Introduction

1
1.1 Origin of the report:

As a student of the BBA Program at School of Business, Department of Finance,

Asian University of Bangladesh, every student has to conduct a practical orientation
in any organization for fulfilling the requirements of the 3 months Internship
Program. The BBA program mainly focuses on the theoretical aspects of the business
practices. The Internship program is intended to provide a student the opportunity to
practice his/her knowledge of theory in the field of practical life. This report is based
on my internship experience at Rupali Bank Limited.

1.2 Rationale of the study:

In order to fulfill the requirement of the Internship program I chose Rupali Bank
Limited. The Human Resource Division (HRD) of Rupali Bank Limited placed me to
its Uttara Model Town Corporate Branch.The topic of my report is “An Evaluation of
the Corporate Social Responsibility Practices in Rupali Bank Limited”. During this
period I tried to get familiarize myself with the theoretical concept and practical
process of Banking Activities and CSR practices in Rupali Bank Limited.

1.3 Objectives of the report:

There are two types of objectives of the report. One is primary objective and the other
is

Secondary objective.

Primary Objective:
The primary objective of this report is to use the theoretical concepts, gained in the
classroom situations, in analyzing real life scenarios. This is also a partial requirement
of the BBA program. This objective is basically met by remaining attached with a
reputed organization and by gaining some real life experiences, so that it adds value to
the knowledge base of me.

2
Secondary Objectives:
The Secondary objectives of this Study are as follows:

 To observe and understand the activities of the different departments of the host
organization: Rupali Bank Limited (RBL)
 To determine the nature and extent of CSR practices in RBL.
 To provide a thorough understanding of the CSR reporting by RBL in compliance
with the Bangladesh Bank Guidelines.
 To assess the need of proper CSR disclosures.
 To assess the need to improve CSR activities of RBL.
 To provide suggestions to ensure better CSR practices in RBL.

1.4 Scope of the study:

Since the selected topic of my report is “An Evaluation of the Corporate Social
Responsibility Practices in Rupali Bank Limited”, I have got the opportunity to
collect different documents relating to activities of RBL and its CSR initiatives.
Though I was placed to Uttara Model Town Corporate Branch, the officials of Central
Accounts Division (CAD) of Head Office who are responsible for CSR reporting and
disclosure about CSR practices helped me to prepare a constructive report by
providing relevant paper and files for which I was highly encouraged. Besides this I
have faced many difficulties to prepare a report on this topic. To prepare this report it
requires much time, much contacts, careful attention and huge study.

1.5 Methodology of the study:

To prepare the report, I have collected data from the primary and secondary sources.
Data have been collected by oral interviewing the responsible officers. They also gave
me annual report, annual budget of CSR and other documents.
After collecting data from the interview and material, the data was first carefully
scrutinized. Then the data was organized as required. In order to make the study
effective and efficient, following two sources of data and information have been used
widely.

3
 Sources of Data

Primary Sources Secondary sources


. Face to face conversation with the  Annual report of the RBL and
head of the CAD Division, Bangladesh Bank.
respective officers and Staff of  Annual Budget of the RBL.
RBL.  Various document of the RBL.
 Relevant document’s studies as  Extensive literature search on
provided by the officers the basis of these documents of
concerned. publication.
 Observation of CAD Division of  Web site of NBR, Bangladesh
RBL. Bank and RBL.
 Discussion with my supervising  Circulars and reviews of
teacher. Bangladesh Bank
 Newspaper, journal, articles etc.

1.6 Limitation of the study:

Though the report was prepared with highest level of dedication and sincerity, still it
is not free from some drawbacks, like:

 Time is a major obstacle here. It was very difficult for me to go through

everything while preparing the report. Much information was overlooked
though it was not the intension.

 Employees in the bank are immensely busy all the time with clients.
Sometimes it

is tough for them to find a break and provide assistance from their busy schedule even
if they are willing to.

 Confidentiality is a major factor. Much information is not allowed to be given

as it is a matter of secrecy. Any kind of misplacement of any information can

4
 cause the bank to face difficulties. Information if disclosed to the competitors,
the bank can lose its competitive advantage.

 Lack of primary and secondary data is another limitation.

 Lack of sufficient previous year’s information in an organized way is also an

obstacle.

5
Literature Review

6
2.1 Definition of CSR

CSR can be understood in terms of corporate responsibility, but with greater stress
upon the obligations a company has to the community, particularly with respect to
charitable activities and environmental stewardship.
“Social responsibility (is the) responsibility of an organisation for the impacts of its
decisions and activities on society and the environment through transparent and
ethical behaviour that is consistent with sustainable development and the welfare of
society; takes into account the expectations of stakeholders; is in compliance with
applicable law and consistent with international norms of behaviour; and is integrated
throughout the organisation.” (Working definition, ISO 26000 Working Group on
Social Responsibility,
Sydney, February 2007)
A key point to note is that CSR is an evolving concept that currently does not have a
universally accepted definition. Generally, CSR is understood to be the way firms
integrate social, environmental and economic concerns into their values, culture,
decision making, strategy and operations in a transparent and accountable manner and
thereby
establish better practices within the firm, create wealth and improve society.

The concept and business awareness of CSR has evolved considerably since it first
emerged in the 1950s (de Bakker et al., 2005). Over this time, the concept has
developed from relatively uncoordinated and voluntary practices into more explicit
commitments in response to stakeholder pressures and eventually into ongoing future
commitments. With these changing perspectives of CSR a significant body of
literature has been produced but the problems of definition remain (Clarkson, 1995).

Due to the difficulties in defining CSR, alternative conceptualizations have been

developed, representing various aspects of the same concept of corporate “doing
good”.

7
: CSR is a stakeholder-oriented concept that extends beyond the boundaries of the
organization, driven from an ethical understanding of the responsibility of the
organization for the impact of its business activities, seeking in return the willingness
of society to accept the legitimacy of the business (based on Gray, Owen, & Adams,
1996).

2.2 Stakeholders:

Stakeholders may be defined as ‘‘those groups who have a stake in or a claim on the
firm’’ (Freeman, 1984, p. 54) or alternatively as ‘‘groups and individuals the concept
of stakeholders is central to CSR who can affect, the achievement of an organization’s
mission or affected by’’ (Evan and Freeman, 1988, p. 97).
CSR can involve a wide range of stakeholders:

Source: http://strategis.ic.gc.ca/epic/site/csr-rse.nsf/vwapj/stakeholder.txt/$FILE/stakeholder.txt

Critical eye on corporate actors or furthermore, include all those entities that maintain

and the stakeholder concept may extend to a wider perspective (Bomann-Larsen and

Wiggen, 2004). The expectations of society and Ambitions of the organization and

Stakeholders, thus, form the link between the aims (Whetten et al., 2002).

Organization success and survival hinges on the organization’s ability to generate

sufficient wealth stakeholder theory also emphasizes that, value for its primary

stakeholders, though not exclusively for shareholders or satisfaction (Clarkson, 1988).

For example, Post et al. (1996) for the organization to realize or services for

8
customers to be the primary stakeholders or consider those whose direct relationships

are essential its mission in producing goods. Political actors who support the mission

by providing their tacit approval of the organization’s activities and thereby making

them acceptable and giving the business credibility by including social secondary

stakeholders. Local communities, governments, and nongovernmental organizations

such secondary stakeholders may include (NGOs).

2.3 Schools of thoughts in CSR

Based on two shared ideas most definitions of CSR: (1) these responsibilities

apply not only to shareholders but also to stakeholders, in other words, everyone who

has a stake in the company's actions and (2) companies have responsibilities that go

well beyond profit-seeking (economic responsibilities) or merely complying with the

law (legal responsibilities); (Freeman, 1984).

