Independent University, Bangladesh

Project Work

Project Title: Corporate Social Responsibility (CSR) Practices in Commercial

Banks of Bangladesh: A SWOT Analysis

Submitted to
Dr. Md. Anowar Hossain Bhuiyan
School of Business (SB)
Independent University, Bangladesh (IUB)

MBA 515, Sec: 01

Legal & Ethical Issues in Business

Submission Date: 07th May, 2021

Introduction:
The project is about the “Corporate Social Responsibility (CSR) Practices in Commercial Banks
of Bangladesh: A SWOT Analysis.” The ‘social contract’ between the corporation and the
community is of critical importance. Many companies are adopting ‘ethical policies’ or ‘codes of
conduct’ to perform socially (Thomas 2006 and Drucker 1971). The corporate social
responsibility (CSR) is a most important issue in the today’s business areas as well as present
society. Corporate social responsibility (CSR) is responsible for business contribution to
sustainable development and they participate in different sectors those are human resources,
relationship with clients, suppliers and stakeholders. They also focus on corporate governance
environment and contribution to community and society. Bangladesh is a developing country.
Because of global competitiveness and demand, the CSR practices and standards are being
implemented in Bangladesh (Alimullah, 2006).
In Bangladesh; there are some specialized bank and state owned commercial bank, commercial
bank, foreign commercial bank and some non-banking financial institution. Most of the bank
have different department for CSR activities and by which they are also perform their CSR
activities.

Corporate social Responsibility:

Corporate social Responsibility (CSR) is the responsibilities of an organization to proactively
promote the public interest by encouraging community growth and voluntarily eliminating
practices that harm the public interests. CSR is becoming a key initiative and an essential tool in
the development of third world countries throughout the globe. In recent time corporate social
responsibility has got more appropriateness than profit maximization. It is a concept whereby
organizations consider the interests of society by taking responsibility for the impact of their
activities on customers, employees, shareholders, communities and the environment in all
aspects of their operations. In short, corporate social responsibility of business entails the
simultaneous fulfillment of the firm's economic, legal, ethical, and philanthropic responsibilities.

Benefits of corporate social investment for businesses:

 Corporate social responsibility create better brand recognition

 It has positive business reputation
 Corporate social responsibility also increased sales and customer loyalty
 It helps to save operational costs and better financial performance
 it help to increase organizational growth
Application of CSR in Bangladesh:
Companies are facing the challenges of adapting effectively to the changing environment in the
context of globalization. Although consumer rights movement, enforcement of government
regulations and a structured view regarding the economic importance of CSR 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.

CSR in banking sector of Bangladesh:

The banking sector of Bangladesh has been actively participating in various social activities.
This sector is playing an intermediary role between economic development and environment
protection by promoting environmentally sustainable and socially responsible investment.
Bangladesh Bank has taken initiatives in respect of formalizing CSR in the banking sector of
Bangladesh and issued directives to the banks and, financial institutions 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. CSR initiative of banks and NBFIs mainly focuses on
i. Financial inclusion of less privileged population segments and underserved economic
sectors,
ii. Promotion of health, education and cultural/recreational activities for advancement and
well being of underprivileged population segments,
iii. Promotion of environment friendly projects,
iv. Adoption of energy efficient, carbon footprint reducing internal processes and practices
in own offices and establishments

CSR Practices in Commercial Banks of Bangladesh:

In Bangladesh all of the commercial banks participate the CSR programs. These activities have a
large impact in the social and economic development in our country. In this project I am going to
describe three commercial banks CSR activities in brief. After looking over their different kind
of CSR activities we focus on SWOT analysis of these bank to know their overall performance.
CSR details of BRAC Bank Limited: BRAC Bank's CSR Policy is Green Banking.
BRAC Bank Ltd. has undertaken various initiatives considering about the interest of their
customers, employees, shareholders, communities and environment. BRAC Bank’s vision, which
focuses on double bottom line that it should make decisions based on not only profit but also
based on social and environmental consequences, is closely linked to the principles of CSR.
Education:

 BRAC Bank took up a program for providing educational cost for financially challenged
female students at Tetulia Pilot School. Each year, 5 female students of this north-most
school of the country are provided with full tuition, text-book and related support for the
entire year.
 They also donate BRAC Bank-Prothom Alo Adomyo Medhabi.
Health:

 BRAC Bank provides financial aids for the monthly salary of the teaching staff of 12
centers of Hicare. Hicare takes care of the treatment and education of hearing impaired
poor people of the society.
 They stood beside kidney Foundation for building their new premises with the modern
medical equipment and the orthopedic patients for providing them necessary treatment
and artificial body limb in association with Nurture General Hospital.
 BRAC Bank stood beside nearly 70 acid victims of Dinajpur district, in association with
Prothom Alo.
Environment:

 BRAC Bank is working towards reducing waste and the more efficient use of resources
like Free plant distribution, Usage of Re-cycled paper.
 BRAC Bank supports National Defense College of Bangladesh Army for protection
against landscaping & installing solar energy powered lamps.

CSR details of Dutch Bangla Bank Limited: DBBL as a responsible corporate body
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 are some of the important areas where the bank carries out its social and
philanthropic activities.
Environment:
The Bank has taken the following actions to reduce the Bank's adverse impact on environment
because of its operation and business activity:

 Developed Environmental Management System in the year 2002.

