ISBM – A certain cooperative bank, named after a great saint attracted several depositors, became customer friendly, and carried on good business transactions.

Business Ethics

Case (20 Marks)

A certain cooperative bank, named after a great saint attracted several depositors, became customer friendly, and carried on good business transactions. However, during an audit by the cooperative department, irregularities to the tune of Rs. 10 crore surfaced. It was found that the chairman of the bank himself used Rs. 10 crores through several loan accounts. Due to these irregularities, RBI had to stop the transactions, and account holders could not operate their accounts. The cooperative Department had to appoint an Administrator.

Answer the following question.

Q1. Is it proper and ethical on the part of the authorities to mislead the account holders and customers by carrying on irregular activities, especially when the bank was named after a holy personage?

Q2. Is there any breach of ethical conduct on the part of the chairman of the bank for using Rs. 10 crores of the bank through loan accounts? If so, give reasons