Another assumption starting the Milton Friedman instruct who can draw

the consideration process correct reverse to Adam Smith's determining The prosperity

of countries  will direct to the "imperceptible hand" that directs business to supply

broader civilization with the merchandise and working people require.  Others,

commencing the contradictory end of the theoretical range, would dispute that

undertaking "good" is merely the exact mania to do (Strategic Direction. 2008).

would take the view that customer relations were best served if it simply posted a

profit. (Gande, Fortanier and Tulder, 2009).

2.4 Corporate Social Reporting in Emerging Economies:

Historically, the study of corporate social responsibility (CSR) reporting has largely
been within the context of Western economies. Most of the CSR studies in emerging
economies have concentrated on the Asia-Pacific and African regions. Most of these

9
studies are descriptive in nature, used content analysis method and measured the
extent and volume of disclosures contained within the annual reports. Moreover, most
of these studies provide indirect explanation of the reasons behind CSR.

However, many large corporations now claim to be taking steps to improve their
environmental and social performance within developing countries. Dr Ataur Rahman
Belal, Aston Business School, Aston University, UK, using the lens of stakeholder
theory, in his book ‘Corporate Social Reporting (CSR) in Emerging Economies: A
Review and Future Direction’ (2009) examined whether the current practice of CSR
reporting in developing countries is motivated by a desire to discharge accountability
to all relevant stakeholders or whether it is being driven by the imperative of
advancing corporate economic interests. The author considered the current CSR
reporting practices in a number of developing countries, with particular attention
given to illuminating a case study of Bangladesh. He made theoretical considerations
within the context of Bangladesh and an analysis of social disclosures by Bangladeshi
companies with managerial perceptions of CSR reporting in Bangladesh and in other
developing countries.

.This was the first review of CSR studies purely from the emerging economy
perspective. On the basis of this analysis the present authors suggested some
important future research questions. In addition, it provided a ‘one stop service’ to the
existing and future researchers undertaking CSR research from the emerging
economy perspective without re-inventing the wheels.

10
Guide Lines & Policy Support
Regarding CSR

11
3.1 Role of Bangladesh Bank to formulate policy in
encouraging CSR practice:

Bangladesh Bank (BB) monitors CSR practices of Banks and financial institutions
considering an additional dimension of their management performance. BB has taken
initiatives to formalize CSR on June 01, 2008. Banks can make CSR contribution
through its core business activities, diversity efforts, volunteerism, health care, sports,
environment, creation of social awareness, rehabilitation of distressed people to
mitigate human sufferings. These are some of the major areas where banks and other
financial institutions carry out social and philanthropic activities. CSR practice can be
made by banks and financial institutions in their own internal operations. Banks can
contribute in major CSR activities by speeding up financial inclusion of the socially
disadvantaged group.

BB has suggests some areas where banks can make CSR contribution as financial
inclusion discussed following:
-Self-employment credit and Small and Medium Enterprise (SME) lending programs,
taken up solo or in association with locally active Micro Finance Institutions (MFIs),
designed to create productive new on-farm / off-farm employment, such initiatives are
of particularly urgency for regions with endemic high seasonal unemployment;
-Financing programs for installation of biomass processing plants (e.g. biogas plants),
solar panels in rural households, for waste recycling plants in locations populated by
urban poor, and for Effluent Treatment Plants (ETPs) in manufacturing
establishments;
-Credit programs for diversified production of crops, oilseeds, spices, vegetables,
fruits etc. by rural households, financing the growers directly or through suitable
intermediaries in the value chain. Credit support for combinations of farming
activities ( like co-production of a minor crop with a major one, fish/duck farming
with aman rice of deepwater variety in low lying fields), may also be well
worthwhile;

12
-Mobile phone based/local MFI outlet supported programs promptly delivering
remittances from migrant workers to recipients in remote rural households; programs
for card based/ mobile phone based delivery of financial services to households;
-Financing programs supporting folk crafts, folk musical and performing arts, aimed
at promoting domestic tourism and markets in cultural products/events besides
income and employment for the population groups involved.
[DOS CircularNo.01, June1, 2008]

3.2 Green Banking in Bangladesh:

The state of the environment in Bangladesh is rapidly deteriorating. In order to protect

environmental degradation and ensure sustainable banking practices in Bangladesh,
an indicative Green Banking Policy and Strategy framework for banks has been
developed by Bangladesh Bank (BB).

A Green Bank is an ethical bank, a socially responsible bank or a sustainable bank

efficient in using water, light, air, energy and resources. Green Banking means
providing innovative green products by the green banks that cover financial services
to support the activities that are not hazardous to environment and help conserve the
environment. Green finance contributes to the transition to resource-efficient and low
carbon industries i.e. green industry and green economy in general. Green banking
products are those that help create a favorable impact on environment. The banking
sector can play a significant role in protecting the environment by financing support
to high impact environmentally sensitive sectors. Banks, by using their commercial
lending and securities underwriting, are in a position to catalyze the necessary
transition to an economy that minimizes air pollution, relies on energy efficiency and
low/no carbon energy sources.

BB previously advised banks to provide their clients with utmost assistance when
opening Letters of Credit (L/C) for the installation of Effluent Treatment Plants (ETP)
in industrial units; financing solar energy, bio-gas and ETP; complying with the
guidelines on Corporate Social Responsibility (CSR) (banks have been asked to
concentrate on linking CSR at their highest corporate level for ingraining
environmentally and socially responsible practices) and engaging with borrowers in

13
scrutinizing environmental and social impacts. Banks have been brought under the
purview of e-commerce with a view to providing the customers with online-banking
facilities including payments of utility bills; money transfers and transactions in local
currency through the internet. BB has launched a refinance programme of Taka 2.00
billion for bio-gas plant, solar power plant, ETP and Hybrid Hoffman Kiln (HHK) in
brick fields.

Considering the adverse effects of climate change, banks have been advised to be
cautious about the impacts of natural disasters and encourage farmers to cultivate
salinity resistant crops in salty areas, water resistant crops in the waterlogged and
flood-prone areas, drought resistant crops in drought prone areas. They should also be
encouraged to use surface water instead of underground water for irrigation, organic
fertilizer and natural insecticides instead of chemical fertilizer and pesticides.

Banks in Bangladesh are required to implement Green Banking activities through the

following three phases:

Source: Bangladesh Bank Annual Report, 2010-2011

Banks have been advised to submit the first ever quarterly report of their green
banking initiatives/practices under the Phase-I programme on 30 June2011basis with 15
July 2011 and reports of the subsequent quarters within 15 days of the respective

14
quarter's end. Banks shall report on the initiatives/practices to BB and disclose
information on their websites as well.
Preferential treatments for Compliant Banks have been taken into consideration. BB
will award points to banks on the criteria of "management" while computing
CAMELS rating where there will ultimately be a positive impact on overall rating of a
bank. BB will declare the names of the top ten banks for their overall performance in
green banking activities on the BB website. BB will actively consider green banking
activities/practices of a bank while according permission for opening new bank
branches. SME/Agriculture bank branches to be established/ opened after 20 June
2011 will be required to be eco-friendly ensuring that a solar panel is installed at the
branch.
[Bangladesh Bank Annul report, 2010-2011]

3.3 Tax Rebate on Corporate Social Responsibility (CSR)

Activities:

Tax concession indicates that the Government sacrifices the amount which could be
earned as revenue. A corporate entity was given a tax rebate at the rate of 10% of
CSR (Corporate Social Responsibilities) expenditures.

