Csr Polytechnic Case Study Essay

Statement of the problemConsidering that polytechnic saving margin Inc. A scrimping desire suffering from a cringe-evoking operational losses and capital deficiency due to its weak management, How would PSBI improve its unsatisfactory financial conditions and critically deficient performance? Objectives-To ensure the fulfilment of BOD in their duties and responsibilities under BSP circular 283 -To hire 3independent qualified ethical and depositworthy workers in replacement of the terminated president and the leniency of its successor -To comply BSP the infused additional capital of P5 Million-To immediately infuse the 57.4Million in the new capital to comply with the lower limit capital requirement for tightfistedness banks -To Strengthen the Banks risk management function in order to regain the trust back from its depositors and investorsAreas of consideration*EXTERNAL1. Legal/ semipolitical in its failure in fiduciary trust and confidence in financial institutions rather to h elp the capital markets and the economy it causes a great do on individual by the PBIs disregard of such corporate governance precept -PSBI must meet its required amount to enable to spread over its operation as a thrift bank but because of deficiency it can serve as a rural bank which has lesser minimum requirement that being a thrift bank given under BSP circular 283 BOD fulfil their duties and responsibilities2. Economy Polytechnic Savings Bank, Inc. operating as an economy in the use of resources created to serve as a community focused which needed P82M to play along operation and save thrift bank from tapered capital*Operating External factorsa) Workforce PSBIs BOD had no banking look, doing unethically acts or anomaliesb)Customers- individuals and small businessesc) Competitors- Other banksB. Internal Aspects1. Financial Aspects-It is said that PSBI has its unsatisfactory financial condition that the bank is unstable and cannot withstand adverse business conditions and f luctuations because of its poor financial ratios which it requires the amount of P55.2milion capital to gain and to fully continue its trading operations due to capital deficiency and loss. 2. Operational-PSBIs operation resulting from memorandum of undertaking (MOU) turned from bad to worse3. Management-the various financial anomalies undertaken by the management were found during the fraud and forensic audit of the bank therefore PSBIs improving such weak management because of failure in relapse functions and supervision on affairs inside bank premises.-A complete failure in the fiduciary responsibilities of the officers swotSTRENGTHS WEAKNESSES-Wayward Group of companies (mother of PSBI)-failure in fiduciary trust-BOD had no experience in banking-Poor financial ratiosOPPORTUNITIES THREATS-Rehabilitation program-buyers, investors, depositors -adverse business conditions and fluctuations-stop operation as a thrift bankALTERNATIVE COURSES OF ACTIONA. Sell the bank instead working on the impression that the bank performance would not improve due to weak managementPros-To save thrift bank from capital deficiency with four dominance buyers (with an asking price of P10million to P30million)Cons-considering that P1.00 selling price for the bank would not even be a bargain -Not one expressed any real engagement to complete the purchase among these potential buyersB. Focus on Rehabilitation programPros Program designed to address the capital deficiency and operationallosses of the bank Cons Considering that PSBI has no choice left because PSBI is undergoing from a cringe-evoking operational losses and capital deficiency due to its weak management C.Improve the importance of corporate governance principle in Fiduciary trust and confidence in financial institution Pros-help strengthen the banks risk management function-To regain the trust back from other depositors and investors-To save the bank from its financial conditions and critically deficient performance-To help capital markets, economy, and each individual lives-To continue operation as a Thrift bank-To improve good governance, managerial and operational factors outside and inside bank premisesCons-considering theres a complete failure in the fiduciary responsibilities of the officersD. Conduct annual examinationPros -to have an annual report on financial operations showed on investors -Must encourage and provide an accurate and timely informations to their investors about financial status -To have a proper screening and access to PSBI banks employees and workers information in the internal management fields in actively oversight functions and supervise their affair of the bank -To avoid fraud and forensic audit of the bankCons-Considering that The Internal control system, which were supposed to provide a check and balance were all overridden to disregard