A method is proposed to identify the generators participating in an inter-area mode and the coherent generators by analyzing the discrete signals from phasor measurement units (PMU). In the present work, Zolotarev polynomial based filter bank (ZPBFB) is adopted to decompose the measured signals into monocomponents for modal frequency and damping. ZPBFB is preferred due to the narrow bandwidth of 0.1 Hz and hence closely spaced modes can be distinguished. All the generator speed signals are analysed with ZPBFB to identify the generators participating in an inter-area mode. Principal component analysis (PCA) is widely used for clustering sampled data. It is proposed in the present work to apply PCA on the decomposed signals, obtained from ZPBFB, of those generators participating in an inter-area mode for generator coherency. The efficacy of the proposed method is demonstrated on IEEE two-area test system, 16-machine, 68-bus system and on real time signals recorded by wide area frequency measurement system (WAFMS) in India on November 30, 2011. The detailed simulation results are presented. The performance of the proposed method is compared with small signal stability analysis and wavelet phase difference (WPD) approach. © 2018 Walter de Gruyter GmbH.