For example, if a company has a taxable profit of Tk. 1000000/- and the company is
subject to 40 percent of tax, then its tax liability would be Tk. 400000. If the
company’s CSR expenditure is Tk. 100000/-, then it would be get a rebate of Tk.
10000/- (10 percent of Tk. 100000/-).Therefore, the company’s tax liability would be
Tk. 390000/- ( Tk. 400000/- Tk. 10000/-).
There was no ceiling of CSR expenditure in AY2010-2011. Now the ceiling has been
fixed at Tk. 8 crore or 20% of total income, whichever is lower.

3.3.1 List of CSR Activities: AY 2011-2012 [new SRO No. 229-Ain/Aykar/2011,

dated 04.7.2011 u/s 44(4)(b)]

(1) Donations for redressing the hardships caused by natural calamities such as
cyclone, earthquake, tidal wave and flood channelled through Government
organizations;
(2) Donations to organizations engaged in establishment and management of old
persons’ homes;

15
(3) Donations to organizations engaged in the welfare of mentally or physically
handicapped;
(4) Donations to educational institutions run for the purpose of education of
rootless children;
(5) Donations to organizations engaged in projects on accommodation for the
slum-dwellers;
(6) Donations to social organizations engaged in publicity of movements relating
to women’s rights and anti-dowry practices;
(7) Donations to organizations engaged in feeding and clothing and sheltering and
rehabilitation of orphan/rootless children;
(8) Donations to organizations engaged in research on independence war,
regaining and expansion of the consciousness of the independence war and the
act of honourable living of the freedom fighters;
(9) Donations to organizations engaged in healthsome sanitation in Chittagong Hill
Tracts, char1 areas and areas surrounding breaking up of banks of river;
(10) Grants to organizations engaged in treating cleft lips, cataract, cancer and
leprosy;
(11) Grants to organizations engaged in treating acid victims;
(12) Donations to hospitals engaged in providing free medical treatment to poor
patients and specialized for developing the quality of treatment, such as cancer,
liver, kidney, thalassemia, eye and cardio;
(13) Grants to Public Universities;
(14) Expenditure incurred through educational institutions recognized by
Government for providing technical and vocational education for meritorious
poor students;
(15) Money invested in establishing lab for providing training on computer or
information technology and in establishing infrastructure or in purchasing
educational materials for implementing English education in public/private
educational institutions (under Monthly Pay Order or MPO);
(16) Donations to organizations engaged in providing technical and vocational
training to unskilled or semi-skilled labour for export of human resources;
(17) Donations to organizations involved with infrastructure of sports and provision
of training at national level.
1
A strip of sandy land rising out of the bed of a river or a sea above the water-level,

16
17
3.3.2 New CSR Activities inserted under SRO No. 229-Ain/Aykar/2011, dated
04.7.2011:

(18) Donation to national level institution set up in memory of the liberation war;
(19) Donation to national level institution set up in memory of Father of the Nation;
and
(20) Donation to Prime Minister’s Higher Education Fund.

3.3.3 CSR Activities withdrawn by SRO No. 229-Ain/Aykar/2011, dated 04.7.2011:

However, five areas for CSR (allowed under SRO No. 270-Ain/Aykar/2010, dated
01.7.2010) for AY 2010-2011 have been withdrawn:
(1) Donations to organizations engaged in clean water management;
(2) Donations to organizations engaged in afforestation;
(3) Donations to organizations engaged in beautification of cities;
(4) Donations to organizations engaged in waste management; and
(5) Donations to organizations distributing freely at the level of use of birth-control
products with a view to solving the population problem and to conduct camps
for voluntary sterilization.

3.3.4 Conditions for Tax Rebate on CSR Expenditures:

The conditions for this tax rebate are:
(1) The company which will be willing or motivated to obtain tax rebate through
CSR activities:
(a) shall have to pay regular salary and allowances to officers and employees
worked and shall have arrangement of waste treatment plant in the
factories operated by it, particularly in case of production of industrial
products;
(b) shall pay income tax, value added tax (VAT) and customs duty regularly.
(c) can make donation or provide money within the scope of CSR only to
organizations approved by the Government; and
(d) shall comply all the provisions existing in the Labour Code.

18
(2) The money spent or expenditure incurred on CSR by a corporate entity cannot
be treated as allowable expenditures in Production Account, Trading Account
or Profit & Loss Account.
(3) Necessary evidences in relation to the fact that money claimed for CSR has
actually been spent are to be submitted to the concerned Deputy
Commissioner of Taxes (DCT).
(4) The corporate entity shall have to intimate the National Board of Revenue the
plan on CSR activities adopted and obtain a certificate on income tax rebate in
relation to that.

19
An Overview of RBL

20
4.1 Background of Rupali bank Limited:

The Government of the Peoples Republic of Bangladesh ( GOB) formed Rupali Bank
Limited on 26 March, 1972 under the Bangladesh Bank’s Nationalization order of
1972 ( P O number 26 of 1972) by merging the three former Pakistani commercial
bank’s i.e. Muslim Commercial Bank Ltd. , Australasia Bank Ltd and Standard Bank
Ltd. Those were operating in the then East Pakistan. The bank emerged as a Public
Limited Company incorporated under the Companies Act 1913 on December 14,
1986 after taking over and acquiring the undertaking and business of Rupali Bank
with all its Assets, Liabilities, Benefits, Rights, Powers, Authorities, Privileges,
Borrowings and Obligations of former corporate body. RBL has now become a sate-
owned commercial bank (SCB) through its vendor’s agreement dated 15 November
2007.

4.2 Present Business Philosophy:

The philosophy of the present management of RBL is to develop the bank into an
ideal and unique banking institution. The perception is that RBL should be quite
different other privately owned and managed commercial bank operating in
Bangladesh. RBL is to grow as a leader in the industry rather a follower. The
leadership will be in the area of service; constant effort being made to add new
dimension so that the clients can get “something additional” in the matter of services
to the commensurate with the needs and the requirements of the country’s growing
society and developing economy.

4.3 Vision:

RBL’s Vision is to expand loyal customer base by being known as the financial
partner of choice that constantly exceeds customer expectations.

21
4.4 Mission:
RBL’s mission is to:
 Develop long-term relationships that help customers achieve financial success.
 Offer rewarding career opportunities and cultivate staff commitments.
 Uphold ethical values and meet its customer’s financial needs in the fastest
and most appropriate way and continue innovative works in order to achieve
human resource with superior qualities, technological infrastructure and
service packages.

4.5 Core Values:

* Social Responsibility- care for and contribute to their communities

* Performance- measure results and reward achievements
* Integrity- uphold trustworthiness and business ethics
* Respect- cherish every individual
* Innovation- encourage creativity
* Teamwork- work together to succeed
The first letters of the initial words form “SPIRIT” and carry equal importance.

4.6 Strategic Objectives:

 Develop a customer oriented service culture with special emphasis on

customer care and convenience.
 Increase market shares by following a disciplined growth strategy.
 Achieve a significant share of deposit and credits from the existing and niche
markets.
 Leverage technology platform and pen scalable systems to achieve cost-
effective operations, efficient MIS, improved delivery capability and high
service standards.
 Develop innovative products and services that attract targeted customers and
market segments.

22
  Maintain a high quality assets portfolio to achieve strong and sustainable
returns and to continuously build shareholder’s value.
 Explore new avenues for growth and profitability, particularly by diversifying
loan portfolio through structured finance and expansion of retail and SME
financing.
 Strengthen the bank’s brand recognition.

