Corporate Social Responsibilities (CSR) of

Commercial Banks in Bangladesh: An Overview

Tanbir Ahmed
BBA 5th Batch
Dept. of Finance
Jagannath University

1 July, 2015
 Executive Summery

CSR movement has gathered great momentum over the past number of years and is now
regarded as being at this most prevalent. CSR is presently one of the most discussed topics by
government, by non-government and by business itself. In keeping with global movement, CSR
is being seen as the source of new competition edge for the banking sectors of Bangladesh.
Commercial banks of Bangladesh practices CSR not only to improve community relations but
also as source of significant commercial benefit.

The purpose of the study is to provide deep understanding of the practices of CSR of
commercial banks in Bangladesh. The study has been taken to observe different regulatory
framework (area of CSR) of CSR and Commercial bank’s contribution in this area. This study
found that the contribution amount by commercial banks to CSR activities is very insignificant in
proportion to their profit amount. This study suggests that a proper guideline by Government
regarding CSR contribution, involvement of large corporation in CSR activities and mandating
CSR disclosures in the annual report will fulfill the intended goals of the corporate organizations
and also ensure a successful and sustainable development of the society.

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 Table of Contents

SL. NO. Contents Page No.

Executive Summery II
Chapter 1 9
Introduction
1.1 Introduction 10
1.2 Origin of the report 11
1.3 Rationale of the study 11
1.4 Objective of the report 11
1.5 Scope of the study 12
1.6 Methodology 12
1.6.1 Sources of Data 12
1.6.2 Size of Data 13
1.6.3 Data Analysis & Presentation 13
1.7 Limitation of the study 13
Chapter 2 14
Corporate Social Responsibilities: A Theoretical Review
2.1 Meaning of Corporate Social Responsibility 15
2.2 Views of Social Responsibility 16
2.2.1 The Classical View 16
2.2.2 The Socioeconomic View 16
2.3 CSR and Constituents 16
2.4 Types of Corporate Social Responsibility 18
2.4.1 Economic Responsibilities 18
2.4.2 Legal Responsibilities 18
2.4.3 Ethical Responsibilities 18
2.4.4 Philanthropic Responsibilities 18

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2.5 Dimensions of Corporate Social Responsibility 19
2.5.1 Environmental 19
2.5.2 Social 19
2.5.3 Economic 19
2.5.4 Stakeholder 19
2.5.5 Voluntariness 20
2.6 Corporate Social Responsibility (CSR) Implications to 20
Business Activities
2.7 Corporate Social Responsibility (CSR) as Community 20
Development
CHAPTER 3 21
BANKING SECTOR IN BANGLADESH AND CSR
PRACTICE
3.1 Banking Sector of Bangladesh 22
3.2 CSR in Banking Sector of Bangladesh 23
3.3 Highlights of Recent Engagements of Banks in CSR 25
Practice
3.4 CSR Expenditures by Banks 26
3.5 Institutionalizing CSR at Corporate Level 28
Chapter 4 29
CSR practice of commercial banks of Bangladesh
4.1 CSR contribution of commercial banks of Bangladesh 30
4.1.1 Janata Bank Ltd. (JBL) 30
4.1.2 Rupali Bank Ltd. (RBL) 31
4.1.3 Agrani Bank Ltd. (ABL) 31
4.1.4 Dutch-Bangla Bank Ltd. (DBBL) 32
4.1.5 Islami Bank Bangladesh Ltd. (IBBL) 33
4.1.6 Mercantile Bank Ltd (MBL) 34
4.1.7 Trust Bank Ltd. (TBL) 34
4.1.8 Bank Asia Ltd. (BAL) 35

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4.1.9 Southeast Bank Ltd (SEBL) 36
4.1.10 One Bank Ltd. (OBL) 37
4.1.11 Social Islami bank Ltd 37
Chapter 5 39
Analysis & Interpretation

5.1 Comparison of selected banks according to different 40

category
5.1.1 Education 40
5.1.2 Health 41
5.1.3 Humanitarian & disaster management 42
5.1.4 Culture & Sports 43
5.1.5 Rehabilitation, poverty reduction & social development 44
5.1.6 Environment 45
5.1.7 Information Technology 46
5.1.8 Miscellaneous 46
5.2 Comparison among Banks in Compliance with regulatory 47
framework of CSR
5.3 Comparison of CSR contribution in proportion to profit 48
Chapter 6 51
Findings & Conclusion
6.1 Findings 52
6.2 Recommendation 53
6.3 Conclusion 54
References 55

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 ABBREVIATION

ABL = Agrani Bank Limited

BAL = Bank Asia Limited

CSR = Corporate Social Responsibilities

DBBL = Dutch-Bangla Bank Limited

FCB’s = Foreign Commercial Banks

IBBL = Islami Bank Bangladesh Limited

JBL = Janata Bank Limited

MBL = Mercantile Bank Limited

OBL = One Bank Limited

PCB’s = Private Commercial Banks

RBL = Rupali Bank Limited

SEBL = Southeast Bank Limited

SIBL = Social Islami Bank Limited

SOCB’s = State Owned Commercial Banks

TBL = Trust Bank Limited

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 List of Tables
SL. NO. Name of Tables Page No.

1 CSR Expenditure in banking sector 26

2 Sectoral pattern of CSR expenditure 27

3 CSR contribution by JBL 30

4 CSR contribution by RBL 31

5 CSR contribution by ABL 31

6 CSR contribution by DBBL 32

7 CSR contribution by IBBL 33

8 CSR contribution by MBL 34

9 CSR contribution by TBL 35

10 CSR contribution by BAL 36

11 CSR contribution by SEBL 36

12 CSR contribution by OBL 37

13 CSR contribution by SIBL 38

14 Contribution to Education 40

15 Contribution to Health 41

16 Contribution to humanitarian & disaster management 42

17 Contribution in culture & sports 43

18 Contribution in rehabilitation, poverty reduction & social 44

development

19 Contribution in environment 45

20 Contribution in IT 46

21 Contribution in miscellaneous sector 46

22 Compliance with the regulatory framework of CSR 47

23 Comparison of CSR contribution in proportion to profit 49

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 List of Charts
SL. No. Title Page No.
1 Sectoral shares of CSR expenditure 27
2 CSR Contribution in Education 40
3 CSR Contribution in Health 41
4 CSR Contribution in Humanitarian & Disaster management 42
5 CSR Contribution in Culture & sports 43
6 CSR Contribution Rehabilitation, Poverty Reduction & 44
Social Development
7 CSR Contribution in Environment 45
8 CSR Contribution in Miscellaneous sector 46

List of Figures
SL. No. Title Page No.
1 3 P’s of CSR 17
2 Constituents of CSR 17

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 Chapter 1

Introduction

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1.1 Introduction

Social responsibility is a concept well known in the corporate world and beyond that. All over
the world have practiced only profit making actions at past but not for long as the enterprise
started to develop complexities and wideness in size and actions so was their reach getting bigger
and bigger. As every person has his own social responsibilities towards the society so does the
business firms. The idea is that, the business has social obligations and above and beyond
making a profit that is corporate social responsibility. Through CSR enterprises are intent to
strike a balance between economic and social goals, where resources are used in a rational
manner and social needs are be addressed responsibly. CSR can be viewed as a comprehensive
set of policies, practices, and programs that are integrated into business operations, supply
chains, and decision making processes throughout the company and include responsibilities for
current and past actions as well as adequate attention to future impacts. CSR focuses vary by
business, by size, by sector and even by geographic region. The area of CSR is quite big and it
includes all the good practices that increase the business profitability and can preserve interest of
all stakeholders.

Bangladesh is a developing country. Because of global competitiveness and demand, the CSR
practices and standards are being implemented in Bangladesh. But we are yet go a long way.
However, it is regretful that though internationally it is being practiced widely, Bangladesh is
still lagging behind. The difference between the world standard and the practice in Bangladesh
shows the lacking here and the scope for development. There are challenges to implement CSR
properly in Bangladesh. Ultimately CSR practices should be better practiced in Bangladesh for
better and enhanced performance. Currently in Bangladesh, CSR is a matter of self interest for
the corporate sector. The study has taken an attempt to observe the CSR activities and practices
of Private Commercial Banks in Bangladesh. Bangladesh Bank is the main regulatory authority
of banking sector of the country. Now a day Bangladesh Bank is very concern of the matter.
Bangladesh bank has taken initiative to encourage private commercial banks in CSR activities
for this NBR issued rules on tax rebate for CSR activities. As a result the contribution in CSR by
commercial banks has been increased significantly.

