In today's globalized economy, the role of the state is diminishing fast, while the role of non-state actors, such as corporates, is increasingly becoming critical for the conduct of world affairs. Indeed, many of the functions performed earlier by the governments are today being performed by the corporates. This has, of course, created a liberal business environment that promotes competition among producers/service providers, benefiting the consumers with quality goods at a cheaper price and producers with more profits. It is in this context that the need for ethics and corporate governance has become an essential part of the corporate culture. Although maximization of profit and returns on investment still remain the central goal of businesses, today corporates cannot shy away from conducting their businesses in a socially responsible manner; indeed, that has become the prime concern of every multinational business entity.

Banking and banking corporations are no exception to this evolving phenomenon. Indeed, they—being the providers of capital for businesses—have a pivotal role to play. Thus emerged ethical banking that "aims at not only economic but also social improvement" as a topical subject both for practicing managers and academia as well. To remain ethical, banks are expected to be transparent in their investment and other decisions and invest funds in such projects that are known to create social value that is measurable globally—in short a management that is professionally driven towards maximum social participation as dictated by the wishes of its depositors and investors. It is against this backdrop that the authors, Leire San Jose and José Luis Retolaza, of the paper,"Information Transparency as a Differentiation Factor of Ethical Banking in Europe: A Radical Affinity Index Approach", have developed a `Radical Affinity Index' using the already identified characteristics of ethical banking that facilitates classification of banks into ethical or otherwise. Using the index thus created, they have evaluated a group of European banks to classify them as ethical or otherwise and found that it is the `transparent information' about the assets that stood out as the differentiator of ethical banking.

In the paper,"Implementing Risk-Based Internal Audit in Indian Banks:

An Assessment of Organizational Preparedness", the authors, Vijay K Khanna and V S Kaveri, have assessed the progress made by the Indian banks in implementing Risk-Based Internal Audit by carrying out a survey, using a well-structured questionnaire, in which 25 banks—private and public sector banks—have participated. Their study revealed that though the banks have made encouraging progress, there remained certain issues that need to be addressed by them immediately to make RBIA more effective.

They are:

(i) extension of the RBIA, which is today confined to branches alone, to cover banks' controlling offices, investment department, risk management department and merchant banking and other advisory services departments

(ii) prioritization of allocation of audit resources shall be effected using audit-risk matrix

(iii) operating staff needs to be provided with an operational manual explaining the RBIA mechanism so as to ensure its effective implementation

(iv) wherever off-site risk assessment is carried out, banks need to counter-check its findings with the on-site audit reports to enhance the quality of RBIA; and

(v) putting requisite MIS in place that strengthens the RBIA mechanism. The authors have also suggested suitable measures to overcome these constraints.

In the context of the changing banking scenario owing to the economic and financial reforms being launched from time to time, the authors, A Kumudha and Susan Abraham, of the next paper, "Organization Career Management and Its Impact on Career Satisfaction: A Study in the Banking Sector", have observed that a need has arisen for Indian banks to re-draft their business strategies, which include exercises such as restructuring, downsizing, de-layering and mergers and acquisitions. These developments have obviously posed a new challenge to them: effective management of human resources to counter the downside of such strategies. In the light of these developments, the authors have carried out a survey to assess the efforts of the bank managements in harnessing the potential of "Organizational Career" as a tool to maintain the morale of their employees amidst the sweeping changes taking place all around. The said survey was carried out using a well-structured questionnaire among a sample of 100 managers hailing from 13 public and private sector banks. The study reveals that the managements' efforts at enabling the employees handle their `organizational career' well through conducting training programs meant for the self-development of employees, informing employees in advance about the likely job openings, helping them to get reequipped with the right set of skills through well-structured training programs, imparting skills for preparing the employees to manage their retirement well, etc., are found to contribute significantly towards the career satisfaction of employees.

In the next paper, "An Assessment of the Impact of Personality Traits on Job Performance in Banking Industry", the authors, Babita Dosajh and Bharti Gandhi, have presented their findings on the relationship between personality traits—such as low vs. high anxiety; envia vs. exvia; tender-minded emotionality vs. alert, poise; subduedness vs. independence; neuroticism vs. stability; and introversion vs. extroversion—and the employees' job performance in public and private sector banks of India. Based on their findings, the authors concluded that the managers in private sector banks are more stable, outgoing, socially bold, with an optimum level of anxiousness, which have significantly impacted their productivity positively.

In the last paper, "A Study of the Quality of Services Provided to SSI Customers by Public Sector Banks", its author, Sultan Singh, evaluated the quality of service provided by the public sector banks to small scale industries by eliciting the responses from a sample of 50 SSI customers through a pre-tested structured questionnaire. The said primary data was interpreted using statistical techniques such as t-test and ANOVA. Interestingly, the author has drawn certain conclusions, such as the non-availability of timely finance for rehabilitation of SSI units resulting in increased industrial sickness among SSI units, which call for a thorough research further.

- GRK Murty
Consulting Editor