4.7 Corporate Profile at a glance ( as on 31st December, 2010):

Name of the Company : Rupali Bank Limited
Chairman : Ahmed Al Kabir, PhD.
Managing Director : M.Farid Uddin
Company Secretary :Md. Shahjahan Khandaker
Legal Status : Public Limited Company
Date of Incorporation : 14 December 1986
Registered Office :34, Dilkusha Commercial Area,
Dhaka-1000,Bangladesh
Authorized Capital :TK. 700 Crore
Paid up Capital : TK. 125 Crore
Reserve & Retained Earnings: TK. 420 Crore

Credit Rating by CRAB (2009): Long Term- BB3

Short Term-ST3
National Support-AAA

Number of Employees : 4503

Number of Branches : 492
Number of Subsidiary Companies: 01 (Rupali Investment Limited)
SWIFT BIC :RUPBBDDH
Website :www.rupalibank.org
E-mail :rblhocom@bdcom.com

23
 info@rupalibank.org

4.8 Five Years Performance at a Glance

Amount in
crore
Particulars 2010 2009 2008 2007 2006
Financial Performance
Interest income 555.26 497.86 409.06 342.25 371.92
Interest expenses 346.28 323.88 308.05 302.29 306.80
Net interest income 208.88 173.98 101.01 39.96 65.12
Non-interest income 270.10 226.37 175.91 392.05 111.93
Non-interest expenses 234.30 190.48 162.41 150.63 151.58
Net-non interest income 35.80 35.89 13.50 241.42 (39.65)
Profit before provision 244.68 209.87 114.51 281.38 25.47
and tax
Profit for loans and others 102.11 43.02 27.10 1383.12 11.00
Profit after provision 142.57 166.85 87.41 (1,101.74) 14.47
before tax
Provision for tax 82.54 - - - -
Profit after tax 60.03 166.85 87.41 -1,101.74 14.47

24
Financial Position
Authorized capital 700.00 700.00 700.00 700.00 700.00
Paid-up capital 125.00 125.00 125.00 125.00 125.00
Total shareholders’ equity 1415.15 (558.18) (816.91) (1054.91) 32.87
Deposits 9112.38 7380.34 7028.05 7244.61 6783.21
Borrowings 26.95 33.72 2.33 3.01 3.74
Other liabilities 1888.98 1923.26 1924.97 1872.86 721.47
Total liabilities 11028.30 9337.32 9048.1 9206.11 7591.19
Investments 1571.72 1430.30 1254.57 1409.06 1206.82
Loans and advances 6604.90 5234.42 4903.00 4708.03 4570.95
Property, Plant and 952.07 233.25 232.33 52.98 51.51
Equipment
Other assets 1971.64 775.57 702.18 868.2 689.71
Net current assets 563.69 667.99 (617.10) (1,119.85) (508.24)
Earning assets 7975.20 6125.72 5070.81 4722.38 5117.92
Total assets 12443.45 8779.14 8231.18 8151.20 7624.05
Capital Measurement
Total risk weighted assets 11140.17 8211.27 4907.05 3578.99 4557.88
Core capital (Tier-1) 368.88 (899.83) (1038.93) (1126.34) 260.00
Supplementary capital 686.40 187.15 176.4 64.60 36.00
(Tier-2)
Total capital 1055.28 (712.68) (862.53) (1061.74) 296.00
Required capital 1002.62 656.90 490.71 357.90 410.21
Capital excess/(shortfall) 52.66 (1369.58) (1353.24) (1419.64) (114.15)
Foreign Exchange Business
Export 849.00 745.81 728.42 639.88 696.00
Particulars 2010 2009 2008 2007 2006
Import 6024.47 2519.41 2058.97 1985.67 1484.00
Remittance 1985.14 2231.17 2164.27 1889.43 1804.97

25
Other Information
Number of employee
Officers 3457 3148 2830 2749 3006
Staff 1046 1381 1439 1681 1747
Total 4503 4529 4269 4430 4753
Number of zonal office 25 25 25 25 25
Number of corporate 7 7 7 7 7
office
Number of foreign 163 160 160 160 160
correspondents
Number of branches 492 492 492 492 492
Number of shareholders 3578 5150 5396 5358 5199

4.9 Management Hierarchy:

Figure: corporate organogram

4.10 Product Line:

4.10.1 Deposit schemes

26
--Savings Deposit
--Current Deposit
--Short Notice Deposit
--Time Deposit
--DPS
--Rupali Deposit Pension Scheme
--Festival Deposit
--Call Deposit
Interest Rates

SL No. Types of Deposit Interest Rate per annum

1. Savings Deposit 4.50%
2. Short Notice Deposit 3.50%
3. Time Deposits
a)   3 months & above but less than 67.50%
7.75%
months
8.00%
b)   6 months & above but less than 1 year
8.50%
c)   1 year & above but less than 2 years
d)   2 years & above but less than 3 years
4. Deposit From foreign Remitance 6.00%
5. Rupali Bank Deposit Pension-Scheme 2 6.50%
 * The rates of interest are changeable from time to time depending upon market competition.

4.10.2 Loans & advances:

General Products
 Cash credit(Hypothetical)
 Cash credit(Pledge)
 Overdraft (OD)
 Loan against FDR
 Loan against Deposit Schemes
 Industrial Project Loan (Long & Multi Term)
 Short Term Loan
 Syndicate Loan
 Housing Loan-General and commercial
 Personal Loan/ professional Loan
 House Loan
 Self Reliance and special Program Loan

27
  Local bank Guarantee
 Loan under Equity Entrepreneurship Fund (EEF)

Small and medium Enterprise Loan (SME)

 SHOHOJ
 SHULOV
 BABOSHAYEE
 MAJHARI

Small Enterprise Financing

Manufacturing
 Fixed Assets Financing
 Working Capital Financing

Trading & service

 Fixed Assets Financing
 Working Capital Financing

Rural and agro credit

 Young Farmer’s Loan
 Solar-Energy and Bio-Gas Establishment Loan
 Fishery Loan
 Shrimp Cultivation Loan
 Goat/Sheep Rearing Loan
 Poultry Loan
 Dairy Loan
 Loan Against Crop Storage in Silos
 Small Loan
 Micro-Credit
 Micro-Credit for the Handicapped
 Loan for Tree Plantation
 Peas, Bean, Maze and Spices Loan

Other Loans
 Bank-NGO Linkage Credit
 Loan Against Share/Debenture

28
  Loan Against Brickfield/ Gold Ornaments
 Loan for Preservation of Potatoes in the Cold Storage
 Transport Loan/Car Loan
 Woman Entrepreneur Financing Program
 Consumer Credit/Travel Agency and Diagnostic Centre Business Loan

4.11 Branch Network:

Rupali Bank has 492 existing branches and some other proposed branches all over
the Bangladesh to provide better service to their valuable customers. The present
status of the branches network by zone is:

Zone No. of Branches

Dhaka Central 21
Dhaka North 24
Dhaka South 21
Chittagong East 27
Chittagong West 22
Rajshahi 22
Sylhet 27
Khulna 28
Kushtia 7
Rangpur 25
Dinajpur 15
Comilla 23
Feni 18
Noakhali 22
Narayangonj 13
Mymensingh 20
Jamalpur 9
Barisal 26
Patuakhali 9
Faridpur 18
Bogra 28
Jessore 15
Pabna 9
Tangail 9

29
4.12 Uttara Model Town Corporate Branch of Rupali Bank
Limited:

Uttara Model Town Corporate branch of Rupali Bank Limited is a profit earning
branch. It was established in12th October, 1988. It is situated at the ground floor of
Nawab Habibullah Ideal School Bhaban, Plot no,-02, Shahjalal Avenue,setor-4,
Uttara, Dhaka-1230. It is a very important place as the place is becoming a more
commercial area day by day.The Branch has 14 Officers of which the Head of the
Branch Md.Ketab Ali Mondol is an assistant general manager of Rupali Bank Limited
.The Branch has 1 Senior Principal Officers, 2 Principal Officers, 2 Senior Officers
and 8 Officers. Also the branch has 3 office assistants and two security guards. The
workforce of this branch is very much co-operative both to each other and to the
clients.

