Ethics in Banking: Balancing Compassion and Integrity

You are working as an executive in a nationalised bank for several years. One day one of your close colleagues tells you that her father is suffering from heart disease and needs surgery to service. She also tells you that she has no insurance and the operation will cost about Rs 10 lakh. You are also aware of the fact that her husband and that she is from a lower middle class family. You are empathetic about her situation. However, apart from expressing your sympathy, you do not have the resources to fund her.

A few weeks later, you ask her about the well-being of her father and she informs you about his successful surgery and that he is recovering. She then confides in you that the bank manager was kind enough to facilitate the release of 10 lakhs from a dormant account of someone to pay for the operation with a promise that it should be confidential and be repaid at the earliest. She has already started paying it back and will continue to do so until it is all returned.

(a)   What are the ethical issues involved?

(b)   Evaluate the behavior of the bank manager from an ethical point of view.

(c)    How would you react to the situation?

This scenario, set within the context of a nationalized bank, presents a compelling ethical challenge. As an executive with several years of experience, I find myself at the intersection of empathy and transparency when a close colleague shares about her family crisis.

Stakeholders involved in the case:

·         My Colleague: She is directly involved as her father's surgery was funded through the dormant account.

·         The Account Holder: The owner of the dormant account is a stakeholder, even if they are unaware of the transaction.

·         Bank Manager: The bank manager facilitated the release of funds and has a responsibility in this situation.

·         Bank: The bank itself is a stakeholder, as its reputation and ethical standards may be at risk.

(a) Ethical Issues Involved:

·         Confidentiality: The bank manager accessed and used funds from a dormant account without the account holder's knowledge or consent, breaching confidentiality.

·         Misuse of Authority: The bank manager used their position to facilitate the release of funds for personal reasons, which can be seen as an abuse of power.

·         Transparency: The transaction was kept confidential, lacking transparency, which is essential in financial transactions.

·         Potential Legal Implications: There may be legal consequences for accessing and using funds from a dormant account without proper authorization.

(b) Behavior of the Bank Manager:

Positive Aspects:

·         The bank manager displayed compassion and a willingness to help a colleague in need.

·         The manager's action saved a life and provided financial relief to the colleague's family.

Negative Aspects:

·         The bank manager accessed funds from a dormant account without the account holder's knowledge or consent, which raises ethical and potentially legal concerns.

·         Maintaining confidentiality without proper documentation or authorization can be seen as unethical.

(c) My Response to the above situation

As an executive in the nationalized bank, my role would involve upholding ethical standards and ensuring that the bank operates with integrity.

·         Express Concern: Express my sympathy and concern for my colleague's father's health and recovery, acknowledging the difficult situation they faced.

·         Encourage Repayment: Encourage my colleague to fulfill her promise to repay the funds as soon as possible, emphasizing the importance of maintaining ethical standards and repaying the debt.

·         Review and Report: Suggest that my colleague or the bank manager formally review the situation and consider reporting it to higher authorities within the bank to ensure transparency and adherence to banking regulations.

·         Seek Legal Advice: Advise my colleague to consult with legal counsel to understand the potential legal implications of accessing and using funds from a dormant account without explicit consent.

·         If I believe that there are serious ethical or legal concerns, I consider discussing them with my superiors or the appropriate authorities within the bank.

Ultimately, it's important to strike a balance between empathy and adherence to ethical and legal standards in handling such situations. Encouraging transparency and ethical behavior should be the priority while providing support and guidance to your colleague.