Chapter 53: Ethical Dimensions: Employees (JAIIB – Paper 2)
1. Which of the following is an example of “abuse of official position” by a bank employee?
A. Attending training programs arranged by the bank
B. Reporting suspicious transactions under AML guidelines
C. Ensuring fair lending practices
D. Using bank resources for personal gain
Abuse of official position refers to misusing the authority or resources of the bank for personal benefit, which is unethical and punishable.
2. An employee learns about an upcoming merger of a listed bank and purchases shares before the information is public. This act is classified as:
A. Professional judgment
B. Insider trading
C. Whistleblowing
D. Conflict of interest resolution
Insider trading occurs when non-public, price-sensitive information is used to gain an unfair advantage in securities trading.
3. Which of the following actions violates the ethical use of proprietary data?
A. Sharing customer data with unauthorized persons
B. Protecting customer confidentiality
C. Using secured servers for storing data
D. Following data retention policies
Proprietary data, such as customer information and internal reports, must not be disclosed or misused for personal or external gain.
4. A bank officer accepts expensive gifts from a borrower in exchange for sanctioning a loan. This practice is best described as:
A. Fiduciary responsibility
B. Ethical leadership
C. Bribery
D. Professional conduct
Accepting gifts, cash, or favors in exchange for official work is bribery, which is unethical and prohibited by law as well as bank’s code of conduct.
5. Which of the following is the correct ethical response if a customer offers a bribe to a bank employee?
A. Accept it discreetly if no one notices
B. Politely decline and report as per bank policy
C. Keep it as a token of goodwill
D. Ignore it without reporting
Employees must refuse any bribe and report the incident immediately to the higher authorities or vigilance department, as per the bank’s compliance framework.
6. Which of the following best represents an employee’s obligation to third parties in banking?
A. Sharing internal strategies with competitors
B. Ignoring customer complaints from vendors
C. Ensuring fair treatment of customers, vendors, and regulators
D. Providing inside information to business partners
Employees are ethically bound to deal fairly with third parties such as customers, suppliers, regulators, and the public, ensuring trust and compliance.
7. Refusing to promote a qualified employee only because of gender or caste is an example of:
A. Job discrimination
B. Ethical promotion
C. Transparent evaluation
D. Employee empowerment
Job discrimination occurs when decisions are made on the basis of caste, religion, gender, or other irrelevant factors rather than merit and performance.
8. Which of the following would NOT be considered workplace discrimination?
A. Denying training opportunities based on age
B. Paying different salaries for equal work due to gender
C. Rejecting promotion due to caste
D. Assigning tasks based on individual skill sets
Discrimination is based on unfair bias. Allocating work according to skills is a fair managerial practice, not discrimination.
9. Which of the following situations qualifies as sexual harassment in the workplace?
A. Giving constructive feedback on performance
B. Making unwelcome sexual comments or advances
C. Assigning additional work during peak season
D. Enforcing dress code as per bank policy
Any unwelcome sexual remarks, gestures, or advances constitute sexual harassment under workplace ethics and the POSH Act, 2013.
10. What is the correct action if an employee experiences sexual harassment at the workplace?
A. Report the matter to the Internal Complaints Committee (ICC)
B. Remain silent to avoid conflict
C. Discuss casually with colleagues
D. Resign immediately without reporting
As per the POSH Act, 2013, organizations must have an Internal Complaints Committee (ICC). Victims should file a formal complaint to seek redressal.
11. Which of the following best describes a conflict of interest for a bank employee?
A. Attending mandatory training sessions
B. Following RBI reporting guidelines
C. Processing a loan application of a close relative without disclosure
D. Enforcing AML/KYC compliance
A conflict of interest arises when personal interests interfere with professional judgment. Handling relatives' accounts without disclosure is a classic example.
12. How should an employee manage a potential conflict of interest situation?
A. Disclose the conflict to higher authorities and recuse from the decision
B. Hide the conflict and continue the task
C. Take the decision personally for faster processing
D. Delegate it secretly to a friend
The ethical practice is to disclose any conflict to the appropriate authority and withdraw from related decisions to maintain impartiality.