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1.2 Origin of the Report

As a student of Bachelor of Business Administration (BBA) every student is required to conduct

a practical orientation in any organization for fulfilling the requirements of the 12 weeks
Internship Program . The main purpose of the program is to introduce the students with the real
world situation.I have done my internship in Janata Bank Ltd., Langalbandh branch,
Narayangonj. This Internship Report is generated under the academic supervision Dr.
Mohammad Bayezid Ali, Associate Professor, Department of Finance, Jagannath University.
This report is prepared as the partial requirement of B.B.A degree. The topic is “Corporate
Social Responsibilities (CSR) of Commercial Banks in Bangladesh: An Overview”.

1.3 Rationale of the Study

Business is an inseparable and embedded part of the society. Besides conducting business
activities and pursuing economic gains, business houses also have several other roles and
responsibilities towards society such as the social and environmental responsibilities and
business contributions that would benefit the society at large. In the modern era commercial
banks are not only engaging in profit making but also paying attention to their social
responsibilities.This particular report is prepared with a view to providing an overall overview of
CSR activities of commercial banks and its practicing areas.Besides it will help us along with
any reader of this particular framework to learn about corporate social responsibilities, its
regulatory framework and lastly advantages and utilities in a brief manner at least.

1.4 Objective of the Report

The primary objective of this report is to use the theoretical concepts gained in the classroom
situations with the 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. In case of this
report, the objectives are-

 To gather the knowledge about CSR activities of commercial banks of Bangladesh.

 To identify the major areas where CSR activities are performing by commercial banks.

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  To compare and analyze the contribution of CSR activities of commercial banks in
different areas.
 To examine the compliance of CSR practices by commercial banks with the regulatory
framework.
 To evaluate the CSR contribution in proportion of profit.
 To recommend some necessary steps to boost CSR activities and their reporting.

1.5 Scope of the Study

Janata Bank Limited is the second largest commercial Bank in Bangladesh. Janata Bank Limited
operates through 848 branches including 4 overseas branches at United Arab Emirates. It is
linked with 1221 foreign correspondents all over the world. I am assigned to learn practical
knowledge from Janata Bank Limited, at Langalbandh Branch. In this study I would try to
concentrate on the total aspect of corporate social responsibilities (CSR), that is, the definition of
CSR, area of CSR activities, the regulatory framework of CSR and the direct contribution in
CSR by ten sample commercial banks (including Janata Bank Limited) in Bangladesh. I would
collect the related data presented in the annual reports of thesample banks and also analyze the
CSR activities of selected banks for last few years. And finally I would conclude with the critical
evaluation of the CSR activities of commercial banks of Bangladesh under the guidelines of the
Bangladesh Bank and a discussion on the major findings and recommendations.

1.6 Methodology

In order to collect relevant and adequate data it is necessary to follow proper Methodology. No
one can collect relevant information without maintaining a proper Methodology.

1.6.1 Sources of Data

The study is exclusively a descriptive research and thus it is purely based on the information
from secondary data sources. The data are collected from:

 Annual Reports of sample banks.

 Different books, research papers, documents, manuals etc. related to the topic.
 subject related websites and
 Different reports of Bangladesh Bank.

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1.6.2 Size of Data

All data are collected in yearly basis. And the information is collected from the year 2009 to the
year 2014.

1.6.3 Data Analysis & Presentation

After collecting necessary data it needs to process this data. All data are processed through
proper editing, classification and tabulation. Then Data are analyzed and presented by
percentage, graphical presentation techniques and different types of charts. Major or critical
findings have been analyzed and then based on everything; recommendations and conclusion are
given.

1.7 Limitation of the study

There are some limitations that I have faced in preparing this report. Basically I faced
difficulties in collecting data from the different sources. I could not collect primary data for lack
of time. For secondary data, I faced problem of unorganized record of documents keeping by
different sources. Preparing the report I faced some difficulties which are-
 Lack of proper information in the websites of the Banks.
 Lack of necessary information in the official publications of Bank companies.
 Inexperience and time constraint are the other limitations.
 Secondary data were collected from the Annual Reports which may contain biased
information.
 This project has been prepared with limited resources. Due to this reasons the
justifications stated may not reflect the actual scenario.

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 Chapter 2

Corporate Social Responsibilities: A

Theoretical Review

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2.1 Meaning of Corporate Social Responsibility

Corporate social responsibility (CSR) is the corporate initiative to assess and take responsibility
for the company's effects on the environment and impact on social welfare. The term generally
applies to company efforts that go beyond what may be required by regulators or environmental
protection groups.

Corporate social responsibility may also be referred to as "corporate citizenship" and can involve
incurring short-term costs that do not provide an immediate financial benefit to the company, but
instead promote positive social and environmental change.

Companies have a lot of power in the community and in the national economy. They control a lot
of assets, and may have billions in cash at their disposal for socially conscious investments and
programs. Some companies may engage in "green washing", or feigning interest in corporate
responsibility, but many large corporations are devoting real time and money to environmental
sustainability programs, alternative energy and various social welfare initiatives to benefit
employees, customer, and community at large.

Few popular definition of CSR are presented here-

Michael Hopkins' Definition of CSR:

"Corporate Social Responsibility is concerned with treating the stakeholders of a company or

institution ethically or in a responsible manner. ‘Ethically or responsible' means treating key
stakeholders in a manner deemed acceptable according to international norms. "

[Carroll, 1979; 2008, 500]:

"The social responsibility of business encompasses the economic, legal, ethical and discretionary
expectations that a society has of organizations at a given point in time."

EU Definition of CSR:

"A concept whereby companies integrate social and environmental concerns in their business
operations and in their interaction with their stakeholders on a voluntary basis."

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Mallenbaker Definition:

"CSR is about how companies manage the business processes to produce an overall positive
impact on society"

The World Business Council for Sustainable Development (WBCSD):

"Corporate Social Responsibility is the continuing commitment by business to behave ethically

and contribute to economic development while improving the quality of life of the workforce and
their families as well as of the local community and society at large"

2.2 Views of Social Responsibility

There are two views of social responsibility. Those are

 The Classical View

 The Socioeconomic view

2.2.1 The Classical View

The view that management only responsibility is to maximize profits. Some big companies
suchas Beximco Group, AbulKhair Group don’t contribute broadly in corporate social
responsibility.

2.2.2 The Socioeconomic View

This is the modern views of today’s global business of economy. In this view management’s
social responsibility goes beyond making profit to include protecting and improving society’s
welfare. Some companies such as Abdul Monem Limited, Unilever, Dutch Bangla Bank etc.
spends huge amount of money for the society.

2.3 CSR and Constituents

Corporate social Responsibility (CSR) is the responsibilities of an organization to

proactivelypromote the public interest by encouraging community growth and voluntarily
eliminatingpractices that harm the public interests. It is the deliberate inclusion of public interest
intocorporate decision-making. Broadly, CSR activities of an organization should embrace to

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honoring the three P’s-People, Planet and Profit. CSR policy would function as a self-regulating
mechanism, where business would ensure the adherence to laws & ethical norms.

Figure 1: 3 P’s of CSR

People

3 P’s

Profit Planet

Profit making should not be the only objective of an organization; rather it should embrace the
interests of all stakeholders & the community people at large for the long-term sustainability &
growth. In decision making, an organization should consider the impact of its activities on the
environment & all other stakeholders.

Figure 2: Constituents of CSR

Customers

Society
Employees

Government Environment
Constituents

Capital Regulatory
Providers Authority

Suppliers

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It is intended to portray that the total CSR of business comprises distinct components that, taken
together, constitute the whole. The most critical tensions, of course, would be between economic
and legal, economic and ethical, and economic and philanthropic. In summary, the total
corporate social responsibility of business entails the simultaneous fulfillment of the firm's
economic, legal, ethical, and philanthropic responsibilities.

2.4 Types of Corporate Social Responsibility

The idea behind corporate social responsibility is that companies have multiple responsibilities to
maintain. These responsibilities can be arranged in a pyramid, with basic responsibilities closer
to the bottom. As a business meets lower-level responsibilities that obligate it to shareholders
and the law, it can move on to the higher level responsibilities that benefit society.

2.4.1 Economic Responsibilities: A company's first responsibility is its economic

responsibility - that is to say, a company needs to be primarily concerned with turning
a profit. This is for the simple fact that if a company does not make money, it won't
last, employees will lose jobs and the company won't be able to think about taking
care of its social responsibilities. Before a company thinks about being a good
corporate citizen, it first needs to make sure that it can be profitable.
2.4.2 Legal Responsibilities: A company's legal responsibilities are the requirements that
are placed on it by the law. Next to ensuring that company is profitable, ensuring that
it obeys all laws is the most important responsibility, according to the theory of
corporate social responsibility. Legal responsibilities can range from securities
regulations to labor law, environmental law and even criminal law.
2.4.3 Ethical Responsibilities: Economic and legal responsibilities are the two big
obligations of a company. After a company has met these basic requirements, a
company can concern itself with ethical responsibilities. Ethical responsibilities are
responsibilities that a company puts on itself because its owners believe it's the right
thing to do, not because they have an obligation to do so. Ethical responsibilities
could include being environmentally friendly, paying fair wages or refusing to do
business with oppressive countries.
2.4.4 Philanthropic Responsibilities: If a company is able to meet all of its other
responsibilities, it can begin meeting philanthropic responsibilities. Philanthropic

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 responsibilities are responsibilities that go above and beyond what is simply required
or what the company believes is right. They involve making an effort to benefit
society -- for example, by donating services to community organizations, engaging in
projects to aid the environment or donating money to charitable causes.

