RBI Grade B Officer (General / DEPR / DSIM) 2025 · Question 240 of 259

- Read the passage given below and answer the following questions: In a large financial institution, several top-level managers gradually began engaging in unethical practices, such as favouring certain clients and bypassing due-diligence norms. Observing this behaviour, many lower-level employees also started compromising their ethical standards. One junior officer even approved a clearly risky and unethical loan that later turned into a bad loan. When questioned, he justified his action by saying, “Everyone else in the organization is doing this, so why shouldn’t I? If the seniors can do it, we can also follow the same practice.” This attitude reflects how unethical conduct at the top can cascade down the hierarchy and influence the behaviour of the entire organization. (This is a recreated passage and not the exact one asked in the exam) Based on the above passage, if the organization implements and strictly enforces a formal Code of Ethics, which of the following outcomes is most likely to be observed?

Finance and Management

1. AA. Increased tolerance of unethical practices at lower levels
2. BB. Increase in ethical behaviour across the organizationCorrect
3. CC. Greater dependence on informal norms rather than rules
4. DD. Higher short-term profitability despite ethical compromise
5. EE. Reduction in accountability of senior management