13. A bank’s senior manager diverts a profitable project to a company owned by his family. This is an example of:
A. Transparency in operations
B. Professional accountability
C. Proper delegation
D. Conflict of interest
Directing business opportunities to family-owned entities is a misuse of position and a clear conflict of interest.
14. Which of the following is an ethical requirement in related party transactions?
A. Keeping them secret to protect privacy
B. Full disclosure and transparency in financial reporting
C. Avoiding reporting to auditors
D. Approving them informally without board consent
Ethical accounting practices require related party transactions to be disclosed and approved transparently to avoid bias and manipulation.
15. Manipulating related party transactions to hide losses in financial statements is a violation of:
A. Fair accounting practices
B. RBI reporting timelines
C. Customer service guidelines
D. AML/KYC regulations
Using related party transactions to misrepresent financial health violates fair accounting and corporate governance standards.
16. Which of the following is a key ethical responsibility of Human Resource Management (HRM) in banks?
A. Hiring based on personal connections
B. Ensuring fair recruitment and equal opportunities
C. Promoting favoritism in promotions
D. Ignoring employee grievances
HRM ethics require fair hiring, promotion, training, and equal treatment of employees without bias or favoritism.
17. An HR manager suppresses complaints of workplace harassment to protect senior officials. This is a violation of:
A. Professional development policy
B. Customer grievance redressal policy
C. Corporate social responsibility
D. HRM ethics and employee rights
HRM must protect employee rights. Suppressing harassment complaints is unethical and against both labor laws and HRM ethics.
18. Which principle of employee representation ensures that staff can voice their concerns through unions or committees?
A. Principle of participation and collective bargaining
B. Principle of favoritism
C. Principle of secrecy
D. Principle of autocracy
Representation through unions or staff committees allows collective bargaining and ensures employees have a voice in workplace decisions.
19. Providing a safe and healthy work environment for employees is primarily the responsibility of:
A. Customers
B. Competitors
C. Management
D. Trade unions
It is the responsibility of management to ensure safety, health, and conducive working conditions for all employees.
20. Which of the following practices BEST supports an ethical work environment in banks?
A. Encouraging workplace harassment reporting and fair resolution
B. Ignoring employee stress and workload
C. Promoting favoritism in appraisals
D. Withholding employee benefits without cause
An ethical work environment encourages open reporting, resolves complaints fairly, and provides a healthy, unbiased atmosphere for employees.
21. When employees act as “ethics ambassadors,” their primary role is to:
A. Focus only on meeting sales targets
B. Ignore unethical practices to maintain harmony
C. Promote ethical conduct and set positive examples
D. Avoid participating in compliance training
Employees as ethics ambassadors lead by example, follow codes of conduct, and encourage colleagues to maintain ethical standards.
22. Which of the following behaviors reflects an employee acting as an ethics ambassador?
A. Reporting a suspicious transaction as per AML guidelines
B. Ignoring a colleague’s misuse of customer data
C. Accepting gifts from vendors to speed up work
D. Disregarding compliance training sessions
Ethics ambassadors act responsibly by reporting unethical activities, ensuring compliance, and protecting the bank’s integrity.
23. Managers as ethical leaders are expected to:
A. Prioritize profits over all ethical concerns
B. Lead by example and enforce ethical behavior in teams
C. Ignore conflicts of interest for business growth
D. Reward only sales performance without considering conduct
Ethical leaders set the tone from the top by modeling integrity, fairness, and accountability, ensuring employees follow ethical practices.
24. A manager refusing to sanction a loan despite pressure from a politically connected applicant is an example of:
A. Conflict of interest
B. Workplace discrimination
C. Insider trading
D. Ethical leadership
Ethical leadership means making fair, unbiased decisions even under external pressure, maintaining the bank’s credibility.
25. Which practice should managers adopt to strengthen an ethical culture in banks?
A. Encourage open communication and whistleblowing without fear
B. Discourage employees from questioning unethical orders
C. Promote favoritism in appraisals
D. Overlook minor policy violations for efficiency
Ethical leaders foster trust by creating an open environment where employees can raise concerns without retaliation.