30
4.12.1 Hierarchy of Rupali Bank Limited in Uttara Model
Town Corporate Branch:

The following is the hierarchy of Uttara Model Town Corporate Branch of Rupali
Bank Limited.

The assistant general manager is full for the activities of the bank and accountable for
the day-to-day activities of his branch. Under him, the Senior Principal Officer is
working. He supervises all the operations of each department. Especially the

31
communication process with the Head office is maintained by him. Then two
departments have their in-charges, who supervise the activities of respective
departments.

4.12.2 Divisions within Uttara Model Town Corporate Branch

This branch has two divisions as the following:

1. General Banking (GB) Division &
2. Credit Division

1. General Banking Divisions

The main functions of this division are:
 To open & maintain account of customer
 To provide local & foreign remittance service
 To provide online branch Banking service
 To offer different deposit Schemes
 To provide other services like- Clearing service, Cash service, Cheque Book
Issuance and Stop payment, Deposit encashment, Providing Bank Statement,
ATM Service etc.

2. Credit Division
This department is responsible for the following jobs:
 Meeting the requirements of Head Office and Customers of Credit to
cooperate with other departments for smooth operation
 Preparing CIB Statements
 Preparing Credit Proposal and Statement
 Administration of Retail Credit
 Monitor and follow up the loans and advances provided by the bank

32
Project Part-CSR
Practices in RBL

33
5. Corporate Social Responsibility Practices of Rupali Bank
Limited:

Rupali Bank Limited (RBL) has been playing a pioneering role in implementing
social and philanthropic programs to help disadvantaged people of the country.
Education, healthcare, human resource development, conservation of nature, creation
of social awareness, rehabilitation of distressed people and such other programs to
mitigate human sufferings are some of the important areas where the bank carries out
its social and philanthropic activities. RBL has devised several special deposit and
investment
products for the less fortunate segment of the country as part of its CSR activities.

The bank has formed a five members CSR committee headed by the Managing
Director to oversee the overall activities and management of the CSR fund of the
bank. Mainly,RBL renders various services as CSR since 2010. Before 2010, RBL
reported in its annual report about their responsibility of performing corporate social
obligation, but the bank in genuine sense, has taken initiatives to perform corporate
social responsibility since 2010.
RBL is keen to the financial inclusion program. As a part of the program the bank is
circulated as many as four circulars to its 492 branches in the year 2010. The CSR
initiatives reported by RBL for the year 2010 are discussed below:

5.1 Financial Inclusion:

Rural Development Program:

Rupali Bank provides small loan and micro-credit for the socio-economic
development of the country. Loan for the crops like peas, bean, maze and spices at
only 2% interest rate is under disbursement in 14 districts through 14 branches of the
bank. Bank-NGO Linkage Credit Program was initiated in 2008. Rupali Bank is
providing Bank-NGO Linkage Credit Facilities to NGOs like Bureau Bangladesh,
TMSS, ARS Bangladesh, Podokhyep, Uddipon etc. Young-farmer credit program has
been made operative in order to disburse credit against bank account to those farmers

34
who have obtained “Agricultural Inputs and Assistance Card” and have bank accounts
or will open accounts in the bank with a view to assisting in their agricultural works.
Bank is also disbursing credit in establishing solar-energy and bio gas plant in rural
areas.
Banking Service for the Disadvantaged Groups and Empowerment of the Poor:

RBL has been providing wholesale credit facilities to different micro credit
institutions which are in turn lending amongst the poor people in different income
generating activities (IGA). Moreover, with 492 branches all over Bangladesh (271 in
urban areas and 221 in rural areas), Rupali Bank could reach banking services to the
disadvantaged group and encourage them in mobilization of their hard earned savings
and creation of investment opportunities for them.

Arrangement to open accounts for TK.50.00 is being made for the young males and
females with a view to assist them in their efforts in self-employment. Rupali Bank is
opening and operating accounts of women labor through REOPA project and
accounts of farmers for tk.10.00. Total number of accounts in the category for the TK.
10.00 up to 30 June, 2010 has been 4, 35,794. The accounts under the above
mentioned three categories are free of charges.

Supporting SME:
Rupali Bank Limited Has introduced four SME products named as ‘SHOHOJ’,
SHULOV’, ‘BABOISHAYEE’ and ‘MAJHARI’ giving SME the top priority in its
loan and advances portfolio. RBL is providing SME loans through all its 492 branches
and aims at creating the opportunity of employment for two lac people within two
years since the role small and medium enterprises (SMEs ) is indispensable for overall
economic development of a developing country like Bangladesh.

35
5.2 Social Services:

Seventy four branches of RBL are engaged in works relating to the payment of
portion of salaries paid by the government to the teachers and employees of registered
non-government educational institutions including teachers of non-government
educational institutions, forty seven branches are involved in payment of scholarship
and stipends to the girl students of primary levels and fifty one branches at secondary
levels.

In addition to these, almost all the branches of Rupali Bank are engaged in work
relating to the payment of pension bill to the retired government, civil and military
personnel and the receipt of utility bills such as PDB, DESA, REB, WASA, gas and
telephone and other service-related work of the government like receipt of Municipal
Tax and Land Development Tax, purchase and sale of Prize Bonds, receipt of Hajj
money etc. Rupali Bank has been facilitating banking service to the women
community through six of its branches in five districts

5.3 Environment:

Environment and Green Banking:

Rupali Bank Limited is keen to play proper role to save the environment from
degradation and has taken this as its prime responsibility.
Environment is one of the prime considerations in Rupali Bank’s regular operation
and business activity. RBL has made obtaining the clearance from the Department of
Environment at a mandatory requirement of the concerned business entity before
applying for any loan/advance by the bank. Besides, environment is one of the prime
considerations before opening any of its branches. RBL is using a slogan “Plant tree,
save the environment” in all its pads and envelops in building awareness among the
people. Pursuant to the policy adopted by the government RBL has contributed a lot
to “Plant trees and Save environment” Scheme. Effluent treatment plants ( ETPs) in
manufacturing establishments especially in dying industries are made mandatory
while financing by the bank. RBL is financing in dying industries with ETPs.

36
The bank is scrutinizing and assessing the probable adverse impact of any proposed
business undertakings by its borrowers on environment as well as on society through
its daily banking practice.

It is disseminating the valuable environmental know-how to customers, associates and

suppliers. The bank is monitoring the conditions imposed by the Department of
Environment to be fulfilled by the entrepreneurs in operating the business.
A comprehensive green banking policy, separate green banking unit/cell or green
banking fund are yet to be adopted, established or approved by Rupali Bank. But the
bank is showing general commitment on environment through few of its in-house
performance covering Phase-I following Policy Guidelines by Bangladesh Bank to
adopt green banking.
A general instruction has already been circulated in all 492 branches for efficient use
of electricity that supports initiating in-house environment management.

Ongoing automation program will help reducing the reliance on printed documents
and postage expenses or printing costs as well. Rupali Bank has included solar
installation, bio gas and agro-based projects for financing as specialized sector in its
SME loan portfolio with 1-2% less interest rate to conform to the spirit of green
banking.
Environment and Climate Change Risk will be incorporated as part of the existing
credit risk methodology complying with the instruction stipulated in the detailed
guidelines (expected to be circulated soon) on ‘Environment Risk
management(ERM)’ by Bangladesh Bank.