2.5 Dimensions of Corporate Social Responsibility

Traditionally, companies have had one responsibility: to make a profit. But the concept of
corporate social responsibility holds that companies should be responsible to more than just their
owners. Corporate social responsibility holds that there are multiple dimensions that should
affect a company's actions-

2.5.1 Environmental: The environmental dimension of corporate social responsibility

refers to your business's impact on the environment. The goal, as a socially
responsible company, is to engage in business practices that benefit the environment.
For example, choosing recycled materials to use in packaging or adding renewable
energy sources like solar power to the factory.
2.5.2 Social: The social dimension of corporate responsibility involves the relationship
between the business and society as a whole. When addressing the social dimension,
the business should be used to benefit society as a whole. This could involve sourcing
fair trade products, for example, agreeing to pay employees a livable wage. It could
also involve taking on endeavors that benefit society, for instance using the resources
to organize charitable fundraisers.
2.5.3 Economic: The economic dimension refers to the effect that corporate social
responsibility has on the finances of the company. In an ideal world, where corporate
social responsibility had no costs, there would be no reason to limit it. But in the real
world it is important to recognize the financial impact that these actions have and to
balance being a good corporate citizen with making a profit.
2.5.4 Stakeholder: The stakeholders are all of the people affected by company's actions.
These include employees, suppliers and members of the public. When considering the
stakeholder dimension of corporate social responsibility, it should be considered that
how the business decisions affect these groups. For example, a company might be

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 able to increase its output by having employees work more, but it should consider the
impact it will have on them, not just its bottom line.
2.5.5 Voluntariness: Actions that fall into the voluntariness dimension are those that you
are not required to do. These actions are based in what a company believes is the
correct thing to do. They may be based in specific ethical values that the company
holds. For example, a company may believe that using organic products is the right
thing to do even if it is not required to do so.

2.6 Corporate Social Responsibility (CSR) Implications to Business Activities

Companies are facing the challenges of adapting effectively to the changing environment in the
context of globalization and in particular in the export sector. Although Consumer Rights
Movement, enforcement of government regulations and a structured view regarding the
economic importance of CRS are not yet so widespread in the corporate world in Bangladesh,
companies have gradually attaching more importance to CSR in the local market as well. They
are increasingly aware that CSR can be of direct economic value. Companies can contribute to
social and environmental objectives, through integrating CSR as a strategic investment into their
core business strategy, management instruments and operations. This is an investment, not a
cost, much like quality management. So, business organizations can thereby have an inclusive
financial, commercial and social approach, leading to a long term strategy minimizing risks
linked to uncertainty.

2.7 Corporate Social Responsibility (CSR) as Community Development

Corporate Social Responsibility (CSR) in Bangladesh can also contribute a lot to community
development. The corporate house can develop the community by creating employment,
providing primary education, contribution to infrastructure development like road and high-ways
and addressing environmental concerns. This is more relevant for a country like Bangladesh
where the government interventions in these fields being augmented by corporate alliance can go
a long way in developing the economy, society and environment.

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 CHAPTER 3
BANKING SECTOR IN BANGLADESH
AND CSR PRACTICE

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3.1 Banking Sector of Bangladesh

After the independence, banking industry in Bangladesh started its journey with 6 nationalized
commercialized banks, 2 State owned specialized banks and 3 Foreign Banks. In the 1980's
banking industry achieved significant expansion with the entrance of private banks. Now, banks
in Bangladesh are primarily of two types:

 Scheduled Banks: The banks which get license to operate under Bank Company Act,
1991 (Amended up to 2013) are termed as Scheduled Banks.
 Non-Scheduled Banks: The banks which are established for special and definite objective
and operate under the acts that are enacted for meeting up those objectives, are termed as
Non-Scheduled Banks. These banks cannot perform all functions of scheduled banks.

There are 56 scheduled banks in Bangladesh who operate under full control and supervision of
Bangladesh Bank which is empowered to do so through Bangladesh Bank Order, 1972 and Bank
Company Act, 1991. Scheduled Banks are classified into following types:

 State Owned Commercial Banks (SOCBs): There are 6 SOCBs which are fully or
majorly owned by the Government of Bangladesh.
 Specialized Banks (SDBs): 2 specialized banks are now operating which were
established for specific objectives like agricultural or industrial development. These
banks are also fully or majorly owned by the Government of Bangladesh.
 Private Commercial Banks (PCBs): There are 39 private commercial banks which are
majorly owned by the private entities. PCBs can be categorized into two groups:
 Conventional PCBs: 31 conventional PCBs are now operating in the industry. They
perform the banking functions in conventional fashion i.e. interest based operations.
 Islami Shariah based PCBs: There are 8 Islami Shariah based PCBs in Bangladesh and
they execute banking activities according to Islami Shariah based principles i.e. Profit-
Loss Sharing (PLS) mode.
 Foreign Commercial Banks (FCBs): 9 FCBs are operating in Bangladesh as the branches
of the banks which are incorporated in abroad.

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There are now 4 non-scheduled banks in Bangladesh which are:

 Ansar VDP Unnayan Bank,

 Karmashangosthan Bank,
 ProbashiKollyan Bank,
 Jubilee Bank

3.2 CSR in Banking Sector of Bangladesh

The modern concept of Corporate Social Responsibility (CSR) is evolving gradually despite
several hindrances. Driving forces behind this evolution is pressure from various stakeholders
(Importers, Environmentalists) while slow progress is attributed to lack of Good Governance,
absence of strong labor unions, consumer forums and above all lack of understanding by
business houses, specifically non-exporting ones, that CSR is not charity but is rather an
instrumental PR investment. Corporate Social Responsibility (CSR) is gaining fast global
acceptance as a standard to assume environmentally sustainable and socially equitable business
practices. The role of business world-wide and specifically in the developed economies has
evolved from classical 'profit maximizing' approach to a 'social responsibly' approach, where
businesses are not only responsible to its stockholders but also to all of its stakeholders in a
broader inclusive sense. With increased globalization, local businesses are being integrated with
the global economy than ever hence pressure is mounting on local businesses to converge on
international standards of socially responsible business. As a member of the global economy,
Bangladesh is also aware of the need to take positive initiative to establish an image of
environmentally and socially responsible businesses. CSR as a concept is being gradually
interwoven into the psyche of local business, however, the process is slow and only in its
infancy. In most of the cases, CSR practices are not particularly framed in the context of seeing
to in that the money being given as corporate donations had been part of a sustaining community
development effort.

The banking sector of Bangladesh has been actively participating in various social activities.
However, these efforts were hardly recognized and labeled as CSR activities since most of the
financial institutions have not integrated CSR in their routine operation; rather these were in the
form of occasional charity or promotional activities. Bangladesh Bank has taken initiatives in

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respect of formalizing CSR in the banking sector of Bangladesh and issued a directive to the
banks and, financial institutions on June 01, 2008 in this regard. It defined the strategic objective
for CSR engagement, provided some priority areas with a suggestion to foster CSR in their client
businesses, and suggested a first time CSR program indicating some likely action plans.
Bangladesh Bank will monitor CSR adoption and CSR performance of banks and financial
institutions, as an additional dimension of their management performance. Bangladesh Bank also
had the opportunity to provide a sense of direction to the CSR agenda of the banking sector when
it suggested that, banks which are taking measures for rehabilitating, agriculture, fisheries,
livestock, and protecting environment, will be considered as more compliant of Corporate Social
Responsibility besides providing relief to the people affected in disaster like 'Sidr' , 'Aila' and
collaps in ‘Rana Plaza’. The banking community has responded sensibly to the call for CSR and
sustainable social development. We are also observing a gradual but qualitative change in the
CSR action programs undertaken by banks. For example:

 Disaster relief and rehabilitation became the segment where the highest number of
banks participated to help case the sufferings of the affected people. In the current
context, there is a desired move from the traditionally popular fields of education
or health.
 Several banks introduced micro-finance for the target groups, such as poor
farmers, landless peasants, women entrepreneurs, rootless slum people,
handicapped people, etc.
 More and more banks have taken long-term or renewable scholarship programs
for under-privileged but meritorious students for the persuasion of their studies,
instead of providing one-time recognition awards to good performers.
 Some banks choose to provide continued financial support for maintaining
operating costs of health care organizations.

