RABINDRA UNIVERSITY, BANGLADESH

DEPARTMENT OF MANAGEMENT STUDIES

Course Name: Bank Management

Course Code: MGT-302
Name of the Assignment Topic: Corporate Social Responsibilities of banks in Bangladesh

Submitted To:
Nusrat Jahan
Lecturer
Department of Management Studies
Rabindra University, Bangladesh

Submitted By:
Md. Sabbir Hossain
ID. 19030108
Session: 2018-2019
Department of Management Studies
Rabindra University, Bangladesh

Submission Date: 14-02-2022

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 Assignment’s Index

Topic Topics Page

No. No.

01 Corporate Social Responsibility 3

02 The important of Corporate Social Responsibility in Bank 3

03 Types of Corporate Social Responsibility in Practice 4-5

04 Corporate Social Responsibility Contribution of Bank in Bangladesh 5-7

05 Conclusion 8

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 Corporate Social Responsibility (CSR)
Meaning: Corporate Social Responsibility is a concept whereby companies integrate social
and environmental concerns in their business operations and interactions with their
stakeholders. It is a self-regulating business model that helps a company be socially
accountable—to itself, its stakeholders, and the public. By practicing corporate social
responsibility, companies can be conscious of the kind of impact they are having on all
aspects of society, including economic, social, and environmental.

Definition: s: The International Organization for Standardization (ISO) defined CSR as:
“The responsibility of an organization for the impacts of its decisions and activities on society
and the environment, resulting in ethical behavior and transparency which contributes to
sustainable development, including the health and well-being of society; takes into account
the expectations of stakeholders; complies with current laws and is consistent with
international standards of behavior; and is integrated throughout the organization and
implemented in its relations.”

The Importance of Corporate Social Responsibility in Banks

CSR enhances eminent business insight. For instance, banks exist in a symbiotic relationship
with their external environments where their exchange with the larger environment
determines to a large extent how well they do in their profit generation. Socially responsible
business practices are indeed in the interest of the firm and disapprove of imposing hidden
social taxes on the firms by undertaking socially responsible business practices which entails
that it is all about how well the firm exists in harmony with its external environment and how
this exchange of inputs and outputs with the environment determines the quality of its
operations. CSR goes a long way in creating a positive image for the organization on the
whole. Doing something for society, stakeholders, customers would not only take your
business to a higher level but also ensure long term growth and success. CSR plays a key role
in making a brand popular among competitors, media, and other organizations and last but
not least direct customers. Brands promoting initiatives of educating poor children, planting
more trees for a greener environment, bringing electricity to a village, providing employment
to people have a positive impact. Corporate social responsibility also gives employees a
feeling of belonging together, employees take pride in educating poor people or children who
cannot afford to go to regular schools and receive formal education. CSR activities magnify
the bond among employees. These employees develop a habit of working together as a real
team and try to help others. Actually they start enjoying working together and also create a
real bond in due course of time and at the same time they also feel this bond in a sense of
loyalty and attachment towards their organization. Corporate social responsibility also goes a
long way in building a positive image of the brand; the brand becomes a “commoner’s

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brand”. People start believing in and trusting the brand, hence positive feedback eventually
helps to generate more revenues for the organization.

Types of Corporate Responsibility Banks In Practice

There are lots of CSR practices that banks can implement, from going paperless and issuing
eco-friendly debit cards, to investing in non-profit organizations that are fighting climate
change and making a difference in local communities. The 4 main types of CSR activities
banks can practice are:

 Environmental

 Ethical

 Philanthropic

 Economic

Environmental CSR practices

Socially responsible banks can demonstrate environmental CSR by being as environmentally
friendly as possible in all aspects of their business. This is one of the biggest ways that non-
traditional banks are implementing CSR practices today. Banks can start being more
environmentally friendly by reducing waste in their everyday operations. This means doing
things like reducing the amount of paper wasted, not using single-use plastic or other
wasteful goods in their offices, and operating energy-efficient facilities. However, operating
in a more resource-efficient manner is just the tip of the iceberg. Truly socially responsible
banks also try to counter the negative impacts on the environment caused by other big
businesses by investing deposited funds in green projects, such as renewable energy,
sustainability research, and reforestation. This also includes not lending to businesses that
engage in business practices that is harmful to the environment.

