Ethics in Banking

Question 1

What is banking ethics?

Answer 1

It is the body of rules and moral norms covering the conduct of banking employees both individually and collectively.

Question 2

What is the importance of ethics in banking?

Answer 2

1. Banks earn trust from customers when they are ethical
2. customers believe in affiliating with banks whose activities are ethical
3. minimization of financial risk
4. avoidance of legal issues

Question 3

What are some unethical acts in sales and marketing?

Answer 3

1. incomplete documentation and proper KYC (intentionally)
2. mis-selling bank products and services to customers
3. service delivery based on appearances
4. managers giving unfair targets to sales staff
5. unfair treatment of some customers
6. long delays in credit delivery and non-transparency in loan administration

Question 4

As an employee of the bank, what are some things you should consider when a customer attempts to give a gift?

Answer 4

1. the legality, frequency and value of the gift including the possible motive of the giver
2. you should not pattern your expenditure or lifestyle on a gift
3. you should not accept or provide entertainment to or from current or prospective stakeholders unless it is for a valid business purpose, providing an opportunity for a meaningful business conversation
4. consider if it is an activity that could embarrass or reflect poorly on the image of the industry.

Question 5

What are some ethical things you should do in credit management?

Answer 5

1. Transparent credit management
2. Avoidance of gifts that will cause compromises in decision-making.
3. Regular monitoring of facilities
4. Avoid shutting one’s eyes to obvious breaches in the loan contract.
5. Avoid competing with customers for their business