Without a 'governance framework', businesses may face substantial difficulties in finding and
maintaining appropriate boundaries for their CSR interventions, and they may find themselves
pressured into activities that are beyond their core competence and represent a financial drain on
business rather than a sensible CSR investment. The initiative of Management and Resources
Development Initiative (MRDI) aiming at proper utilization of CSR funds by means of seeking

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commitment from the leaders of trade and industry to undertaken target-oriented actions for
sustainable social development is appreciable. MRDI has right pointed out that as an alternative
development funds, CSR can contribute to poverty reduction and supplement government's
efforts towards achieving the millennium development goals. In a developing country like ours
with modest resources, it is important that we deploy our resources most usefully, and hence, we
should make an effort to have an overall national policy on CSR that starts from building
understanding of CSR incentives and pressure points and improving strategic interactions and
alignment between public policy goals and the CSR-related activities of businesses.

3.3 Highlights of Recent Engagements of Banks in CSR Practice

CSR initiatives of banks mainly focus on

 Financial inclusion of less privileged population segments and underserved

economic sectors,
 Promotion of health, education and cultural/recreational activities for
advancement and well being of underprivileged population segments,
 Promotion of environment friendly projects,
 Humanitarian & disaster relief,
 Adoption of energy efficient, carbon footprint reducing internal processes and
practices in own offices and establishments.

Besides continuation and expansion of previous engagements in these areas, interesting newer
directions/newer thrusts seen in the recent CSR reports of banks included:

 A safe drinking water project was commenced by one of the banks to provide safe water
to 0.25 million people and sanitation to 0.4 million people in the north-east and north-
western regions of Bangladesh.
 Distribution of sewing machines among the women of Somvupura union under
Sonargaon upazila for increasing their self-reliance and well off condition.
 Distribution of formalin D-Hydrate Machine to Malibag Bazar Banik Samabay Samity
Ltd. for detecting formalin mixed product.

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  Establishing a woman’s training center at Bashatpur, Jessore to train and rehabilitate poor
and helpless women especially those who are victims of human trafficking.
 Establishing ‘Gaon Shwapno’- an initiative supporting marketing of crafts and services
produced by distressed poor women.
 Introducing Krishak Card for farmers of northern region of the country to enable them to
buy seeds, fertilizer, pesticides and other agricultural materials.
 Undertaking projects promoting low carbon emission where recycled papers are used as
raw materials for production of finished goods, leading to conservation of trees.

Besides CSR initiatives involving direct expenditure, all banks participated actively in promoting
SMEs and agricultural financing. PCBs were particularly active in these areas. Banks proceeded
ahead on multiple fronts including increased rural bank branch presence for broader, deeper
financial inclusion, mobile phone banking, and opening of bank accounts with Taka 10 as initial
deposit for farmers/poor/ultra poor and thereby increasing transactions in these bank accounts.

In terms of direct monetary expenditure, engagements of banks in CSR initiatives are increasing,
particularly following issuance of BB guidance (DOS Circular No 01 Dated 1st June 2008):

Table 1: CSR Expenditure in banking sector

Year 2009 2010 2011 2012 2013
CSR expenditure 553.80 2329.80 2188.33 3046.69 4461.8
(million Taka)
Sources: Review of CSR Activities of Financial Sector- 2012 & Annual Reports of Bangladesh Bank

3.4 CSR Expenditures by Banks

The banking sector of Bangladesh has a long history of involvement in benevolent activities like
donations to different charitable organizations, to poor people and religious institutions, city
beautification and patronizing art & culture, etc. Recent trends of this engagement indicate that
banks have organized these involvements in more structured CSR initiative format. Table 2
presents Sectoral pattern of CSR expenditure reported by Banks.

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 Table 2: Sectoral pattern of CSR expenditure

Year Humanitarian Education Health Sports Art & Environment Others Total
& disaster culture
relief
2009 125.1 94.8 245.5 1.2 0.3 - 86.9 553.8
2010 460.41 400.79 689.07 265.23 328.91 59.78 125.58 2329.77
2011 188.03 612.48 520.42 359.07 171.52 138.07 198.73 2188.32
2012 788.37 983.69 435.43 183.85 213.31 140.23 301.81 3046.69
2013 792.3 1238.6 1058.2 208.8 368.2 128.5 667.2 4461.8
Sources: Review of CSR Activities of Financial Sector- 2012 & Annual Reports of Bangladesh Bank

Commercial banks contributed major share of CSR in education, health & disaster management
on the other hand sports, art and culture environment got less attention. Notable specific share of
expenditure in CSR programs of banks in recent few years are as follows:

Chart 1 : Sectoral shares of CSR expenditure

100%
80%
60%
40%
20%
0%
2009 2010 2011 2012 2013

Humanitarian & disaster relief Education Health

Sports Art & culture Environment
Others

Following are some notable features observed from the CSR activities carried out by the banks:
 In a natural calamity-prone area like Bangladesh, there remains an existing and
distinctive CSR agenda focused on the business contribution to tackling social crises in
the affected area. Disaster relief and rehabilitation became the segment where the highest
number of banks participated to help ease the sufferings of the affected people. In the
current context, a desired move from the traditionally popular fields of education or
health.

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  In the education segment, more and more banks have taken long-term or renewable
scholarship programs for under-privileged but meritorious students for the persuasion of
their studies instead of providing one time recognition awards to good performers.
 Some banks choose to provide continued financial support for maintaining operating
costs of health care organizations. A bank undertook a continuous program called ‘Smile
Brighter Program’ to perform as many operations possible per year on cleft-lipped boys
and girls to bring back smile on their face.
 Several banks have taken steps and introduced investment schemes to cater the needs of
self-employment and poverty alleviation under which micro-finance is channeled to the
target groups, such as poor farmers, landless peasants, women entrepreneurs, rootless
slum people, handicapped people, etc.
 A few banks have taken steps to introduce Interest-free Education Loan to poor and
meritorious students to help bear monthly educational expenditure including food,
accommodation etc. The loan is distributed to the selected students in monthly
installments till their completion of studies up to the Masters Degree level.
 A good number of banks have created separate Foundation/Trusts as non-profitable,
nongovernmental organization, solely devoted to the cause of charity, social welfare and
other benevolent activities towards the promotion CSR objectives. These banks are
providing a certain percentage of the pre-tax profit/net profit each year towards its CSR
activities.

3.5 Institutionalizing CSR at Corporate Level

The BB guidance circular suggested embracing of CSR with decisions taken at the highest
corporate level (board of directors of the bank), and to choose action programs and performance
targets through a consultative processes involving the internal and external stakeholders
concerned.All banks have embraced CSR with decision at the highest corporate level. 16 PCBs,
3 SOCBs and 1 FCB have formed separate Foundations or Trusts as non-profitable
institutionssolely devoted to the cause of charity, social welfare and other benevolent activities
towardsthe promotion of CSR objectives. These banks have committed to specified percentages
of theirpre-tax profit/net profit each year towards CSR activities.

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 Chapter 4
CSR practice of commercial banks of
Bangladesh

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4.1 CSR contribution of commercial banks of Bangladesh
All commercial banks in Bangladeshundertake the CSR program in recent time. These activities
have a huge impact in the social & economic development of our country. As we have taken
eleven banking institutions including 3 SOB’s and 8 PCB’s as sample. The contributions of those
eleven sample banks are described in this section.

4.1.1 Janata Bank Ltd. (JBL)

Being one of the major State Owned commercial banks in Bangladesh, Janata BankLimited has
also realized its responsibilities to the society and contributed to theamelioration of the social life
of the destitute people, infra-structure, environment etc. They believe that it is its responsibility
to improve the living standard of the poor people,to try to alleviate poverty from the society and
to contribute in the field of education,health care, sports, culture & tradition, information
technology, rehabilitation etc.Table 5 projects the earnings after tax and category-wise CSR
contribution for last five years

Table 3: CSR contribution by JBL

Category of CSR (BDT in millions)
Year EAT
Education Health Poverty Subsidy Culture Information Natural Others Total
& Reduction & to the & Technology Disaster
Research Rehabilitation marginal Tradition
farmer
2009 2,804.25 5.54 4.18 1.80 0.00 2.85 0.20 2.50 0.00 17.07
2010 4,907.97 6.77 15.99 14.37 11.10 9.64 2.92 0.00 0.49 61.28
2011 4,444.91 12.41 21.89 5.24 7.50 12.58 6.58 0.33 2.27 68.80
2012 (15280.34) 28.32 34.78 13.06 5.00 12.86 14.58 0.07 4.71 113.38
2013 9551.39 79.53 38.06 94.38 10.00 39.76 20.31 2.39 7.85 292.28
Source: Annual reports of RBL (2013)

The total contribution in CSR has increased significantly in recent year especially in last two
years. In 2013 JBL contributed Tk. 292.28 millions in CSR and the highest contribution sector
contributed by JBL is poverty reduction & rehabilitation sector. It donated 32% of their total
CSR in this sector. They also contributed 27% of total donation to education, 13% to health, 14%
in culture and rest of donation made in other different sector.