5.4 Making Technology Affordable:

Rupali Bank Limited has taken huge initiatives implementing its ongoing automation
program to reach the benefits to the customers enabling them to make easy and
seamless transaction. Bank is firmly committed to provide tele banking, SMS banking
and mobile banking within 2011.

37
5.5 Staff Welfare:

RBL provides two special schemes to ensure welfare for its employees.
Death Relief Grant Scheme:
The Bank operates a Death Relief Grant Scheme. The scheme is applicable to all
employees of the bank and payments out of this fund are made to the successors of the
employees on their death while in bank’s service. The quantum of payment is
determined as per scale and grade of such employees.
Retirement Benefit Scheme:
The bank operates alternative Retirement Benefit Schemes for its permanent
employees, elements of which are as under:
1) Contributory Provident Fund (CPF) Scheme
2) General Provident Fund (GPF) Scheme
a) Pension Fund
b) General Provident Fund

RBL ensures a modern, healthy and safe workplace for its employees through
initiating different renovation, modernization and reorganization in its various
operations and business activities:
 Adoption of modern human resource management policy in place of conventional
personnel management.
 Adoption strategy of attracting, retaining and motivating the talented people and
to look after the people who want to make long-term career with the bank.
 Encouraging excellence in performance by rewards and recognition.
 Reorganization of the present framework of RBL to ensure healthy and safe
workplace.
 Imparting improved training and workshops to more than 1000 officers in a year
on different areas of banking including Foundation Course on banking, SME and
foreign exchange and arranging proper posting for them.

38
Training facility:
RBL also arranges for more improved training to a considerable number of talented
officers to implement BASEL-2 in accordance with the instruction of Bangladesh
Bank aiming at human resources development through augmenting the work
efficiency and inspiration of the employees.
Assisting various institutions in this regard are RBTI, BIBM, PINNACLE Executive
Training Institute and other Rupali Bank Training Institute is being strengthened with
infrastructural facilities, up gradation of its course curriculum, introducing the training
calendar and by posting the resource persons there

 Renovating the branches with modern decorations and facilities

 Three years plan for completion of ongoing automation programs and introducing
on-line banking with all modern banking products and tools.
 Introducing a modern and on-line database and creation of very strong and
complete database.
 Updating the bank’s website with all the adequate information regularly.
 Ensures better healthcare of the employees with the help of two medical
consultants at head office and thorough medical checkup facility at discount rate
for employees under contract between RBL and Ayesha Memorial Specialized
Hospitals (Pvt.) Ltd

5.6 Summary of CSR Activities initiated by Rupali Bank

Limited during the Year 2010:

11th South Asian Games, 2010( 29 January to 09 February) :

RBL Sponsored Bangladesh Olympic Association in organizing the 11 th South
Asian Games in Dhaka which was inaugurated by Honorable Prime Minister of
Bangladesh. This Participation in sponsorship with other state owned banks and
financial institutions facilitated BOA in successfully arranging of the biggest
sports festival in South-Asia. The Games enhanced the positive image of
Bangladesh among the world community.

39
Independence Day, 2010:
RBL provided financial assistance to the Bangladesh Enterprise for Development
and Security Studies (BEDSS) in March and five organizations of the bank
employees in June, 2010 for celebrating The Great Independence Day, 2010. They
organized different programs like rally, discussion meetings and cultural functions
to nourish the Spirit of the War of Liberation.
International Convention for world-Peace, Humanity and Justice:
Rupali Bank Limited granted financial assistance to arrange International
Convention for World –Peace, Humanity and justice which was organized by
Muktijodhyo Smrity Sangrakhyan Kendro in June, 2010 in Dhaka.

The convention was organized by Justice Mohammad Golam Rabbani , Professor

Muntasir Mamun and Mr. Shahriar Kabir. The convention helped building opinion
home and abroad in favor of the government to develop the human rights
situation, demolition of the fundamentalist and militant forces and implementing
social justice and the spirit of the War of liberation in the country.

Liberation War Museum:

RBL awarded a handsome amount of financial grant as one of the premier patrons
to the Board of Trustees of the Liberation War Museum in August, 2010 in order
to establish the permanent Museum. The bank aims at helping to recover and
expand the spirit of the War of Liberation and to promote research on the same.
Documentary on the War of Liberation and Bangabandhu:
RBL sponsored National Media Ltd. to make and broadcast two rare exclusive
documentaries named ‘Nine Months of Freedom’ (58 minutes color) and ‘
Meeting a Milestone’ (28 minutes color) and footage on the war of Liberation and
Bangabandhu on different media in December, 2010.
Bijoy Mela:
RBL donated fund to organize the Sommilito Muktijudhyer Bijoy Mela Porisod
organized ‘Sommilito Muktijudhyer Bijoy Mela 2010’ in December in Chittagong
for twenty one days. Honorable Prime Minister Sheikh Hasina with a number of
Honorable Ministers was present in the fair. The fair has been helping people to
share the pleasure of the great victory in the War of Liberation for last several
years. RBL donated fund to organize the fair.

40
Sector Commander’s Forum:
The Sector Commander’s Forum is helping the government to arrange the trial of
the War-Criminals of 1971 providing necessary evidences, witnesses as well as
support in building mass opinion against the war-criminals. RBL donated fund to
the Sector Commander’s Forum in September,2010 for organizing their different
programs and conventions.

Observing the 150th Birthday of Rabindranath Tagore:

Rupali Bank Limited had a significant contribution to arrange a huge program
organized by Jatio Rabindra Sangeet Sommilon Parisod to celebrate 150 th
Birthday of the Nobel Laureate Bishwa Kabi Rabindranath Tagore on 31 st
December, 2010 and 1st January, 2011 at ‘Rabindra-Katchari Bari’ in Shajadpur
under Sirajgonj District. More than four hundred artists, performers along with
eminent intellectuals of our country took part in the colorful program.
Sheikh Rasel Shishu Kishore Parisod:
RBL made a donation to ‘Sheikh Rasel Jatio Shishu Kishore Parisod’ for
arranging different competitions including the Art and Cultural Competition for
the children all over the country from 1-18 October,
2010
Disaster Relief:
RBL always extends helping hands to the helpless people at the time of natural
calamities. The bank provided assistance to the victims of Nimtali-Begunbari
Tragedy and Aila affected people of Bhola. RBL donated funds to the Prime
Minister’s Relief Fund for the treatment and rehabilitation of the fire- burnt people
in a severe fire accident at Nimtali, Dhaka on 4 June, 2010. This bank also offered
a grant to the injured at the collapse of a multistoried building at Begunbari,
Dhaka on ! June, 2010.
RBL has awarded a financial grant to three brides Runa, Ratna and Asma through
the Honorable Prime Minister In June, 2010, who lost most of their family and
other near relatives in the severe fire accident at Nimtali on the occasion of their
marriage ceremony.

41
Rupali Bank Limited donated a significant amount of money to maintain the relief
activities to the flood and tidal wave affected people of the Bhola Sadar Upazilla
in October, 2010.
Iftekhar Kamal Benevolent Fund:
A donation has been made by RBL to the ‘Iftekhar Kamal Benevolent Fund’ for
treatment abroad to save the life of Iftekhar kamal Chowdhury ,a talented student
of Khulna University of Engineering and Technology (KUET) in June, 2010 who
was suffering from Blood Cancer.
Medical Treatment:
RBL provided financial assistance for the faco operations in the eye of an eminent
lawyer of Bangladesh Supreme Court, Dhaka in August, 2010. This bank also
helped for the rare treatment of eye of a Professor of Bangladesh Open University
inSeptember, 2010.The rare treatment was arranged in International Center of
Retinis Prigmentosa under International Medical Service in Havana, the capital of
Cuba.
Boishakhi Park:
Rupali Bank Limited donated funds to Banani Society for beautification of
‘Boishakhi Park’ in Banani in June, 2010.

