Business Communications: Short Notes

BANKING DIPLOMA EXAMINATION

Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh(IBB)
Business Communications-JAIBB
Short Notes

With a view to giving ideas on contemporary issues and events some topics are explained below in the form of short
notes. One may use the contents of these short notes in writing reports or letters as and when pertinent to the topics.
These Short Notes shall help to gather knowledge and practice to enhance writing skills.

MICR Cheque leaf:

For the last few years Bangladesh Bank has been working to modernize the country's payment system under their
'Central Bank Strengthening Project'. To automate the functions of payment system through the clearing houses a
program was launched in the name of Bangladesh Automated Clearing House (BACH) with two components: one is
Bangladesh Automated Cheque Processing System (BACPS) and the other Bangladesh Electronic Funds Transfer
Network (BEFTN).
Bangladesh Bank directed all the banks to follow a set of specifications to standardize their cheque leafs which
would be known as MICR (Magnetic Ink Character Recognition) cheques and make sure that all the account holders
of all the bank branches in Dhaka city are given MICR cheques and not to send any conventional cheque (non-
MICR cheque) to Dhaka Clearing House from April 01, 2010. In their latest circular the central bank has directed
that all banks now have to pay Tk 100 in processing fees for every non-MICR cheque at the clearinghouse of its
headquarters. The new catchword MICR as something chic sounds enigmatic to many of us. MICR concept was a
revolution in the early sixties when eyes of machines were too feeble even to read numeric characters, let alone
texts. With number of clearing instruments mounting astronomically bankers in the sixties were desperately
searching for a machine that could read numbers and automatically sort out the piled instruments inside the clearing
houses in busy cities like New York and London. Powders of magnet laced with printing ink worked like a magical
solution when such magnetic ink was used to print the numeric characters on the cheque leafs to prod the feeble eyes
of the machines and accentuate their reading and sorting capability, ushering in a new ground-breaking name 'MICR
banking instrument' that came with tamper-proof and high security special character schema. Many developed and
developing countries, except Bangladesh, have since been using MICR instruments for error-free sorting of
instruments in clearing houses.

Solar Energy:

Power outage or load shedding is essential for distributing equitably the available electricity among the subscribers
when production of electricity is not sufficient to cater to the needs of all the consumers all at a time round the clock.
But with frequent power outages all over Bangladesh living a life in our country has become intolerable, especially
when load shedding is done every alternate hour. There must be an alternative energy available if the government is
incapable in producing enough electricity to meet the growing demand of the ever increasing population in
Bangladesh.

There cannot be a better place than Bangladesh where solar energy can be used as an effective alternative energy
because we have sunny days throughout the year and the quality of our sunrays is the best with no fog or snow and
not much of cloud. Solar technologies are broadly characterized as either passive solar or active solar depending on
the way they capture, convert and distribute solar energy. Active solar techniques include the use of photovoltaic
panels and solar thermal collectors to harness the energy. Passive solar techniques include orienting a building to the
Sun, selecting materials with favorable thermal mass or light dispersing properties, and designing spaces that
naturally circulate air. Sunlight can be converted into electricity using photovoltaics (PV), concentrating solar power
(CSP), and various experimental technologies. PV has mainly been used to power small and medium-sized
applications, from the calculator powered by a single solar cell to off-grid homes powered by a photovoltaic array.
A world based on social business:

A few weeks back our Nobel laureate Muhammad Yunus while giving a lecture at the inaugural session of a three-
day international conference on "Creating a world without poverty---social business bridging the gap" called for
establishing social business as a problem solver, not as a means to maximize profit, with a view to tackling the
global poverty and social injustice. Mr. Yunus, the founder of Grameen Bank, also fancied "If we had created
another kind of business on the basis of selflessness, we could have created a different kind of world".

"Poverty is not a question of money, it is a question of structure," Yunus said in the same conference. Everybody
must agree with him if only his own Grameen Bank would have restructured their so-called collateral-free lending
system by selecting group members from among the poorest of the poor instead of their present way of selecting
from the comparatively affluent poor and would have charged interests like those of the stateowned
banks at less than 10 percent on reducing balance basis instead of their present way of charging 30 percent interest
calculated on flat rate basis. In this age of casino capitalism the pundits are always busy rephrasing their jargons to
camouflage the brute mechanism of robbing the poor of their meager properties and helping the rich churn out
money in the name of capitalism, corporatism, socio capitalism, freestyle-ism -- or social business -- whenever or
wherever the term suits in this world replete with hypocrisies and falsities. The world would have been a better place
for our living if we all could mean what we do say.