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4.1.2 Rupali Bank Ltd. (RBL)

CSR initiatives of Rupali Bank Limited aim to make business more committed towardsocial
needs and national development through ethical, legal and commercial conduct.RBL is
performing CSR activities in different sectors, including education, health,disaster,sports,
industry, literature, and cultural sector. CSR initiatives by RBL in the last few years are
presented in the table 6:

Table 4: CSR contribution by RBL

Year EAT Category of CSR (BDT in millions)
Education Health Poverty Art & Disaster Socio- Environment Others Total
Reduction & Culture economic
Rehabilitation Development
2011 3603.60 1.82 0.97 6.41 2.07 3.80 1.20 0.57 0.20 17.04
2012 3674.60 1.99 2.18 3.57 0.77 2.50 3.18 0.80 0.30 15.29
2013 2052.60 10.72 2.79 3.51 2.80 6.49 4.17 1.20 0.50 32.18
Source: Annual reports of RBL (2013)

In 2013, RBL contributed Tk. 32.18 million to CSR activities. It was almost double from the
previous year. The highest amount (33%) is being paid to education sector. They also contributed
9% in health, 11% in rehabilitation, 9% in art & culture, 20% in disaster, 13% in socio-economic
development, 4% in environment and 1% in other sector.

4.1.3 Agrani Bank Ltd. (ABL)

Agrani Bank Limited is committed to contribute towards social development through its CSR
program. ABL’s ethicalstandard is not only meant for maximizing profit, rather its vision is to
build up a society where human dignity andrights receive the highest consideration and
evaluation. Bank’s motto is also to improve the society and its culture bymeans of
CSR.Category-wise CSR activities and profit after tax of the Bank for two years are as follows:

Table 5: CSR contribution by ABL

Year EAT Category of CSR (BDT in millions)
Education Health Disaster Environment Sports Arts & Other Total
Relief Culture s
2012 (18620.6) 28.12 8.53 1.42 0.70 2.11 4.85 7.57 53.30
2013 9048.90 14.33 15.4 26.22 8.05 7.69 3.91 8.12 83.72
2014 1986.14 34.46 5.18 0.20 0.00 2.01 10.95 4.38 57.18
Source: Annual reports of ABL (2013)

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Contribution in CSR by Agrani Bank Ltd has increased by Tk. 32.42 million in 2013 against the
previous year. ABL contributed Tk. 83.72 million in 2013. Out of this grand total their highest
contributing sector (31%) is disaster relief. They also contributed 17% in education, 18% in
health, 10% in environment, 9% in sports, 5% in arts & culture and 10% in other social cause.

4.1.4 Dutch-Bangla Bank Ltd. (DBBL)

DBBL as a responsible corporate body is fully aware of itsresponsibility about how its
operational activities impactits stakeholders, the economy, the society, its staff andthe
environment. Conducting business in an ethical way, creating opportunities for business &
economic growth, empowering people to fulfill their aspirations, ensuringprotection of
environment while financing businessesand supporting the distressed people of the society
areatthe heart of social cause policy of DBBL. DBBL since itsinception in 1996 had adopted the
policy of contributingto the social cause. It has been continuing its effortduring the last 18 years
as a pioneer in the bankingsector and has become the leader much ahead of theother banks. To
that end in view the Bank establishedDutch-Bangla Bank Foundation which has been
renderingservices to various fields relentlessly where it is necessarycovering the areas of
education, health care, naturalcalamities as well as man-made disaster.

Table 6: CSR contribution by DBBL

Year EAT Category of CSR (BDT in millions)
Education Health Disaster Social Community Sports Others Total
awareness & Road
Safety /
Social
development
2010 2002.30 50.16 27.02 12.50 0.00 0.00 5.00 30.75 125.43
2011 2154.90 210.46 27.15 57.71 23.76 6.79 3.40 10.18 339.45
2012 2314.10 324.59 36.65 57.59 41.88 52.35 5.24 5.23 523.53
2013 2000.76 365.38 59.19 193.25 69.33 81.00 7.00 12.35 787.50
2014 2206.63 513.18 412.77 111.56 11.16 44.62 0.00 22.31 1115.60
Source: Annual reports of DBBL (2009-2014)

DBBL’s contribution in CSR is increasing rapidly in recent past years. In the year 2014 DBBL
contributed Tk. 1115.60 million in CSR which was 41.66% higher than 2013.The Bank dreams
of a country free from hunger anda society free from vices. It is not possible withouteducation.
As such the bank places much importanceon education. They contributed 46% of its total

32 | P a g e
donation in education sector. They also donated 37% of its money in health sector, 10% in
disaster, 1% in social awareness, 4% in social development and 2% in other social cause. They
started to focus on social development, social awareness sector during last 4 years where we see
there was no contribution in these two particular sectors before the year 2011.

4.1.5 Islami Bank Bangladesh Ltd. (IBBL)

IBBL, the first Shariah based Islami commercial bank in the Southeast Asia, is playing
aremarkable role in alleviating poverty across the country through performing
enormousCorporate Social Responsibility (CSR) activities in different vital sectorsThe CSR
program of IBBL aims at the welfare and wellbeingof the people of the earth, the planet itself
and all itsstakeholders. Keeping that in view triple bottom line hasbeen introduced i.e. People,
Planet and Profit. IBBL has beenplaying a very significant role in performing CSR activities in
different sectors, includingeducation, health, environment, sports, industry, literature, cultural
and relief sector through the bank’s Social Affairs Department. Islami Bank Bangladesh Limited
(IBBL)operates various welfare activities directly and through Islamic Bank Foundation (IBF).

Category wise CSR expenditure along with earnings after tax is presented in the table 9:

Table 7: CSR contribution by IBBL

Year EAT Category of CSR (BDT in millions)
Education Health Humanitarian Sports Art & Environment Others Total
& Disaster Culture
Relief
2010 4,463.47 67.8 64.11 64.06 12.00 11.22 7.36 11.87 238.42
2011 4,841.45 56.17 25.78 21.79 248.75 7.15 0.48 50.55 410.67
2012 5,338.91 83.8 39.75 87.93 1.61 8.24 12.48 75.38 309.19
2013 4,948.58 135.26 71.50 140.1 78.97 5.86 22.94 21.79 476.42
2014 3,999.06 161.34 89.47 190.16 40.2 15.21 21.12 7.02 524.52
Source: Annual reports of IBBL (2010-2014)

CSR expenditure of IBBL has increased by nearly 10% in the year 2014 compared to 2013. They
donated total amount of Tk. 524.52 million in 2014. They donated highest amount of money
(36%) in humanitarian & disaster relief in the last year. Out of Tk. 524.52 million they also
contributed 31% in education, 17% in health, 8% in sports, 3% in art & culture, 4% in
environment and 1% in other sector.

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4.1.6 Mercantile Bank Ltd (MBL)

MBL is fully committed to conduct its business activities in economically, environmentally and
socially sustainable manner. It fosters the motive in mind to build a long-term good relationship
with the customers, shareholders, the regulatory bodies and other stakeholders of the bank. In
order to perform CSR, the bank has formed a foundation namely “Mercantile Bank Foundation”
that plays its role mainly by extending social beneficial services. The foundation strives to
preserve and promote cultural heritage and support artistic expression. Each year the bank
donates 1% of its operating profit to the foundation for continuing CSR activities.Segment-wise
contribution under CSR activities ofMercantile Bank Foundation is furnished below (Table 10):

Table 8: CSR contribution by MBL

Year EAT Category of CSR (BDT in millions)
Education Health Disaster Sports Art & culture others Total
management
2009 807.52 2.70 7.95 0.00 0.93 6.69 12.35 30.62
2010 1,425.34 7.19 13.15 11.87 7.88 14.42 11.4 65.91
2011 1,734.18 11.80 14.10 9.20 1.90 4.80 7.60 49.40
2012 1,381.45 13.80 26.80 17.5 2.40 1.80 23.60 85.90
2013 1,978.70 14.00 8.40 28.4 5.80 0.20 26.30 83.10
2014 1,188.51 1.90 13.50 22.4 0.60 0.80 13.80 53.00
Source: Annual reports of IBBL (2009-2014)

In the year MBL contributed Tk. 53 million in CSR which was decreased by Tk. 30 million from
the previous year due to fall of earning after tax. As we see disaster management got most
emphasis in that year as they donated Tk. 22.4 million in this sector. Apart from this sector MBL
also make a good contribution in education, health, sports, art & culture etc

4.1.7 Trust Bank Ltd. (TBL)

Corporate Social Responsibility holds the bank accountable for the social, environmental and
economic impact of its operations. TBL designs its policies and business practices to reflect the
highest standards of corporate governance. Contributing to the society through
financialassistance to the cause of social concern isof prime responsibility of Trust Bank
Limited.As part of CSR through direct participationprogram, the Bank established a
specialreserve fund named ‘Trust Bank LimitedSpecial Reserve Fund’ in 2009. An amountnot

34 | P a g e
exceeding 5 percent of Bank ’ s operatingincome every year is transferred to the fund. .
Education, Disaster relief, sports, environment and minimizing socioeconomic inequalities have
been the major focus of Trust Bank’s CSR agenda.Year wise donations to CSR fund is
providedin the below (table 11).