The University of Dhaka:

RBL sponsored Annual Senate Meeting of the University of Dhaka was held on
28 June, 2010.

The University of Rajshahi:

The Alumni Association of the Department of History, The University of Rajshahi
organized their 5th Biennial Conference in 20-25 December, 2010. RBL
contributed to the conference and helped to share the university alumni the
memories, emotions, views and educational system of the country.
Society for Development and Cooperation (SODAC):
RBL supported SODAC in December, 2010 to help them to arrange research,
seminars and symposiums to assist in policy formulation. This donation helped to

42
 organize programs to analyze different national significant issues and to build
mass opinion for the public interest.
Sriticharon Gobesona Sahitte Bangabandhu Chorcha:
Rupali Bank Limited sponsored to Mr. Kamruzzaman Liton to publish a
voluminous of book named ‘Sriticharon Gobesona Sahitte Bangabandhu Chorcha’
in December, 2010.
Manush Manusher Jonno:
RBL donated fund to six poor, helpless and distressed people from five districts
through six of its branches by opening six saving accounts free of charges to make
them rehabilitate and self-reliant.

Honorable Chairman of RBL handed over the drafts and payment orders to the
said six persons during suiting of an episode of a documentary of 52 episodes
named ‘Manush Manusher Jonno’ directed by Mr. Imrul Chowdhury was
broadcasted on BTV.

Janakantha Family Day:

RBL sponsored celebrating the ‘Janakantha Family Day’ which was
held on 06 August, 2010.

Death Anniversary of the Father of the Nation:

RBL provided financial assistance to support Bangabandhu Parisod to arrange
month long programs like rally, discussion meeting, milad mahfil etc. in
observance of the death anniversary of the Father of the Nation, Bangabandhu
Sheikh Mujibur Rahman to build a mass opinion against killing of Bangabandhu
and his family members on 15th August, 1975.

Corporate Social Responsibility Expenditure of RBL

For the year2010 at a glance:
Date Description of Programs Amount
13-01-2010 South Asian Games 2010, Dhaka Tk. 10000000
28-03-2010 Victory Day Programs Tk. 50000
07-06-2010 Nimtali Tragedy Tk. 2500000

43
07-06-2010 Medical Treatment Tk. 3500000
13-06-2010 Beautification of Park Tk. 50000
17-06-2010 International Convention for Justice & Humanity Tk. 300000
28-06-2010 Independence Day Tk. 27000
28-06-2010 Nimtali Tragedy Tk. 600000
29-06-2010 Sponsor Money Tk. 454000
04-08-2010 Sponsorship(Janakantha Family Day) Tk. 80000
09-08-2010 Patronizing Liberation War Museum Tk. 5000000
12-08-2010 Medical Treatment Tk. 30000
09-09-2010 Convention of Sector Commander’s Forum Tk. 100000
09-09-2010 15th August Program on Bangabandhu Sheikh Tk. 100000
Mujibur Rahman
09-09-2010 Medical Treatment Tk. 50000
31-10-2010 For helping distress people of Bhola Upazilla Tk. 550000

02-11-2010 “Manush Manusher Jonno”- A TV program to Tk. 180000

enable six people self reliant
23-11-2010 “Sheikh Rasel Sishu Kishore Parisad”- For Tk. 25000
arrangement of Cultural program & Art competition
23-11-2010 University of Rajshahi Alumni Association to Tk. 100000
arrange there 5th Convention
09-12-2010 “Sriticharon Gobesona Sahitte Bangabandhu Tk. 10000
Chorcha”- A publication

09-12-2010 Society for Development & Co-operation for Tk. 50000

organizing meeting and seminar
09-12-2010 Documentary on the War of Liberation and Tk.1442000
Bangabandhu
21-12-2010 Bijoy Mela Tk. 100000

30-12-2010 Celebrating the Birthday of Rabindranath Tagore Tk. 50000

TOTAL = Tk.25,348,000

44
 Findings and Analysis

6. Findings and Analysis:

Rupali Bank Limited has taken vast initiatives to perform CSR activities since
2010.RBL is incurring its CSR expenditure directly from its own budget. There is no

45
separate entity established as foundation or trust supported by contribution from CSR
expenditure allocation of the bank concerned to incur CSR expenditure.

6.1 Promotion of Financial Inclusion:

Rupali Bank enthusiastically participated in BB’s financial inclusion drive including

lending to SMEs, Credit support to young farmers, opening and operating accounts
for farmers, unemployed youth and hardcore poor, providing wholesale credit
facilities to different micro credit institutions, providing Bank-NGO linkage credit
facilities to NGOs, disbursing credit in establishing solar-energy and bio-gas plant in
rural areas. These initiatives entail modest indirect impact on earning level of the RBL
to the extent of forgone income differential, if any, relative to other available
investment options. In the longer run however, these forgone income are likely to be
more than made up by the larger income potential from the broadened and diversified
customer base.

6.2 Ingraining CSR practices within the organization & client

businesses:

In accordance with the BB guidance circular suggestion on ingraining

environmentally and socially responsible practices within the organization

RBL has reported having taken steps for adoption of socially and environmentally
responsible practices in their own internal operations. RBL has adopted socially and
environmentally responsible practice in its internal operations and provided a modern,
healthy and safe work place and created a learning and development environment,
ensured compliance of regulatory environmental and social requirements.

46
6.3 Initiatives to adopt green banking policy:

RBL is now at Phase-1 of green banking according to the Policy Guidelines of BB.
The bank has only covered few of its in-house performance and many of the green
banking activities of Phase-1 like green finance, green marketing, climate risk fund,
reporting green banking practices are yet to be adopted.

6.4 Tax rebate for CSR:

RBL renders various CSR activities according to the regulations prescribed

Bangladesh Bank. This bank has been performed CSR practices since 2010 and
RBL’s income tax assessment has been finalized up to 2002 and case pending for the
year 2003 to 2008. Income tax return of 2009 has been submitted but assessment has
not been completed. As, the bank has performed its many CSR activities in
accordance with Bangladesh Gazette [new SRO No. 229-Ain/Aykar/2011, dated
04.7.2011 u/s 44(4) (b)],
but some CSR activities undertaken by RBL are not included in the areas of getting
tax concession in accordance with the regulation .
They are:

CSR activities Amount of

Expenditure
Beautification of Park Tk. 50000
Sponsorship(Janakantha Family Day) Tk. 80000
“Sheikh Rasel Sishu Kishore Parisad”- For arrangement of Cultural Tk. 25000
program & Art competition (assumed that this organization is not
approved by Government)
Celebrating the Birthday of Rabindranath Tagore Tk. 50000
Total CSR Expenditure Tk. 205000

47
Allowable CSR expenditure for tax rebate=
(Total direct CSR expenditure- Unallowable CSR expenditure)
=Tk.25348000-Tk.205000
=Tk.25143000
So the tax rebate is Taka 2514300(Tk. 25143000*10%)
The above tax rebate is calculated on the basis of CSR activities following the
guideline. But it totally depends on National Board of Revenue after the assessment of
Income tax return and CSR activities of RBL.

6.5 Problems of tax disincentive:

As there is a provision of getting 10 percent tax rebate by donating to the institutions

or authorities approved by the Government according to the Bangladesh Gazette, but
there is a possibility of not getting the tax benefit, if any CSR is not considered by
NBR as allowable expenditure. The company’s tax liability will be affected by this
unallowable expenditure and the company will be deprived of getting tax concession.

