THE IMPACT OF PROFESSIONALISM AND

ETHICS ON BANKING INDUSTRY

 ABSTRACT
 In recent past the Banking industry has witnessed various
incidents of frauds, greed, insider abuse, poor ethical values
and internal controls, increasing non-performing assets etc.
These incidents resulted from lack of strong ethical principles
on the part of the management. This study attempts to highlight
whether unethical practices have led to Bank frauds, has greed
played a role in the number of bank forgeries? etc. Ethical
practices are increasingly understood to be fundamental to any
company’s operations, but even more so within banks. When
Banks fail to meet the ethical standards, the interest of all
parties is put at stake and results in social and economic loss
and create unnecessary friction in the economy.
 INTRODUCTION
 The study of Business Ethics has gained prominence in
the system of management school in recent years. This
is because highly publicised ethical scandals were
brought to the attention of the public. These scandals
played a vital role in increasing public, business and
academic awareness of issue related to Business Ethics.
OBJECTIVE OF THE STUDY
1. To analyse the concept of Business Ethics.
2. To find out whether it is important to have Business
Ethics in Banking,
3. What is the need or importance of Business Ethics in
Banking.
4. To infer ways through which Ethical Business
principles can be entrenched in the banking industry.
ETHICAL ISSUES RELATED TO BANKING
INDUSTRY
 Due to their key role in the economy, while working under
the principles of profitability and productivity, banks are
obliged to obey ethical principle of the banking profession.
The CBN makes it a duty by checking that the banks;
 Operate in a responsible, honest and business like
manner.
 Promote and encourage proper standards of conduct and
sound and prudent business practices.
 Suppress illegal, dishonourable or improper practices.
 POSITIVE IMPACT OF ETHICS IN
BANKING BUSINESS
 Guide banking business conduct along the line of
morality
 Ensure customer satisfaction
 Ensure steady and functional growth of the banking
business
 Ensure that effective policies/practices are followed.
 PROFESSIONALISM
 Professionalism is all about competence and
skilled attached to a profession or vocation.
Inculcation of peculiar skills and values, strict
adherence to universally acknowledged
standards that guide performance.
POSITIVE IMPACT OF PROFESSIONALISM ON
BANKING BUSINESS
 Adherence to sound and generally accepted banking
practice.
 Ensuring strong commitment to good banking
practice.
 Protection of depositors and investors.
 Prevention or minimizing of systemic failure
 Promotion of market integrity and discipline
 Maintenance of uniformity and standardization of
practice.
 IMPORTANCE AND NEEDS OF BUSINESS
ETHICS IN BANKING INDUSTRY
As per the survey the main aspects that signifies the need or
importance of Business Ethics in Banking are:
 To define acceptable behaviour
 To promote high standards of practice
 To provide a benchmark for self- evaluation
 To establish a framework for professional behaviour &
responsibilities As a vehicle of occupational identity
 Ethics corresponds to basic human needs
 It creates credibility with the public
 It gives management credibility with employees.
 It helps in better decision making
 CAN BUSINESS ETHICS AND PROFIT
MAXIMISATION GOES HAND TO HAND
ETHICAL EXPOSURE IN MAJOR
BANKING SECTORS
HOW PROFESSIONALISM HAVE HELP TO
GROW BANKING INDUSTRY
 CASE STUDY-1
 Former ICICI Bank CEO Chanda Kochhar and husband
Deepak Kochhar appeared before the Enforcement Directorate
here on Saturday in connection with a money-laundering case
related to a bank loan fraud, officials said.
 The ED has registered a criminal case under the PMLA early
this year against Chanda Kochhar, Deepak Kochhar, Dhoot and
others to probe alleged irregularities and corrupt practices in
sanctioning of Rs 1,875-crore loans by ICICI Bank to the
corporate group.
 CASE STUDY – 2
SATYAM COMPUTERS
 CONCLUSION
 Ethics, professionalism and corporate governance play vital
roles in banking business.
 There is a symbiotic relationship between ethics,
professionalism and corporate governance
 Constant training on the symbiotic relationship vis-à-vis
banking performance cannot be over-emphasized.
 Banking operations built on ethics, professionalism and
corporate governance will ultimately lead to robust banking
system with sustainable growth and development.
THANKING
YOU