Table 9: CSR contribution by TBL

Year EAT Category of CSR (BDT in millions)
Education Health History Natural Sports Poverty Other Total
& culture & Disaster Reduction &
Training Religion Rehabilitation
2009 610.91 46.00 0.00 0.00 2.50 6.00 0.50 0.10 55.10
2010 645.74 23.80 3.41 5.00 4.60 3.00 1.68 0.00 41.49
2011 616.21 43.98 26.51 5.00 0.00 1.00 2.50 2.47 81.46
2012 182.70 70.75 14.67 28.8 1.96 1.20 1.50 3.17 122.05
2013 324.44 39.93 31.11 0.00 1.75 1.25 0.00 1.84 75.88
2014 1,299.19 23.30 41.62 10.00 1.87 1.50 0.00 1.21 79.50
Source: Annual reports of TBL (2009-2014)

TBL didn’t contribute in CSR in a consistent manner. Their CSR expenditure was lower in the
last two years than previous years. However in 2014 they contributed total amount of Tk. 79
million. Out of this amount majority of the money 52% was contributed in health sector.
Education is the second position where they contributed 29 % and 13%, 2%, 2% 2% were
contributed to history & culture, natural disaster, sports and other sector respectively.

4.1.8 Bank Asia Ltd. (BAL)

Bank Asia always continues its efforts to look beyond short-term quantitative gains, andto
concentrate on issues that make the institution socially responsible and have given allout efforts
towards sustainable balanced growth. It considers socially responsibleactivities as an important
part of its culture, identity and business practice. So, itcontributes to improve the livelihood
opportunities of the less fortunate, provision offacilities for education and health, protection of
the environment, and encouragement ofcultural and social activities in the rural as well as urban
areas. A clear picture ofBAL’s CSR initiatives is presented in the next page (Table 12).

BAL contributed Tk. 239.84 million in the year 2014 which was 80% higher than the previous
year’s CSR expenditure. Out of this total amount they contributed 5% in education, 38% in
health, 5% in disaster management, 7% in culture, 2% in sports and 43% in others areas

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 Table 10: CSR contribution by BAL
Year EAT Category of CSR (BDT in millions)
Education Health Disaster Environment Sports Art & Others Total
management Culture
2010 1929.58 8.31 2.55 2.98 1.39 7.50 10.20 0.50 33.43
2011 1916.21 15.95 1.43 0.69 1.06 0.05 0.51 6.41 26.10
2012 908.00 18.44 5.74 21.55 1.23 1.23 0.47 20.79 69.45
2013 1459.82 30.74 72.58 21.15 0.74 3.61 1.58 2.57 132.97
2014 2218.69 13.44 90.28 11.14 0.12 5.20 16.12 103.54 239.84
Source: Annual reports of BAL (2010-2014)

4.1.9 Southeast Bank Ltd (SEBL)

SEBL’s CSR activities follow transparent businesspractices that are based on ethical values,
compliancewith legal and regulatory requirement and respect forpeople, communities and the
environment. They areresponsible for the totality of our impact on peopleand the planet, beyond
making profit. Their corporatesocial responsibility is about addressing the needsof all the
stakeholders in a way that advances itsbusiness and makes a positive and meaningfulcontribution
to the society. Their main contributing sector under CSR is education, health, humanitarian &
disaster, sports & culture etc. CSR expenditure of this bank are presented here (Table 13)

Table 11: CSR contribution by SEBL

Year EAT Category of CSR (BDT in millions)
Education Health Humanitarian Sports & Others Total
& Disaster Culture
2010 2,763.93 16.21 3.75 5.86 12.76 3.67 42.25
2011 1,912.19 14.16 5.48 3.36 4.80 13.34 41.14
2012 1,648.72 20.07 3.37 3.36 2.52 7.53 36.85
2013 3,378.82 32.77 5.31 25.29 3.86 8.77 76.00
2014 3,836.94 37.66 9.76 17.53 10.5 16.83 92.28
Source: Annual reports of SEBL (2010-2014)

SEBL contributed Tk. 92.28 million in last year of which education got the most preference.
They donated 41% of their total contribution in education sector. They also contributed 11% in
health, 19% in Humanitarian & Disaster, 11% inSports & Culture and 18% in other social cause.

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4.1.10 One Bank Ltd. (OBL)

The benefits of CSR for companies, including increased profits, customer loyalty,trust, positive
brand attitude and combating negative publicity, are welldocumented.In the light of these known
positive effects, CSR strategies havebeen embraced by the banking community. Bangladesh is
also graduallybecoming proactive on Corporate Social Responsibility. One Bank Ltd. has been
keeping watch on the environmental and social impacts ofproposed undertakings and their
implementation of equity of rights irrespectiveof gender, creed, and color etc. policies. The Bank
strives to convince the clientsto pursue environment friendly and socially proactive & mitigate
policies forsustainable development.Details of CSR activities undertaken by the Bank during the
last five years are as below (Table 14):

Table 12: CSR contribution by OBL

Year EAT Category of CSR (BDT in millions)
Education Health Humanitarian & Sports & Others Total
Disaster Culture
2010 1,887 0.21 0.24 1.25 2.50 0.00 4.20
2011 1,449 1.82 0.24 0.75 0.50 2.60 5.91
2012 1,055 3.46 0.37 0.60 0.30 7.38 12.11
2013 1,349 10.84 0.24 23.47 0.00 0.00 34.55
2014 2,096 13.55 0.97 5.19 5.10 9.74 34.55
Source: Annual reports of OBL (2010-2014)

One bank started to increase its CSR expenditure from last two years. They contributed in CSR
same amount of Tk. 34.55 million in last two years. From their total contribution education,
health, humanitarian & disaster, sports & culture got the most priority.

4.1.11 Social Islami bank Ltd

SIBL has been responding spontaneously to its social commitment. As part of Corporate Social
Responsibility (CSR), welfare activities of Social Islami Bank Limited (SIBL) are being carried
out mainly from (1) profit of Cash Waqf Fund (2) Compensation Fund (3) Doubtful Income and
(4) Zakat Fund. The following table states the details CSR program of SIBL during last four
years.

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 Table 13: CSR contribution by SIBL
Year EAT Category of CSR (BDT in millions)
Education Health Disaster Sports Art & environment others total
culture
2011 1083.42 0.57 0.73 15.99 0.00 2.3 0.00 19.59
2012 1441.12 2.46 1.45 14.77 13.28 0.025 16.8 48.785
2013 1220.2 2.96 3.77 22.12 19.09 2.68 2.54 53.16
2014 1903.72 3.32 3.84 38.75 0.22 11 7.95 65.08
Source: Annual reports of OBL (2010-2014)

SIBL donated Tk. 65.08 million in the year 2014. Out of this amount they contributed 5% in
education, 6% in health, 60% in Disaster, 17% in sports & culture and 12% in environment
sector.

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 Chapter 5

Analysis & Interpretation

39 | P a g e
5.1 Comparison of selected banks according to different category

In our country Commercial banks generally contribute as CSR expenditure to education, health,
humanitarian & disaster management, culture & sports, rehabilitation, poverty reduction & social
development, environment, information technology and miscellaneous sector. Comparison
among selected banks according to different CSR category is described in this section.

5.1.1 Education

Education is the most important CSR area in Bangladesh. Table 16indicates contribution of
education areas of 11 banks:

Table 14: Contribution to Education (BDT in millions)

Year JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL
2011 12.41 1.82 N/A 210.46 56.17 11.80 43.98 15.95 14.16 1.82 0.57
2012 28.32 1.99 28.12 324.59 83.80 13.80 70.75 18.44 20.07 3.46 2.46
2013 79.53 10.72 14.33 365.38 135.26 14.00 39.93 30.74 32.77 10.84 2.96
2014 N/A N/A 3.46 513.18 161.34 1.90 23.30 13.44 37.66 13.55 3.32
Sources: Annual Reports (2011-2014) of Sample Banks

Chart 2: CSR Contribution in Education

600

500

400
2011

300 2012
2013
200
2014
100

0
JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL

DBBL shows a strongcontribution then other banks. They contributed the highest amount of
money in education sector in last 4 years. Then IBBL, JBL, SEBL & TBL also contributed a
healthy amount of money under this category. While MBL, RBL, SIBL& OBL contributed
relatively lower amount.