According to the CSR activities: AY 2011-2012, [new SRO No. 229-

Ain/Aykar/2011, dated 04.7.2011 u/s 44(4)(b)], some CSR activities of RBL such as
beautification of ‘Boishakhi Park’, donation to ‘Sheikh Rasel Jatio Shishu Kishore
Parishad’, sponsorship to ‘Janakantha Family Day’, contribution to celebrate the150 th
birthday of Rabindranath Tagoreand are not eligible to get tax rebate and RBL will
fail to get tax incentive in the above mentioned areas.

6.6 Branding of Rupali Bank Limited:

Many CSR activities like arrangement of big games and sports, observance of
different national and international days, sponsorship of big events are a major source
of branding of RBL because there is a close link of CSR with brand promotion.
RBL’s taking part in the beautification program of ‘Boishakhi Park’, providing
sponsorship to the University of Dhaka and University of Rajshahi helped to increase
the bank’s brand image broadly in the society.

48
6.7 Reporting of CSR initiatives:

Rupali Bank Limited has reported the CSR activities in separate chapters of their
annual report in accordance with CSR guidance circular issued by Bangladesh Bank.
RBL has provided details of their programs in its report but did not make proper
disclosure of direct CSR expenditure. The quantitative amount of CSR expenditure
was gathered from Central Accounts Division of RBL, The bank has also included
future plans in the chapter on CSR activities.
Rupali Bank Limited has not issued any separate report of its CSR programs and
activities. This bank reported CSR program adoption by decisions at board of
directors level; there is no practice of stakeholders consultation in drawing up or
implementing CSR programs.

6.8 Gap Between the amount of direct CSR expenditure:

According to the Review of CSR initiatives in banks (2010) by Bangladesh Bank,

July 2011, the direct CSR expenditure in 2010 reported by RBL is Taka 16,700,000
and the actual CSR expenditure by RBL in 2010 was Taka 25,348,000.This is a huge
gap between actual expenditure and reported expenditure. This huge gap that might be
caused by lack of proper communication and information.

6.9 Staff welfare:

RBL has included Retirement Benefit Scheme such as Contributory Provident Fund
(CPF) Scheme, General Provident Fund (GPF) Scheme, Pension Fund and General
Provident Fund as a part of CSR activities. These welfare funds are created from the
contribution of employees/workers and employers. These funds are part of employee
benefits. RBL has reported it as CSR because the bank thinks that charity begins at
home and these help employees to maintain a sound life.
Besides training facilities, performance recognition program and rewards etc initiated
by RBL is helpful to ensure a modern, healthy and safe workplace for its employees
that assist on ingraining CSR practices within the organization & client businesses.

49
Recommendations and
conclusion

50
7.1 Summary of Findings:

Rupali Bank Limited has under taken fresh initiatives in line with Bangladesh Bank
Guidelines in the areas of CSR activities since 2010.RBL participated in promotion of
financial inclusion of the large socially disadvantaged rural and urban population
segment. In accordance with the BB guidance circular suggestion on ingraining
environmentally and socially responsible practices within the organization, RBL has
also taken several CSR initiatives. RBL can get some tax rebate for CSR practices in
the areas approved by the government. Also, CSR practices in RBL are very helpful
to enhance its brand image. But proper adoption of Phase-1 of Green Banking
activities, separate CSR reporting including quantitative disclosure of CSR
expenditure and eliminating the information gap of reported CSR expenditure are yet
to be implemented.

7.2 Recommendation:

Based on the evaluation of different aspects of the CSR practices of Rupali Bank
Limited, the following recommendations have been made:
 RBL should take more initiatives to exhibit Suitable and well thought-out CSR
programs in accordance with Bangladesh Bank Guidelines.
 Green Banking policy should be adopted properly and RBL should give more
attention to adopt Phase-1 of Green Banking since the deadline of
implementing the Phase-1within 31 December, 2011 and followed thereby.
 RBL should establish separate foundation or trust to incur CSR expenditure to
manage CSR activities properly.
 CSR should be given to the areas which are approved by NBR to get tax
benefit.
 RBL should regard public relations and exercise CSR as the principal brand
image crisis communications function and give special considerations to it
within its marketing and communications strategy formulation and execution.
 RBL can achieve cost benefit from CSR programs. Those techniques are less
expensive and more influential than advertising.

51
  As with all other channels of advertising infrastructure, CSR should get
comparable preference while assigning RBL’ communications budget. In fact,
partiality to CSR expenses should be greater because it has the ability to raise
the public consciousness with a fraction of publicity.
 RBL can afford to employ CSR employees, who should rely on them to put
together well written, influential and perform and plan CSR programmes and
press releases that are competent enough to catch public attention. This will
also work to minimize the information gap and ensure actual CSR expenditure
reporting.
 RBL Should issue separate report of its CSR programs and activities including
quantitative disclosure of CSR expenditure in accordance with the Bangladesh
Bank Guidelines.

7.3 Conclusion:

In recent times, corporate social responsibility has emerged as an important concept in

discourses on development. By incorporating CSR as a strategic investment into their
fundamental business strategy, management instruments and operation, companies
will be able to contribute to social and environmental issues affecting the
development of mankind. CSR is not a cost, it is an investment. Therefore, by
incorporating CSR, businesses will be able to contribute to the society and at the same
time minimize risk due to uncertainty. In the context of Bangladesh, CSR can
contribute immensely for the development of the community. Though Rupali Bank
Limited has taken initiatives to perform CSR activities in accordance with Bangladesh
Bank Guidelines in most of the cases, but the bank should properly follow the
Bangladesh Bank Guidelines.. As there are challenges to implement CSR properly in
our country because of limited resources, RBL should prioritize those CSRs which
will contribute to poverty reduction and will supplement government’s effort towards
achieving the millennium development goals. By exhibiting suitable CSR programs,
adopting proper green baking policy, employing CSR employees, RBL can be able to
achieve a long term goal of sustainable development.

52
Bibliography:

Cheney, C (2010). Financial Executives and CSR. Financial Executive. 26 (4), 26.

Köhler and Maclean. (2009). Talisman? A responsible corporation?. Corporate Social
Resposibility. 122 (23), 36.
Iiasa, (2010). Strategic Decision Making. Available:
www.iiasa.org.za/Technical/CSR.pdf .
Maccarrone, S (2009). Factors influencing the attitude towards corporate social
responsibility: some empirical evidence from Italy. Corporate Governance. 9 (2), 97.
Worldbank (2010), Corporate Social Responsibility Diamond – Main Elements of
CSR. Available: info.worldbank.org/etools/docs/library/57524/csr_diamond.pdf.
Sutantoputra, A W (2009). “Social disclosure rating system for assessing firms' CSR
reports. Corporate Communications”. 14 (1), 34.
Belal,A.R. (2009). “Corporate Social Reporting (CSR) in Emerging Economies: A
Review and Future Direction”.
Rupali Bank Limited , Annual Report 2010.
Rupali Bank Limited ,Annual Report 2009.
Rupali Bank Limited, Annual Report 2008.
Bangladesh Bank, Annual Report 2010-2011.
Bangladesh Bank, (July, 2011), “Review of CSR initiatives in Banks (2010)”
Bangladesh Bank, (April, 2010), “Review of CSR initiatives in Banks (2008 & 2009)”
DOS Circular No. 01(1 June, 2008)
http://www.bangladesh-bank.org/
http://www.nbr-bd.org
http://www.rupalibank.org/

53