  Designated environment officials.
 Developed eco-efficient or sustainable investment scheme namely 'FMO credit line for
setting up ETP' to finance projects aimed at environmental improvement or sustainable
development.

Education:

 Dutch-Bangla Bank Limited has donated an amount of Tk. 2.47 crore to EKMATTRA
for establishing EKMATTRA-Dutch-Bangla Bank Academy to provide education as well
as other facilities for underprivileged children of the country.
 They donated an amount of Taka 9,73,00,000 to Dhaka University for constructing a
research centre for higher studies which is known as “Centre for Advanced Research in
arts & Social Science Bhaban”.

Contribution to Disaster Management:

DBBL has introduced following special programs for the people of the affected areas:

 Dutch-Bangla Bank donated 10,000 blankets to earthquake-victims of Nepal

 Donation to 350 homeless families of Brahmanbaria district affected by Tornado.
 Financial support for rehabilitation of land slide victims of Chittagong.
 Water purifying tablets, oral saline & Cholera saline for the Flood victims.

CSR details of Jamuna Bank Limited:

Environment:

 JBL uses all biodegradable materials for functioning of the bank. They do not use any
plastic folder, instead they use paper folder in all their activities. JBL declares their office
free of smoke.
Health:

 The bank started a 10-bed Drug Rehabilitation Center in Dhaka. It is also planning to
open a Medical college and Hospital at Rangpur and Narayangonj.
 JBL has donated BDT 5.0 million to Kidney Foundation to establish a hospital.
 JBL has donated BDT 9.18 lac to SEID Trust for development of the underprivileged
children with intellectual and mental disabilities.
Financial Inclusion:

 The bank disbursed Tk. 17.79 crore through different MFI under the self-employment
credit and SME lending programs to create new on-farm/off-farm employment.
 In addition, the bank disbursed Tk. 0.005 crore to 2 (two) bio-gas plants and Tk. 0.121
crore to 2 (two) solar plants.
SWOT analysis:
Each and every organization should be aware of their strengths, weaknesses, opportunities and
threats. This analysis is known as SWOT analysis. The strategic alternatives generated by a
SWOT analysis should be built on company’s strengths in order to exploit opportunities and
counter threats and to correct weaknesses. SWOT analysis explains environment of an
organization in two broad ways. They are:

 Internal Environment Analysis: Strengths and Weaknesses

 External Environment Analysis: Opportunities and Threats

During work on this project I have found some aspects relating to the Bank’s which practice
CSR they have some strengths, opportunities, weaknesses and threats, which I think affect the
bank’s performance. These are given below:

1. Benefits of Complying with CSR (strengths)

 Financial performance will improve.

 Enhanced reputation and brand image.
 Less operational cost.
 Easy availability of capital.
 Increased customer loyalty and sales
 Sustainable development.
 Use of recycled products
 Contribution towards society.
 Safety and quality.
 Diversity of employees and customers

2. Hindrance among CSR initiatives (weaknesses)

 There is lack of communication between companies and general public. General public
is very less interested in knowing whether the company is contributing for society,
economy and country.
 Due to lack of transparency among the companies, CSR initiatives can’t be taken as
there is no proper report of profitability, exact information, audit issues and utilization of
funds.
 The people in people take CSR as narrower term but in reality is a broader term if taken
into action.
 There is lack of judgment within a time frame due to which there is duplication of
others’ efforts.
 Lack of visibility factor between companies and the general public.
 Involves lot of money to be spent
3. Opportunities

 Business relationships should be built on mutual understanding and based on realistic and
true statements. This will lead to have great opportunity for being sustainable and
developed.
 Being able to understand the real facts of the environment which helps business as well
as the society.
 As the time and resources are limited, so to grab more power, there is need to put more
efforts and deep understanding of mutual dependency and highest potential of mutual
benefits.
 Better impact of brand image of the business house on the minds of customers
 Better visibility of the business in all areas

4. Threats

 There is lack of public policies to promote CSR.

 There is lack of consistent legislative framework.
 Regulations by the Government to make CSR spending compulsory as a percentage of
their annual profit

Conclusion:
Corporate Social Responsibility is not a single time process. It will go on as the company is
surviving and its activities are running. In modern era, consumer is the king. A company’s
reputation success and survival is in the hands of society. If the companies will do well for the
society, environment, government, stakeholders, consumers and suppliers etc. then only it will be
able to achieve its goals otherwise it will not survive for long. Undoubtedly, companies are
taking initiatives for the CSR activities and they know their responsibilities and duties and they
are also trying to contribute more and more for them. The companies have come to know that
performance of CSR is the need of the hour. CSR has come a long way in Bangladesh. The
banks are integrating their business models with the CSR activities. Hence, banks shall
contribute more and more to make this planet better to live in.
 References

1. Rahman M, Ahsan Ali, Hossian Motahar & Meem Rafiul Hoq (2013), “Green Banking
Prospects In Bangladesh”, Asian Business Review, Vol 2, Issue 4.
2. http://article.sciencepublishinggroup.com/html/10.11648.j.jfa.20150306.20.html

3.http://dspace.daffodilvarsity.edu.bd:8080/bitstream/handle/123456789/3842/P15096%20%282
2_%29.pdf?sequence=1&isAllowed=y