I.

Time Context: June 1985

II. View Point: Abdul Rahman, Controller

III. Major Policy Statement:

IV. Statement of the problem: Unsound banking practices committed by bank

officers and stockholders.

V. Objectives:

a.) Short range objective: To determine the extent of losses to the bank

and those who are responsible for it, in a 3 months time.

b.) Long range objective: To pay off innocent depositors in a 5 years time.

To allay public distrust, the Brunei government

is taking a stronger and bigger presence in the

bank in a 3years time to oversee recovery.

VI. Alternative Courses of Action:

ACA #1 – A regulatory body to act as over side for banking industry

ACA #2 –Transparency and clear set of rules governing bank officers and

stockholders need full disclosures

VII. SWOT Analysis:

Strength Weakness

- It is the largest of only - Lack of local investment

two local banks. - Lack of sound banking

- Investors are rich and practices due to lacks

have influence of regulation.

- Officers are seasoned bankers

Opportunity Threat

- Potential oversees - World wide recession

Investors or economic crisis

- Political interference

- Demographics limitation

- Competition from

Multinational banks

- Losing trust of depositors

in the bank

VIII. Areas of Consideration:

The factors that can help in analyzing and solving the case are the ff:

• Know about the nature of the business.

• History and personalities involve.

• The internal and external environment when the case happened.

• The main cause of the problem.

IX. Analysis of Alternatives:

ACA #1 – A regulatory body to act as over side for banking industry

Advantages Disadvantages

- A quasi government regulatory - Too much restriction

body can spot anomalies or might run counter to

irregularities before great losses to international standard

happened. and practices.

ACA #2 –Transparency and clear set of rules governing bank officers and

stockholders need full disclosures

Advantages Disadvantages

- It will restore investors and - In some way banking

depositors confidence in secrets and strategy

the bank. can easily fall into the

hands of competitors.

X. Decision Statement:

The group prefer ACA#1 because it is an independent body and does not

have any conflict of interest. Each powers and functions is created by law

and vested with adequate authority to protect public interest.

XI. Implementation Plans:

To implement the steps necessary to protect public interest would require

the following implementation plans.

Tactics (Short term plans)

1. To designate a group of persons with proven expertise and probity

to investigate and look into the books and accounts of the bank.

2. To make a comprehensive report of its findings and to determine

civil and criminal liabilities of those involve.

3. Issue recommendation base on its findings for a possible

rehabilitation of the bank.

Strategies (Long term plans)

1. Based on the findings of investigation into the bank a

comprehensive report must be submitted to the regulatory body yet

to be formed.

2. Upon the creation and inception of the regulatory body it should

formulate rules and regulations that shall ensure transparency and

safeguards from public interest.

XII. Lessons Learned from the Case:

Finance- The banking industry is necessarily a repository of public trust

essentially it deals with high finance and investments. The officers of the

bank specially the major stockholders should no be allowed to exceed the

authority by excessively borrowing from their own banks.

Management- Prudence is the better part when it comes to banking and

finance. Management should be cautious not to over extent or expose

their risk to just small group of person or industry and also decision

making is important factor for the success of the organization.

Human Resource- Is also vital part for consideration because any kinds

of business need people to operate. It is therefore important to train and

develop skilled personnel. Human Resources seeks to achieve this by

aligning the supply of skilled and qualified individuals and the capabilities

of the current workforce, with the organization's ongoing and future

business plans and requirements to maximize return on investment and

secure future survival and success.