congestion in different types of banks to help for further analysis and decision-making.</p>