The maturing deposit and the five-year note
Meera Nair, 78, walks into the Kochi branch alone to renew a ₹42 lakh fixed deposit that is her entire life savings, built from selling her late husband's shop. She draws a pension of ₹28,000 a month and tells the relationship manager, Karthik, that she wants 'the same deposit, no risk, and something my daughter can access if I am hospitalised'. Karthik is ₹48 lakh short of a ₹1.2 crore quarterly target for wealth products, with two weeks left. He instead pitches a five-year market-linked debenture: principal not protected, 3.5% exit load in year one, minimum investment ₹15 lakh. The suitability form already lists her risk profile as 'aggressive' and her annual income as ₹18 lakh. The branch manager tells Karthik to 'get the signature on the dotted line; at her age she will not read it'. The forms are in English, she reads only Malayalam, and she is hard of hearing. Her daughter accompanied her on earlier visits but not today. She asks twice whether the money is 'guaranteed like the last one'.
1. Identify the ethical failures embedded in this situation and name the specific value or principle each one violates.
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What is really being tested: whether Karthik sees a deposit renewal as a fiduciary act or as a sales target.
- Suitability (right to suitability under the RBI Charter of Customer Rights). A five-year, non-principal-protected product funded by the whole of a pensioner's savings, carrying a first-year exit load, is unsuitable unless the customer's objective is genuinely capital appreciation and she can absorb a loss. Her stated objective is capital safety.
- Informed consent. Consent requires comprehension. English forms given to a Malayalam-only speaker who is hard of hearing, with no translator and no recorded explanation, produce a signature, not consent.
- Falsification of records. Pre-filling 'aggressive' and inflating income to ₹18 lakh is not a clerical shortcut; it is the creation of a false record designed to pass a system control. That breaches the code of conduct independently of whether she ever signs.
- Conflict of interest. The ₹1.2 crore target is the reason for the pitch. Targets may legitimately drive effort; they can never drive the recommendation.
- Duty to vulnerable customers. Age, recent bereavement, dependence on the money, and sole decision-making raise the standard of care owed, not the speed of the sale.
- Integrity of the instruction. 'She will not read it' is an admission of intent to obtain consent by exploiting incapacity. An instruction to do that cannot be obeyed, whatever the hierarchy.
2. What should Karthik do in the next 30 minutes, and how should the interaction be documented? Be specific about what he must not do.
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In the next 30 minutes
- Present no form for signature. Tell her plainly, in Malayalam, that this product can lose money and is locked for five years.
- Hand her a one-page Malayalam summary: amount, term, what is guaranteed (nothing), the exit load, and whom to call.
- Re-do the risk profile in her presence, reading every question aloud, and record her own words - 'no risk, capital safe, accessible to my daughter'.
- Offer what actually fits: renewal of the deposit at the senior-citizen rate, joint holding with 'either or survivor', a registered nomination, a sweep-in arrangement for liquidity, and a locker for documents.
- Ask her to return with her daughter or any person of her choosing, and offer a quiet room with Malayalam-speaking staff.
Documentation
- A dated file note recording the conversation, the refusal to sell, and the manager's instruction, quoting it verbatim.
- A same-day email to the Branch Compliance Officer/Principal Officer, copied to the Regional Head, recording the suitability concern and the pre-filled form. Preserve the form as it stands rather than silently correcting it - it is evidence of a control failure.
Must not do: obtain the signature and 'explain later'; use a relative as a substitute signatory; record 'customer declined after counselling' when no counselling took place.
3. The branch manager repeats the instruction in writing and adds that the target shortfall will be noted against Karthik in his appraisal. Rank his options and explain what is ethically at stake in the easiest one.
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Ranked options
- Reply in writing citing the suitability requirement and asking for the instruction to be confirmed in writing - in practice this usually stops the matter.
- Escalate to the Principal Officer/Compliance and to HR in the same email trail.
- Use the whistle-blower channel if the pressure continues or retaliation begins.
- Refuse and accept the appraisal consequence, keeping the written record.
- If the bank sells the product anyway through someone else, make sure his protest is documented and, if the customer is harmed, that the record supports her.
The easiest option - obey, and let the pre-filled form carry the blame - fails on three counts. The person who obtains the signature is the seller, and the code of conduct attaches accountability to the individual, not to the form. 'I was instructed' is not a defence in conduct rules; it is an aggravating fact, because it proves the employee knew the act was questionable. And the harm is irreversible: once a 78-year-old pensioner's capital is locked into a loss-making product, no internal apology restores it.
Ethical stake: the trade is a short-term appraisal score against a long-term fiduciary reputation. Karthik's duty runs to the depositor who trusted the bank, and to the institution's licence to sell anything at all.