A conflict of interest arises when a person chooses personal gain over his duties to the employer or exploits his position for personal gain in some way. In banks, as a general rule, people of top management or Managers or employees should avoid conducting bank’s business with a relative or any other person or any firm, company, association in which the relative or other person is associated in any significant role. In such a related party transaction is unavoidable, they must fully disclose the nature of the related party transaction to the appropriate authority. Any dealings with a related party must be conducted in such a way that no preferential treatment is given to the party.
Some of the other examples of where conflict of interest arises are as under.
- Sanctioning of a loan by the Manager to close relatives like wife, son, daughter, son-in-law, brother-in-law, daughter-in-law, sister-in- law etc.
- Waive-off overdue interest on loan, processing charges which are against the norms of the bank.
- Write-off of loan accounts at the branch by the Manager without the higher authorities’ permission.
- An external or internal auditor of a company knowingly is a party to any illegal activity, or engages in acts that are discreditable to the profession.
- A lawyer firm accepting a new client who is adverse to other clients the firm has represented, past and present.
- If the client is looking to sue a particular business that happens to be owned by the lawyer’s friend, there’s a clear conflict of interest for the attorney.
- A defendant (opposing) counsel is represented by a lawyer who is related to plaintiff’s lawyer.
- Doctors’ relationships with drug companies (including any payments or gifts received from the companies) who prescribe particular drug of the company to patients because of his relationship with the company.
- Doctors who own testing facilities or treatment centers may preferentially refer patients to these facilities for care and may benefit financially from doing so.
- A teacher engages in private tutoring, there is a risk that an actual, potential or perceived conflict of interest exists.
- A purchase manager accepts trips and gifts from a vendor and then selects the vendor’s products for purchase by the company.