Voice over Internet Protocol:

ABOUT 60 million minutes of international calls are made to and from Bangladesh a day and more than 35 per cent
of these calls are still being routed by some illegal operators through Voice over Internet Protocol (VoIP).
According to an estimate, the government during the last ten years has been deprived of Taka 90 billion (Taka Nine
thousand crore) on account of lost revenues due to illegal use of VoIP technology circumventing the normal
International Long Distance Telecommunications Services (ILDTS) from which the government could otherwise
have earned revenues on those bypassed overseas calls. A syndicate of PSTN operators, internet service providers
and also mobile phone operators, who in most cases were backed by powerful elites, used their respective licensed
channels to route the VoIP calls at the expense of the government; these operators may be termed telephone voice
smugglers. Telecom Minister Rajiuddin Ahmed Raju however said that after a bill named "Telecom Regulatory Act
2010" is passed in the next Budget Session of the parliament, VoIP technology will be made open for all so that any
operator can handle international calls through VoIP in a legal and transparent manner and the government gets
revenues, however little, from every single telephony use through VoIP. Wage-earners, especially those whose poor
parents and family members live in rural areas, will be benefited by the cheaper means of VoIP calls they can use to
talk to their families.

Training of bankers:
To better the performance of individuals serving in any organization there is no alternative to “Training and
Development” in the concerned field. Such training is conventionally described as ‘human resources development’.
Training and development encompasses three main activities: Training, Education, and Development. Training
focuses on the job an individual currently holds. Education focuses upon a different area an individual, serving in
the same organization, may potentially hold in the future. And development focuses upon the activities the
organization employing the individuals may partake in the future. Individuals working in a bank must continually
undergo training and education as banking job is not only challenging but also demands updates in view of rapid
modernizations in banking operation. A retired banker, who worked in a bank in the early 60s, will be flabbergasted
seeing what a banker nowadays does to serve the clients with the help of computers. The concept of bankers-
customers relations has also changed. Training of bankers is as indispensable as balancing of books of accounts at
the end of the day.

Real estate business in Bangladesh:

Real estate business has been a roaring business in Bangladesh with economic developments. Density of population
in cities and towns raised the demand of accommodation for working people. Equipped with modern building
technology the architects and civil engineers have been offering apartments of different sizes in multistoried
buildings located at strategic positions. City dwellers don’t hesitate to buy those apartments even at high prices.
There are people who have sold their paternal properties both in rural and urban areas with a view to buy small
apartments of two rooms. Apartments are convenient in respect of security and easy commutation. People who were
used to a community living in individual houses with yards and trees are now
getting used to a different community living in compact flats with artificial plants decorating their living rooms and
balconies. Real estate business will remain a potential area of profit making business as long as people will continue
migrating from rural areas to urban areas.

Mobile phone:

Mobile phones nowadays are as commonplace as wristwatches. There cannot be found a single individual in
Bangladesh who has not seen or used a mobile phone. More than 20 million people of Bangladesh have now been
using mobile phones. Telephonic communication through mobile phones has revolutionized the concept of
communication.
Communication between people is the backbone of modern civilization. Business without
communication cannot be thought of. Mobile phones have been so rampant that use of conventional land phones or
even correspondence through letters and postcards has been minimal in our societies. Mobile phones are nowadays
used not only for conversations by voice. People find it convenient to text through mobile phones. Texting through
mobile phones is convenient, cheap and efficacious compared to voice. Even inter-net can be accessed through
mobile phones. Payment of utility bills has also been made possible through mobile phones. The mobile phone is
also used for listening to FM radio programs, playing recorded songs, taking digital photographs and what not. The
technological advancement of cell phones will not stop here. Future innovation will bring this magnificent invention
to greater heights, offering more functionality than ever. There is also a bad side of the use of mobile phone. Young
boys and girls are seen glued to their mobile phones day and night. Such addiction mobile phone is telling upon their
academic pursuits.

