The Diwali hamper and the consultancy
SecurePrint has printed cheque books and account-opening kits for the three branches of a private bank in Pune for four years, worth ₹95 lakh a year. The contract is up for renewal in three weeks. Suresh, the branch head who sits on the evaluation panel, receives a Diwali hamper - dry fruits, a branded watch and vouchers - worth about ₹18,000, delivered to his home. The vendor's director also offers Suresh's wife, a graphic designer who has been out of work since 2023, a 'consultancy' at ₹40,000 a month for roughly six hours a week, 'to advise on the design of statement formats'. Separately, the last two consignments had three defects: cheque books printed with the wrong IFSC, one book missing a CTS-2010 mandatory field, and a misprinted account kit that reached a customer. SecurePrint wants Suresh to recommend them to two other branches that are about to sign contracts. The bank's code of conduct caps gifts at ₹2,000 and requires declaration of any family interest in a vendor firm, but the declaration portal is 'temporarily down' and the compliance officer is on leave.
1. Assess each element separately - the hamper, the spouse's consultancy, the printing defects, and the request to recommend SecurePrint to two other branches - stating which are governed by the code, which are judgement calls, and the test to apply in each.
Read the worked answer
- The hamper (₹18,000 against a ₹2,000 cap): governed by the code, no judgement required. It must be declined, or where refusing outright is socially awkward, deposited in the gift register and reported. Delivery to his home is irrelevant: the code regulates the recipient's position, not the address of delivery. A watch and vouchers are items of personal value, not customary hospitality such as a calendar or a box of sweets.
- The consultancy for his wife: an indirect personal benefit, and therefore also governed. Timing (three weeks before renewal) and vague scope ('six hours a week') suggest a retainer for influence rather than a genuine engagement. Disclosure in writing and recusal are the minimum; declining is the cleaner course.
- The defects: a factual performance issue. They must be logged with samples, dates and customer impact, and put to vendor management. Suppressing them (to protect a friendly vendor) and exaggerating them (to punish a vendor after a disagreement) are both unethical.
- The recommendation request: bartered influence. A panel member with a personal interest must not recommend the vendor anywhere.
The common test: would a reasonable outsider, reading the file, see a personal benefit linked to an official decision? Would he act identically if the vendor were a stranger? And the 'portal is down' excuse fails - compliance obligations are not suspended by an outage; an email to Compliance creates the record.
2. Set out what Suresh should do this week and indicate what his written communication to the vendor and to Compliance should say.
Read the worked answer
This week, in order
- Day 1 - the hamper. Return it under an acknowledgment, or hand it to administration for the gift register. Email the vendor two lines: 'Bank policy does not permit acceptance of gifts above ₹2,000. The hamper has been returned. Thank you.' Say nothing about the contract in that email.
- Day 1 - disclosure. Write to Compliance recording the gift (value, date, who delivered it) and the consultancy offer, what was said, and his response. The portal being down is why the email matters.
- Day 1 - recusal. Ask in writing to be removed from the SecurePrint evaluation panel and for another officer to chair it.
- Day 2 - defects. Send the three defective samples to vendor management with dates and the customer impact, and recommend a formal service-level review rather than a quiet word.
- Day 2 - the other branches. Decline to recommend; refer any query to vendor management.
- The wife's offer. Decline it politely and in writing, copying Compliance. That single step removes the conflict at its root.
Tone to maintain throughout: factual, non-accusatory, and documented. The vendor should learn that decisions are made on paper by the right panel, not that Suresh is hostile. Retaliation by a vendor whose gift was refused is itself a governance issue and should be reported if it occurs.
3. Suppose his wife accepts the consultancy in any case. What must Suresh do, and why is 'I can remain objective' not an acceptable standard?
Read the worked answer
What he must do: disclose it immediately and in writing, even though he will never touch the SecurePrint file. The bank - not Suresh - then decides whether the arrangement is compatible with his role. Expect conditions: his wife must not work on the bank's account, and he must be excluded from every decision, review, sign-off and informal discussion involving SecurePrint, and from any renewal for as long as the engagement lasts. If the vendor uses the connection in any sales pitch, the contract should be reviewed.
Why 'I can remain objective' fails
- Bias is real and unauditable. The risk is not a conscious trade; it is a slightly softer query, a defect not escalated, a benefit of the doubt given.
- Appearance matters as much as fact. A sound decision taken by a compromised officer still damages the bank's credibility when it is later discovered, and it will be discovered.
- The code's test is not 'did I take a bribe'. It is whether a reasonable person would identify a conflict. Non-disclosure turns a manageable conflict into misconduct; if the consultancy is later shown to be a disguised payment, it becomes fraud, and for officials of public-sector banks the Prevention of Corruption Act may also be engaged.
Ethical core: a conflicted officer's duty is to step out of the decision, not to promise to be careful inside it.