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5.1.2 Health

Health sector is another important CSR area practiced by commercial banks in Bangladesh. All
commercial bankswork for ensuring better medical service to the helpless people side by side
they also provide personal donation for medical treatment of poor people. Table 17 presents
health areas contribution of 11 banks:

Table 15: Contribution to Health (BDT in millions)

Year JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL
2011 21.89 0.97 N/A 17.15 25.78 14.10 5.74 1.43 5.48 0.24 0.73
2012 34.78 2.18 8.53 36.65 39.75 26.80 72.58 5.74 3.37 0.37 1.45
2013 38.06 2.79 15.40 59.19 71.50 8.40 90.28 72.58 5.31 0.24 3.77
2014 N/A N/A 5.18 412.77 89.47 13.50 41.62 90.28 9.76 0.97 3.84
Sources: Annual Reports (2011-2014) of Sample Banks

Chart 3: CSR Contribution in Health

450
400
350
300
2011
250
2012
200
2013
150
2014
100
50
0
JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL

DBBL also remain in the top ranking in this area in 2014. But IBBL, TBL, BAL & JBL also
contributed huge money in this category during last few years. On the other hand OBL & SIBL
is in the lowest position among the banks.

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5.1.3 Humanitarian & disaster management

Disaster relief and rehabilitation became the segment where the highest number of banks
participated to help case the sufferings of the affected people. During the time of natural
calamities commercial banks come forward to help the affected people for humanitarian
reason.Table 18 presents CSR contribution of different banks in the area of humanitarian &
disaster management.

Table 16: Contribution to humanitarian & disaster management (BDT in millions)

Year JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL
2011 0.33 3.80 N/A 57.71 21.79 9.20 0 0.69 3.36 0.75 15.99
2012 0.07 2.50 1.42 57.59 87.93 17.50 1.96 21.55 3.36 0.60 14.77
2013 2.39 6.49 26.22 193.25 140.10 28.40 1.75 21.15 25.29 23.47 22.12
2014 N/A N/A 0.20 111.56 190.16 22.40 1.87 11.14 17.53 5.19 38.75
Sources: Annual Reports (2011-2014) of Sample Banks

Chart 4: CSR Contribution in Humanitarian & Disaster management

250

200

150 2011
2012
100 2013
2014
50

0
JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL

In the area every bank has participation. IBBL & DBBL are comparatively ahead than others.
MBL & SIBL also showed a good participation in this sector. TBL and JBL are seen as small
contributor in this area.

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5.1.4 Culture & Sports

Culture & sports represent a country to the world. Commercial banks in our country being
socially responsible sponsor this sector regularly. Table 19 shows the CSR contribution by
sample 11 banks in culture and sports.

Table 17: Contribution in culture & sports (BDT in millions)

Year JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL
2011 12.58 2.07 N/A 3.40 255.9 6.70 6.00 0.56 4.80 0.50 2.30
2012 12.86 0.77 6.96 5.24 9.85 4.20 30.00 1.7 2.52 0.30 13.30
2013 39.76 2.80 11.60 7.00 84.83 6.00 1.25 5.19 3.86 0.00 21.80
2014 N/A N/A 12.96 0.00 55.41 1.40 11.50 21.3 10.5 5.10 11.20
Sources: Annual Reports (2011-2014) of Sample Banks

Chart 5: CSR Contribution in Culture & sports

300

250

200
2011

150 2012
2013
100 2014

50

0
JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL

IBBL is the highest contributor in this area. JBL, ABL, BAL, SIBL & TBL had also a good
contribution. Surprisingly DBBL has no contribution in this area in last year though they are the
top contributor of CSR in total amount. Rather RBL and OBL also contributed very insignificant
amount in this particular area.

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5.1.5 Rehabilitation, poverty reduction & social development

Commercial banks of Bangladesh play an important role in Rehabilitation,poverty reduction and

social development through their CSR contribution. They help the disabled families and
contribute in socio economic development of our country. Their effort assists to reduce poverty
in our country. Table 20 represents the CSR contribution of 11 banks under the category of
rehabilitation, poverty reduction & social development.

Table 18: Contribution in rehabilitation, poverty reduction & social development

(BDT in millions)
Year JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL
2011 5.24 7.61 N/A 30.55 - - 2.5 - - - -
2012 13.06 6.75 - 94.23 - - 1.5 - - - -
2013 94.38 7.68 - 150.3 - - 0 - - - -
2014 N/A N/A - 55.78 - - 0 - - - -
Sources: Annual Reports (2011-2014) of Sample Banks

Chart 6: CSR Contribution Rehabilitation, Poverty Reduction &

Social Development
160

140

120

100 2011

80 2012

60 2013
2014
40

20

0
JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL

Only four banks contributed in this sector. Among them DBBL was in the first position then JBL
in the second. ABL, IBBL, MBL, BAL, SEBL, OBL and SIBL didn’t contribute any amount in
this area.

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5.1.6 Environment

Environment is the most essential element for living. Commercial banks are also committed to
improve environmental situation of our country. According to the table 21 we see only 5 banks
pay proper attention in this regard. Among them DBBL contributed the highest amount of money
in this field. On the other hand JBL, IBBL, MBL, TBL, SEBL and OBL had no contribution in
this issue.

Table 19: Contribution in environment (BDT in millions)

Year JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL
2011 - 0.57 N/A 0.48 - - - 1.06 - - -
2012 - 0.80 0.7 12.48 - - - 1.23 - - 16.8
2013 - 1.20 8.05 22.94 - - - 0.74 - - 2.54
2014 N/A N/A - 21.12 - - - 0.12 - - 7.95
Sources: Annual Reports (2011-2014) of Sample Banks

Chart 7: CSR Contribution in Environment

25.00

20.00

15.00 2011
2012

10.00 2013
2014

5.00

0.00
JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL

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5.1.7 Information technology

Information technology is the most concerning issue in modern era. But it is matter of regret that
only Janata Bank Ltd had contributed in this sector.

Table 20: Contribution in Information Technology

(BDT in millions)
Year 2009 2010 2011 2012 2013

JBL 0.2 2.92 6.58 14.58 20.31

Sources: Annual Reports (2011-2014) of Sample Banks

5.1.8 Miscellaneous

There is some CSR expenditure which may not be fall under any category presented in
miscellaneous sector. Generally banks donate in different program beyond these category
discussed above. Table 23 shows the CSR expenditure by sample banks in this sector:

Table 21: Contribution in miscellaneous sector (BDT in millions)

Year JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL
2010 0.49 N/A N/A 30.75 11.87 11.4 - 0.50 3.67 - -
2011 2.27 0.20 N/A 10.18 50.55 7.6 2.47 6.41 13.34 2.6 -
2012 4.71 0.30 7.57 5.23 75.38 23.6 3.17 20.79 7.53 7.38 -
2013 7.85 0.50 8.12 12.35 21.79 26.3 1.84 2.57 8.77 - -
2014 N/A N/A 4.38 22.31 7.02 13.8 1.21 103.54 16.83 9.74 -
Sources: Annual Reports (2011-2014) of Sample Banks

Chart 8: CSR Contribution in Miscellaneous sector

120
100
2010
80
2011
60
2012
40
2013
20
2014
0
JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL

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5.2 Comparison among Banks in Compliance with regulatory framework of CSR

It has already been mentioned that there are 22 CSR contribution areas where an organization could enjoy 10% tax rebate. However,
Table 24 exhibits the compliance of CSR practiced by commercial banks in Bangladesh with the regulatory framework.

