ETHICAL ISSUES FACING THE BANKING INDUSTRY

Economic performance of a country is largely determined by banking and financial system. Banking and finance play a vital and crucial role in framing public policies in today’s business environment. Banking ethics is a specialized set of ethical standards and rules that should be followed in the activities of financial institutions and employees of the banking sector. But despite the simplicity of the definition, in the modern world, this concept becomes complex and ambiguous. An ethical issue is defined as a problem, situation or opportunity that requires an individual group or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical. Businesses and industries increasingly find themselves facing external pressure to improve their ethical track record. Sustainable and ethical banking has been developing for Decades and is becoming a significant force in the financial Industry. The importance of studying this subject is defined by the fact that the ethical behavior of the bank and bank employees promotes banking. At present there are several conceptions of banking ethics: general ethics, regulated ethics and ethical bank. The most common practice is to regulate internal and external relations of banks and bank workers with ethical codes. At the same time, studies show the existence of problems in the banking standards of ethics, which negatively affects the financial institution. This paper highlights social and ethical issues which help in achieving sustainable development of banking and finance.