You have recently been promoted as a Branch Manager in a Public Sector Bank. The bank is battling high NPAs and mounting losses. You have been assigned a very high target of loans by the higher management for the current quarter. Your career prospects also depend on your performance in critical times. Few days back you rejected a loan application for a huge sum based on detailed analysis. Today you got a call from the Regional Manager to approve the loan quickly. On your reluctance to approve, he hints that the loan is sought by a person well connected in the finance ministry and that a refusal will have consequences for everyone in the approval chain. You are now in a tough spot. Based on the given information, answer the following questions: (a) Bring out the ethical issues in the case above. (b) What are the consequences of agreeing to the demands of the senior in the given case. Assess which of them are meritorious and which are not. (c) Suggest institutional reforms that can result in non-punishment of honest feedback.

(i) Me (Branch manager) (ii) Higher management (iii) Regional Manager (iv) Loan applicant + Finance Ministry (possibly) (v) General public (money in the bank) & economy of the nation

The Ethical issues are (i) Obeying the commands of the senior blindly (ii) Protecting career growth vs possibility of high NPAs & loss to economy

(iii) going against the entire work culture & the approval chain etc. (iv) Accepting other's advice (Regional Manager) over my self detailed analysis of loan application.

(b) Consequences of agreeing to the demands

(iii) loan turns NPA & creates losses. Backfires & my own job in danger as the loan was sanctioned by me.

(iv) Loans is healthy & generates profit. Appraisal for the work.

Clearly the odds of meritorious result are very slim. My own analytic skills are getting undermined as I did a detailed analysis of the application. I will try reserve all my apprehensions beforehand & ask the Regional manager to request in writing for approval of the loan. I will try to dissociate with the process so that neither any failure is attached to me, nor any undue reward for poor analysers (as in the (iv) consequence).

Reforms

• Improving the work culture by incorporating mechanisms of registering honest feedbacks which can be later referred to. such as online portals or per project notes where detailed remarks can be made.
• Decentralisation of work & promotion of the system of accountability so that people are aware of consequences of mistakes.

(ii) daughter → career might be affected. → face future humiliation of using fathers support if no action decision is taken

(iii) others →