Table 22: Compliance with the regulatory framework of CSR

SN CSR Areas JBL RBL ABL DBBL IBBL MBL TBL BAL SEBL OBL SIBL
1 Engaged in clean water management √ - - - - √ - - - - -
2 Engaged in afforestation √ √ √ - - - - - - - -
3 Beautifications of cities √ - √ √ √ - - √ - √ -
4 Waste management - - - - - √ - - - - -
5 Natural calamities √ √ √ √ √ √ √ √ √ √ √
6 Old persons homes - - - - - - - - - - -
7 Mentally or physically handicapped √ - - √ √ √ - - √ √ -
8 Education of rootless children - √ - √ √ √ √ √ - - -
9 Accommodation for the slum dwellers - - - - - - - - - - -
10 Women’s rights and anti-dowry practices - - √ √ √ - √ - -
11 Rehabilitation of orphan/rootless children √ √ - √ √ - √ √ - - -
12 In research on independence war,
regaining and expansion of the
consciousness of the independence war √ √ √ √ √ √ √ √ √ - √
and the act of honorable living of the
freedom fighters
13 Health some sanitation in Chittagong Hill - - - - - - - - - - -
Tracts, char areas and areas surrounding
breaking up of bank of river
14 Engaged in treating cleft lips, cataract, - - - √ √ - √ √ √ - √
cancer, and leprosy
15 Engaged in treating acid victims - - - √ - - - - - - -
16 Hospitals engaged in providing free √ √ - √ √ √ √ √ √ √ √
medical treatment to poor patients

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 17 Birth control products with a view to - - - - - - - - - - -
solving the population problem and to
conduct camps for voluntary sterilization
18 Grants to Public Universities √ √ √ √ - √ √ √ √ - √
19 Technical and vocational education for √ - - √ √ √ √ √ - - -
meritorious poor students
20 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)
21 Technical and vocational training to
unskilled or semiskilled labor for export - - - - - - - - - - -
of human resources
22 Sports and provision of training at - - √ √ √ √ √ √ √ √ √
national level
Total 10 8 8 14 11 10 9 11 8 5 6

Among 22 areas prescribed areas for CSR where company can get 10% tax rebate, only17 areas (77.27%) are participated by 11
sample banks. That means 5 areas of (22.73%) contribution are still unexploited by them.There are only 1 area (100%) where
eachbank took partand the lowest participation is 2 areas (9%). Among the 11 banks DBBL has the highest participation areas (14)
and then BankAsia Ltd (11) IBBL (11). It is clear that participation of CSRareas of different bank is considerably limited because
many areas where the bank has no CSRcontribution that is very concerning issue.

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 5.3 Comparison of CSR contribution in proportion to profit

All the banks like to demonstrate that they are contributing to society, however if wecompare the amount with their income, it shows
that the amount is very little. Table 25shows the relationship between profit before tax and CSR contribution of these six banks. Most
of the banks have contributed a very insignificant amount to CSR in proportion oftheir profit before tax.

Table 23: Comparison of CSR contribution in proportion to profit (BDT in millions)

2009 2010 2011 2012 2013 2014

Banks PBT CSR % of PBT CSR % of PBT CSR % of PBT CSR % of PBT CSR % of PBT CSR % of
Exp profit Exp profit Exp profit Exp profit Exp profit Exp profit

JBL 5,656.29 17.07 0.30% 7,820.43 61.28 0.78% 8,875.66 68.80 0.78% -12834.91 113.38 -0.88% 10,625.32 292.28 2.75% N/A N/A N/A

RBL N/A N/A N/A N/A N/A N/A 2498.70 17.04 0.68% 1274.00 15.29 1.20% 1060.70 32.18 3.03% N/A N/A N/A

ABL N/A N/A N/A N/A N/A N/A N/A N/A N/A 1,006.74 53.30 5.29% 1,063.93 83.72 7.87% N/A N/A N/A

DBBL 2154.40 210 9.75% 3,739.10 125.4 3.35% 4,547.70 329.5 7.24% 4,817.10 523.53 10.87% 3,547.00 787.50 22.20% 4,518.80 1115.6 24.69%

IBBL N/A N/A N/A 8,454.71 238.4 2.82% 10,347.31 410.7 3.97% 11,910.65 309.19 2.60% 11,074.76 476.42 4.30% 10,531.71 524.52 4.98%

MBL 1,911.70 30.62 1.60% 2,847.12 65.91 2.31% 3,501.68 49.40 1.41% 3,350.78 85.90 2.56% 4,255.70 83.10 1.95% 4,410.57 53.00 1.20%

TBL 1,150.57 55.10 4.79% 2,140.36 41.49 1.94% 1,304.20 81.46 6.25% 693.83 122.05 17.59% 1,016.05 75.88 7.47% 2,699.12 79.50 2.95%

BAL N/A N/A N/A 3,579.52 33.43 0.93% 3,432.21 26.10 0.76% 2,723.00 69.45 2.55% 3,520.59 132.97 3.78% 4,216.96 239.84 5.69%

SEBL N/A N/A N/A 4,929.41 42.25 0.86% 4,337.24 41.14 0.95% 3,603.84 36.85 1.02% 6,078.82 76.00 1.25% 6,760.66 92.28 1.36%

OBL N/A N/A N/A 2,680.45 4.20 0.16% 2,240.06 5.91 0.26% 2,060.43 12.11 0.59% 1,776.58 34.55 1.94% 3,202.76 34.55 1.08%

SIBL N/A N/A N/A N/A N/A N/A 1901.28 19.59 1.03% 2747.89 48.785 1.78% 2024.66 53.16 2.63% 3,307.52 65.08 1.97%

Sources: Annual Reports (2009-2014) of Sample Banks

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Among the all banks DBBL contribution is the highest, being 24.69% of their profit before tax in
the year 2014, 22.20% in 2013, 7.47% in 2011, 3.35% in 2010 and 7.39% in 2009. In the year
2012 the highest contribution (17.59%) was made by Trust Bank Ltd. Bank Asia Ltd was in
second position (5.69%) in 2014, Agrani Bank Ltd (7.87%) in 2013, DBBL (10.87%) in 2012,
TBL (6.25%) in 2011, IBBL (2.82%) in 2010 and TBL (4.79%) in 2009.On the other hand
Agrani Bank Ltd is the lowest contributor 0.53%, 0.79%, 0.53%, during the year 2014, 2013 and
2012 respectively. In 2009, 2010 and 2011 the lowest contributor was Janata bank Ltd (0.30%)
and One Bank Ltd (0.16%), (0.26%) respectively.

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 Chapter 6
Findings &Conclusion

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6.1 Findings

This study has found out that CSR activities so far are merely implementedfor maintaining
business policy without really nurturing social and generous intentionsand social accountability.
Most corporate organizations, including sample banks of thisstudy, practice CSR because of their
business enlargement or for promotingorganizational image and recognition. The major findings
are:

 Common CSR practices in Bangladesh by different organization are centered on mainly

poverty alleviation, healthcare, education, charity activities, cultural enrichment,
youthdevelopment, women empowerment, patronizing sports and disaster management
etc.
 Every bank of the study contributed highest amount in education, health and disaster
relief
 Commercial banks are paying more to their CSR activities but not so much as their
earnings increase.
 Participation of different areas of CSR activities of different banks is limited.There are
many areas like engaged in clean water management, engaged in afforestation, waste
management, and old person’s homes,accommodation for the slum dwellers, women’s
rights and anti-dowry practices, birth controlproducts, training for unskilled labors etc
where the banks don’t pay proper attention.
 DBBL is the leading contributor of CSR. They touched highest number (14) of areas and
also donates highest amount in recent times.
 PCBs are more active than SOBs in CSR contribution.

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6.2 Recommendation

For the Banking Companies:

 CSR activities should be taken as more serious issue rather than a promotional tool.
 The variability of perceptions indicates specific areas where to intervene and set
priorities. All the controversial issues should be taken note of and settled through a multi-
stakeholder initiative.
 Environmental concerns and Information technology should receive greater attention by
the banks.
 Gender aspects should be more carefully addressed and monitored for their
implementation.
 CSR expenditure should be increased direct proportion to profit.
 Health and safety issues deserve greater attention given that failure in these areas impact
negatively on the productivity and endanger human life.
 Other banks should follow DBBL as a pioneer of CSR activities.

For the Government:

 Provide policy guidelines for smooth functioning of the banking entities.

 Monitor and enforce laws related to social issues, environment protection, and health and
safety issues.
 Provide the logistic support for enhancing the overall banking sector and carefully
monitor the initiatives of the global trade partners and regimes so as to ensure that the
corporate responsibility issue is not used as a pretext for market access barrier.
 Setting achievable goals and ensuring appropriate monitoring systems in the banks to
look into the corporate-social affairs.
 Ensuring financial independence of banks; and promoting transparency and
accountability in CSR practice.

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6.3 Conclusion

With industrialization, the impacts of business on society and the environment assumed an
entirely new dimension. For this, Corporate Social Responsibility has become a criterion of
socially lawful business endeavor and the acceptance of it is growing day by day. Countries of
developed economy have taken the idea of "Social Responsibility" with that of "Achieving
Highest Profit." Through CSR activities corporate organizations can carry out social and
philanthropic activities for furthering equitable and sustainable social development. This study
has found out that CSR activities so far are merely implemented for maintaining business policy
without really nurturing social and generous intentions and social accountability. Most corporate
organizations, including sample banks of this study, practice CSR because of their business
enlargement or for promoting organizational image and recognition. Although CSR activities
have a high potential for societal contribution, so far there has been a very little contribution
towards family, society and the nation.

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