The prospects and problems of globalization:

Globalization is a concept that can be described as a process by which people of the world are unified into a single
society and function together. The idea may sound a little unconventional when we would wonder how people living
in a country in Europe could be unified with Bangladeshi people. Yes, such unification could not be thought of
twenty years back when it was very expensive and tedious on the part of Bangladeshi people to communicate with
people outside our country. But, thanks to mobile phones and inter-net keeping in touch with anybody living in this
world is a matter of seconds. In this age of globalization economic, technological, social, cultural and political forces
of the whole world have been combined and national economies have been integrated into international economy
through trade, foreign direct investment, capital flows, migration and the spread of technology. Globalization has
made technology available to the world population at affordable prices. But, there is a bad side of globalization.
Globalization has given more advantages to the rich and powerful nations than the poor and developing nations as
regards to trades. Multi-national corporations have been unleashed to maximize their profits at the expense of our
environment in their rush to establish a kind of “casino capitalism” all over the world.

Advantages and disadvantages of nationalized banks in our country:

Advantages of nationalized banks:

01. The nationalized banks guarantee job security for bank employees.
02. The nationalized banks care more for the poor clients than for their profit.
03. The government can materialize their development goals more conveniently through nationalized banks than
through any private bank.

Disadvantages of nationalized banks:

01. The nationalized banks always make loss due to lobbying from political quarters and pressures from trade
unions.
02. The nationalized banks have to work under the government and the government in most cases doesn’t
understand the commercial needs of a bank. So, the nationalized banks cannot compete with other private banks.
03. Employees of nationalized banks lack zeal and motivation as they think their jobs are guaranteed.
Life in rural Bangladesh:

Life in rural Bangladesh is very comfortable compared to life in urban areas. One who lives his living in rural areas
can feel the difference if he ever lived for a few days in any city or town. The very breathing in rural Bangladesh is
soothing as the air is pure and fresh while one has to breathe with difficulty if he has to live in a city like Dhaka
where air is extremely polluted. You can catch live fish from a pond; you can boil rice stored fresh from fields and
cook vegetables plucked fresh from your garden. You have no worry about whether you and your family members
are having adulterated foods or not. You may have your own milking cows to provide you with fresh milk. You
don’t have to worry about other privileges and amenities that are available in a town because all those are nowadays
easily available in any remote village in Bangladesh. There are schools and colleges, doctors and dispensaries, and
also electricity for you to enjoy any modern gadget. You may view TV programs through cable network too.

‘We cannot enjoy liberty without discipline’—elucidate:

Liberty without discipline is like playing a game without any rule. One can imagine how dangerous it would have
been if players were asked to play football without any referee to watch their games. The only factor that helped
humanity to enrich their civilization is law and order to maintain discipline. Had there been no discipline we would
have to live in the forests like beasts and animals. There was of course a time when discipline was not that much
necessary as there was no poverty or scarcity. The nature would provide whatever we needed. The trees were full of
fruits and we could quench our hunger without fighting with other fellow human beings. But, with the rise of
population and new inventions of scientific wonders discipline was deemed necessary to control human behaviors.

Fast food culture:

Fast food culture is a curse of modern life. It was during the industrial revolution after the World War II when all the
nations of the world became desperate to increase productions in all their industries. Workers in factories were asked
to produce goods day and night like machines; they were not allowed to go home for their lunch or dinner. So,
different types of fast foods like noodles were introduced and shops near factories and office premises found it very
profitable to sell those junk foods with unhealthful spices to make them delicious to tongues though harmful to
stomachs. Fast food business had grown so rapidly as a profit making venture that big players had invested tons of
money in churning out foods in packs in the quickest possible time. Franchises like McDonald thus became symbols
of modern living and young people developed craze to satiate their cravings for those fast foods. Obesity is one of
the bad outcomes of the fast food culture.

Microcredit and economic development in Bangladesh:

Microcredit means very small finance for the very poor who don’t have any property that can be offered as security
for a loan to a conventional bank. Grameen Bank of Bangladesh has made microcredit known to the whole world by
successfully lending and recovering very small collateral-free loans. Such micro loans were however first introduced
through a 100-crore Taka program known as SACP (Small Agricultural Credit Program) that was implemented by
all the state-owned banks of Bangladesh in the late 1970s. Landless and destitute women are the main beneficiaries
of such microcredit. Microcredit has been proven as a very effective tool for socioeconomic development in
Bangladesh. Microcredit is a financial innovation that has enabled extremely poor people in our rural areas to
engage in self-employment projects that allow them to generate income and exit poverty. Microcredit builds the
capacity of a micro-entrepreneur and generates employments. Microcredit is given to a group of members of similar
social status. All members of the group stand guarantors, both individually and collectively, for such credits. Such
guarantee minimizes the risk of recovery of small loans that are not backed by any collateral security. The only bad
side of microcredit offered by Grameen Bank or any NGO in Bangladesh is its high rates of interest compared to
interests charged by our state-owned banks. While the interest rate of similar collateral-free micro loans offered by a
state-owned bank is 8 percent to 10 percent, the interest rates of microcredit offered by an NGO vary from 20
percent to 30 percent. Tolerance in politics Tolerance in politics is the most important tool to discipline our social
life. Inefficient leadership is the main cause of intolerance in our politics. Democracy is meaningless if our leaders
do not espouse patriotism, loyalty, compromise and tolerance to guide their political parties. Our politicians are
themselves impatient and they can’t tolerate to hear anything good to anybody belonging to their opposition camps.
Intolerance is their weapon to motivate their followers and intolerance is also the main cause of their humiliating
defeats. Most politicians elected as parliamentarians find their time inside our parliament suffocating; but they find it
comfortable to spend their time with contractors who they can engage for development works in their constituencies.
Hobnobbing with moneyed businessmen is the prime passion of our politicians. Making money is their religion.
Unfortunately some of our great leaders who had vision and patriotism have either been assassinated or have been
sidelined by those who take politics not as a vehicle to develop our country but as a medium to line their own
pockets. Unless we choose our leaders from among the patriotic and honest people who are tolerant in their behavior
our country will go on suffering from perpetual leadership crisis.

Adulteration of food:

The first impression of adulteration of food we got in our childhood is the adulteration of milk. A dishonest milkman
mixes his milk with water for making extra profit. Adulterated milk in the form of watery milk was not so much
worrisome because water is not harmful to our health. But, nowadays dishonest and greedy traders and
manufacturers adulterate food with harmful and dangerous chemicals and substances to adulterate food that are
perhaps the main cause for a lot of diseases people are dying of. Artificial colorants and fragrant chemicals, often
toxic, are used to make stale drinks look and taste as genuine as fresh drinks. Fishes are immersed in formalin so that
unsold fishes are not decomposed. Formalin is very dangerous and fishes blended with formalin affect our stomachs
and intestines. Formalin is a saturated solution of formaldehyde, water and methanol. Lack of legal controls on food
quality, poor monitoring by authorities and employment of dishonest supervisors in the quality control departments
of the government have given rise to adulteration in food. In a free market society adulteration of food will continue
affecting our health unless the government takes stern punitive measures against those businessmen who are foisting
adulterated foods into our markets.

Money laundering;

Money laundering is the practice of hiding and converting illegally obtained funds in a manner that would seem
legal. Money laundering means any financial transaction that generates an asset or a value as the result of an illegal
act. Dishonest people and criminals launder their money to avoid legal actions against them when they make
property with the illegal money they had obtained or stolen through unfair means. Countries of the whole world
have taken various measures to stop money laundering, especially after the terrorist attack in New York on
September 11, 2001. In Bangladesh the Money Laundering Prevention Act-2002 came into force on April 5, 2002
with the aim to prevent money laundering. Bankers are instructed to watch over any suspicious transaction by any
client. A banker must report to the central bank through proper authority if he detects any unusual
transactions in his bank. It is assumed that due to preventive measures taken by all government against money
laundering remittance to Bangladesh through banking channels has increased manifold. Strict monitoring over
money laundering will also reduce the propensity of dishonest people in hoarding stolen money or taking bribes.

Banker-customer relationship:

Banker-customer relationship is a relationship based on mutual trust. A bank client entrusts his or her money with
the banker with an expectation that the banker will hand to the client money back along with interest accrued.
Besides money, a client also trusts a banker to keep his or her valuables like ornaments in a locker at safe custody
of the bank. A banker gives loan to a client against collateral securities like landed properties; so the banker has to
safe-keep valuable documents as to the title of the properties etc. When the loan is fully adjusted the banker must
return those valuable documents to the owner of the properties. Thus the banker is the one who is entrusted with the
above-mentioned valuable items, while the person who entrusts the items with a view to retrieving it on demand is
called the customer. The relationship may also be termed as creditor-debtor relationship. The customer is the
creditor who has the right to collect his deposit on demand personally or by proxy. As long as the banker is holding
a customer's items, the banker is indebted to the customer. A client's money kept in a bank is the bank's liability and
a loan given by a bank to a borrower is the bank’s asset. The relationship is based on a contract under certain terms
and conditions. For instance, the customer has the right to collect his deposit on demand personally or by proxy. The
banker too is under obligation to pay money to the depositor or to someone else who is duly authorized by the
customer. Particularly the banker should not leak the terms and conditions governing the relationship to a third
party. Also the items kept should not be released to a third party without due authorization by the customer. Based
on relationship between a banker and a customer terms and conditions on different banking services also vary. A
banker may allow special concession to an old customer compared to what is usually given to a new customer.
That's why a customer should operate his banking transactions in such a manner that the banker may trust the
customer while giving any loan or any other accommodation in future. The relationship mentioned is not a personal
relationship like friendship. The relationship is based on how the customer operates his or her account with the bank.
For example, if a banker finds one particular client frequently issuing cheques to different parties without having
sufficient balance in his or her account, the banker will not trust such a client if he seeks any loan from the same
bank, even if the customer is an old client having close relationship with the manager of the bank branch.

Proper uses of human resources:

Human resources are the prime resources on this planet Earth. Civilization on this Earth would not have been
possible if humans did not dwell on this planet. Human resources contain immense importance and play
fundamental roles in the development of a country. Skilled and trained human resources are necessary for proper
utilization of natural resources. Human resource is an active ingredient while natural resource is a passive one.
If proper use of human resources cannot be ensured in an organization that organization is bound to fail in achieving
its objectives. That is why in any organization utmost importance is given to human resource management. To
ensure proper use of human resources the first and the foremost principle is to employ a proper man or a woman in a
proper place in the right time. Proper man can be found either through recruitment of new personnel or through
training the existing human resources. Bangladesh is a densely populated country. If our human resources could be
properly utilized we would have been one of the prosperous countries in the world. Unfortunately, we have not been
blessed with proper leadership that could help turn this country into a real golden Bangladesh on the strength of our
vast human resources. Bankers’ role after flood After a flood the first and the foremost task is to rehabilitate
business houses and homesteads that are affected by flood. People who become homeless after a devastating flood
need to be rehabilitated. Rehabilitation is not possible without infusion of recapitalization into business and
providing money needed to rebuild the damaged houses. The government may provide emergency relief materials
like food and temporary shelters to the affected people. But, the government cannot afford to offer to the affected
people the long-term tools of rehabilitation's like loans for reestablishing businesses or rebuilding houses. Here
comes the banker who can bring succor to the needy, whoever he or she is---a businessman or a commoner. A
banker can bring real relief to the affected people by providing loans on both short-terms and long-terms.

Banking as a career for women

There was a time when teaching as a part-time job was deemed as the best career for women when ladies in our
societies had to live a secluded life. Conservative families did not appreciate the idea that their daughters or their
housewives attended public offices from 5 in the morning till 7 in the evening. But, time has changed. With neck
breaking competition and standard of living going up and up it is no more possible on the part of one male member
to support a family. So, women had to come out from their homes to find full-time jobs in public and private
factories and offices. Compared to males, females are patient and dexterous in works that demand focused attention
to details. Males are adventurous and suitable for careers like those in armed forces and females are softhearted and
suitable in jobs like those of needlework and teaching. Banking is a job that can be compared with needlework.
Banking as a career does not demand chivalry like in a job in the department of Fire Service. Anybody, male or
female, who is patient and courteous, is good in tedious task of bookkeeping and in demanding responsibility of
attending clients and customers of varied natures. That is why in most of the countries all over the world there are
more women than men working at all levels of banking industries. In Bangladesh too, women are excelling in their
jobs in banking sector.
Democracy and freedom of criticism Democracy requires citizens to tolerate others' efforts to participate in politics,
even if they promote political views that may not be acceptable to one or more groups of citizens or political parties.
Citizens' political tolerance is influenced strongly by the depth of their commitment to democratic values and by the
attitude they perceive about others. Robust democracies need citizens who will participate in politics. Interpersonal
trust and other features of political culture enhance citizens’ involvement in politics. Recent theories of social
science also emphasize the role of generalized interpersonal trust, membership in voluntary associations, and norms
of reciprocity in enhancing political participation and democracy. Only tolerance (which means freedom of
criticism) and democracy can free the world from the curse of racism, discrimination, xenophobia and related vices
with a view to properly addressing the human rights issues. Tolerance ensures justice for millions of human rights
victims around the world. Tolerance, freedom of criticism and democracy, as the basic principles of human
rights,were bequeathed to us in the aftermath of the barbarous acts of wars and conflicts of medieval civilizations. It
is tolerance that establishes democracy on strong foundation. Democracy without tolerance and criticism is bound to
give birth to anarchy.
Reading for pleasure:

Any work done as a duty or under compulsion is not pleasant. But, any work done as a pleasure or in liberty is
exciting. That is why we as children did not like reading our textbooks as much as we liked reading our storybooks.
So, teachers and guardians try their best to motivate children to derive pleasures from interesting lessons in the
textbooks. Once a child learns how to derive pleasure from mathematics or literature or philosophy he or she gets
addicted to reading books, both texts and non-texts. His or her road is then paved towards glories in future. Reading
for pleasure is the reason why even a poor rickshaw-puller, if he is literate, goes through a newspaper every
morning. A retired man finds immense pleasure in reading at his leisure time. A commuter enjoys a long journey if
he reads a book of interest. Reading becomes extremely pleasant if we can develop the habit of slow reading. Slow
reading helps increase our comprehension and pleasure. Reading as a pastime has a medical value too. People who
are voracious readers are less susceptible to blood pressure or heart attack. Reading book is as pleasant as listening
to music. Nowadays audio books of famous authors are available in the market. People spend hours listening to
audio books in i-pods, a new fashion to lessen tension.

Your idea of an ideal man:

My idea of an ideal man is based on three virtues a man or a woman should have. These three virtues are 01.
Empathy, 02. Empathy and 03. Empathy. The reason I have repeated the word ‘empathy’ three times is if all humans
could only empathize with others the world would have been a haven. The world is restless because everybody is
engrossed with only self-interests except a few who are dedicating their entire life for others. We humans are
basically greedy. We have destroyed the forests, killed the birds and animals, deprived our relations and neighbors
of their due rights. In some situations we are worse than animals. But, we humans are supreme creatures too and we
should be imbued with the idea that our prime objective is to play the role of an ambassador sent by God to
contribute for the welfare of this planet and its inhabitants. Considering the philosophy of empathy for all living
beings in this world I find Hazrat Muhammad (SM) and Mother Teresa as two of the few ideal persons who taught
us some precious lessons on humanity.

The present global recession:

The global financial crisis of 2008–2009 began in July 2007 when a loss of confidence by investors in the value of
securitized mortgages in the United States resulted in a liquidity crisis. That crisis prompted a substantial injection
of capital into financial markets by the United States Federal Reserve, Bank of England and the European
Central Bank. The TED spread (the difference between the interest rates on inter-bank loans and shortterm U.S.
government debt), an indicator of perceived credit risk in the general economy, spiked up in July 2007, remained
volatile for a year, then spiked even higher in September 2008 reaching a record 4.65% on October 10, 2008. In
September 2008, the crisis deepened, as stock markets worldwide crashed and entered a period of high volatility,
and a considerable number of banks, mortgage lenders and insurance companies failed in the following weeks. The
present financial meltdown, it is feared, will be a prolonged one affecting economies of both developing and
developed countries of the world. Too much greed, break-necking competition and extreme dependability on
uncertainties of securities like futures and hedging has given birth to the present crisis.

Role of a banker during a recession:

A banker to a businessman is what a food producer to a hungry man. Had there been no food producer the whole
humanity would have been vanished. Without a banker always ready to provide credit to his clients business would
not have been as vibrant as it is now. A banker, therefore, has to be alert and must keep himself or herself posted on
what is happening in the world of economics both at home and abroad. A banker should regulate the credit flows to
his clients in accordance with the market behavior. During the period of a recession a banker has a great role to play.
On one hand, he should make sure that his clients don’t indulge in investing money in a trade the products or
services of which may be of diminishing demands. And on the other hand, he must keep in mind that if his clients
stop producing products out of fear of an impending recession a lot of workers will be fired and as a bad
consequence other allied trades and industries may be affected. Such fears may have a knock-on effect on the
consumer confidence, further exacerbating the recession. During a recession governments adopt expansionary
macroeconomic policies by increasing government spending with a view to staving off business contractions. Like a
government, a banker should also make sure that both businessmen and consumers don’t
get panicky during or before a recession. So, a banker during a recession should take appropriate decisions as
regards to outflows of credits from his bank to the businessmen.