The loan approval management process – its ethical aspects

Abstract

The dynamically growing volume of loans being provided, associated with the ambitious plans of banks, is increasing the intensity of competitive pressure on the bank sector market. The activities of financial institutions are primarily regulated by legislative measures at the level of individual states as well as within the EU framework. Linked to this valid legislation, individual banks have methodologically set their loan approval process. A significant element of the loan approval process is that of the Human Factor – i.e. the person approving/Risk Manager, who is bound not only by the strategic aims of their employers and the legislative limitations but equally, by the ethical aspects, at a variety of levels –to not damage by their decisions their employers, the client, or submitters – i.e. Relationship Managers, and last but not least, society as a whole.