Page 42 - Banking Finance October 2023

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discussion of ethical issues with honesty is important to Gather the facts about sequence of occurrence of
successful ethical decision making. events.
Ascertain your test for right vs. wrong. How would you
Application of Business Ethics: define the problem, if you were to stand on the other
Ethics of human resource management: Ethics is side of the fence.
significantly important in Human resource management
since it is concerned with human issues, such as health and Ascertain the test for right versus right theory For
example trust vs. loyalty, justice vs. mercy etc.
safety at workplace, skill enhancement and development,
compensation and overall employee - employer relationship. Your approach must look reasonable and persuasive.
Investigate if there is any third way out of the situation
Ethics of sales and marketing: Ethics in marketing is a
philosophy that promotes honesty, fairness and responsibility Make decision take action
in all sales and marketing activities performed by an Revisit and reflect on the decision
enterprise. Since advertising is a mode of communication,
therefore it should not be misleading and manipulative. Ethical dilemma exists in providing banking services to the
customer during various phases. For instance, opening an
Ethics of production: Business needs to provide its account, KYC norms have been adhered to or not, charging
customers best quality products, and should not the interest on different products and services,
compromise to s\achieve cost efficiencies. Production disbursement of loans and advances as per the process and
process and technology should also be updated to match need of the customer, carrying out due diligence in credit
administered standards. proposals, monitoring the account and proper
implementation of provisioning norms etc. At every stage,
Ethics of finance: Professionals in business of financial the bank staff should follow the ethical principles not
services have to serve both their customers and company withstanding any outside or inside pressures. Staff must
with integrity and honesty. They must avoid conflict of refer to the Law or Code of Ethics or internal guidelines.
interest and provide information to its customers in full
accuracy, fair, timely and understandable manner. Business Ethics and customers
Professionals must also respect the confidentiality of
information they obtain during the course of business and Customer being the back bone of the banking business, it is
essential that both parties i.e. bank and customer understand
should not use it for personal advantage.
all ethical dimensions in conducting the banking activities.
Ethical dilemma
Starting from the account opening to the end of closing the
Ethical dilemma occurs when there is a clash between two
account, the life cycle of a customer relationship with any
rights. It is not disagreement between right and wrong but bank is to be covered by the Code of Ethics laid down by the
it is a conflict amongst two equally right moral perspectives.
management of the bank in line with the regulatory
An ethical dilemma exists when one is faced with having to framework. Business ethics refers to honesty, integrity,
make choice among the following alternatives loyalty, correctness, care, respect for others, respect for law,
1. Significant value - conflicts among differing interest
and concern for excellence, leadership, reputation and
2. Real alternatives that is equally justifiable responsibility.
3. Significant consequences on stakeholders in situation
Consequences of unethical behaviour can lead
Ethical dilemma are required to be thought about and to:
analyzed in a broader perspective. Steps for dealing with Affecting fame and reputation of the bank
ethical dilemma are as follows-
Acknowledge that there is a moral issue Disappearance of the bank
Losing clients and business partners
Ascertain the people who will be affected by the
decision. Also, determine your role. Wasting resources to hide unethical behavior

42 | 2023 | OCTOBER | BANKING FINANCE