Policies Developed by Banks

Policy is an intentional organized system of rules to guide behavior and attain rational results. A policy is an unambiguous statement of purpose, which is normally applied as a prescribed procedure or rule. A policy is generally adopted by an organizational governance body usually within an organization. It applies to all the people and concerns that the organization is assumed to affect. The scope of the activity covered by the policy may extend from external affairs to internal affairs.

Policy

The main purpose of a policy is to provide guidance on important issues that relate to the organization and its decision-making processes. There are many types of policies, each with different purposes. The most common policy types are general policies, regulatory policies, proscription policies, ethical or performance policies, education policies, compliance policies and principles policies. A policy may also include special policies like associate policies, special needs policies, employment policies, harassment policies, anti-social behaviour policies, and other similar types.

Developing a policy is an involved process. Writing a policy is not an easy job. It involves extensive thought and evaluation on the existing work procedures, resources, and institutional arrangements in the organization. It involves extensive research on relevant topics, dealing with various government organizations, consulting experts, gathering feedback, writing the policy, monitoring and reviewing its implementation. While writing a policy, care must be taken to ensure that the policy does not have any serious legal defects and that it meets the stated objectives. The drafting of the policy may require the involvement of legal experts who are trained and proficient in drafting policies for a wide variety of organizations.

A policy, once written, remains effective only till the end of its term. Any changes in the organization need to be notified to all the concerned officials and the affected stakeholders. Since, the primary objective of a policy is to direct the actions of an organization, the procedure for notification differs with different policies. Most policies, for example those covering strategic management and planning require notice to the principal executive officers, key employees, owners and managers of the organization. However, there are some small business policies which do not need such notification.

For organizations dealing with financial matters, it becomes essential to keep track of stock ownership and transferability. As such, the policies should specify when such policies come into effect and who is responsible for stock ownership transfer transactions. Similar considerations are required with respect to land and building property owned by the organization. Any changes in rules adopted by the institution or any alterations in any loan agreement entered into by the bank with the organization should also be notified to the concerned officials.

After having created a policy, it is advisable to review the same periodically. One can either personally visit the concerned department to check whether the policies are being effectively implemented or can approach a professional organization that deals with policies. It is recommended that organizations go through a formal policy review periodically. This is because the effectiveness of a policy depends on its clarity and effectiveness. A thorough understanding of the policies and their modifications will help in creating effective policies.

Comments are closed.