Ethical CSR Practices

Ethical CSR means the incorporation of ethical labor practices and the equal treatment of all
stakeholders, from leadership and employees, to customers and investors. For example, a
bank practicing this type of CSR might decide to offer wages significantly higher than the
minimum wage to all its employees, especially if it operates in different regions with
different labor and wage laws. By doing this, the financial institution ensures that all of its
employees are making a livable wage, rather than just scraping by with the minimum. Ethical
CSR practices also take into consideration every link in the supply chain to ensure that they
aren’t contributing to unethical practices.

Philanthropic CSR Activities

A financial business can practice philanthropic CSR by donating to charitable causes or
nonprofits and giving back to communities in other meaningful ways that make society better

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for everyone. For example, a bank might practice philanthropy by supporting community
partners working to improve affordable housing. Or, they might offer free financial advice to
educational institutions, individuals or nonprofit companies. Another way a bank can be more
philanthropic is by organizing volunteer activities for its employees. For instance, they might
get together once a month to build houses for low-income families or clean up local parks.

Economic CSR Activities

The final type of corporate social responsibility on this list is economic CSR. This basically
means that all of a bank’s financial decisions must support its commitment to positively
impact society. In other words, rather than making financial decisions to make maximum
profits, the bank must ensure that it is not investing in or lending funds to initiatives that
damage the environment, support unfair business practices, or hurt communities.

CSR contribution of banks in Bangladesh

All commercial and non-commercial banks in Bangladesh undertake the CSR program in
recent time. These activities have a huge impact in the social & economic development of our
country. The contributions of those banks are described as follows:

Janata Bank Ltd. (JBL)

Being one of the major State-Owned commercial banks in Bangladesh, Janata Bank Limited
has also realized its responsibilities to the society and contributed to the amelioration 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.

Rupali Bank Ltd. (RBL)

CSR initiatives of Rupali Bank Limited aim to make business more committed toward social
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.

Agrani Bank Ltd. (ABL)

Agrani Bank Limited is committed to contribute towards social development through its CSR
program. ABL’s ethical standard is not only meant for maximizing profit, rather its vision is
to build up a society where human dignity and rights receive the highest consideration and
evaluation. Bank’s motto is also to improve the society and its culture by means of CSR.
Category-wise CSR activities.

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 Dutch-Bangla Bank Ltd. (DBBL)

DBBL as a responsible corporate body is fully aware of its responsibility about how its
operational activities impact its stakeholders, the economy, the society, its staff and the
environment. Conducting business in an ethical way, creating opportunities for business &
economic growth, empowering people to fulfill their aspirations, ensuring protection of
environment while financing businesses and supporting the distressed people of the society
are at the heart of social cause policy of DBBL. DBBL since its inception in 1996 had
adopted the policy of contributing to the social cause. To that end in view the Bank
established Dutch-Bangla Bank Foundation.

Islami Bank Bangladesh Ltd. (IBBL)

IBBL, the first Shariah based Islami commercial bank in the Southeast Asia, is playing are
makeable role in alleviating poverty across the country through performing enormous
Corporate Social Responsibility (CSR) activities in different vital sectors The CSR program
of IBBL aims at the welfare and well-being of the people of the earth, the planet itself and all
its stakeholders including education, 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).

Mercantile Bank Ltd (MBL)

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: (i)
MBL contribute handsomely in the areas of disaster relief, health, education and social
welfare. (ii) It also provides fund for state-of-art research, as well as for innovative projects in
the area of Bengali Literature & language, social insertion.

Trust Bank Ltd. (TBL)

Corporate Social Responsibility holds the bank accountable for the social, environmental and
economic impact of its operations. Contributing to the society through financial assistance to
the cause of social concern is of prime responsibility of Trust Bank Limited. As part of CSR
through direct participation program, the Bank established a special reserve fund named
‘Trust Bank Limited Special Reserve Fund’ in 2009. An amount of exceeding 5 percent of
Bank’s operating income 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.

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 Bank Asia Ltd. (BAL)

Bank Asia always continues its efforts to look beyond short-term quantitative gains, and to
concentrate on issues that make the institution socially responsible and have given all out
efforts towards sustainable balanced growth. So, it contributes to improve the livelihood
opportunities of the less fortunate, provision of facilities for education and health, protection
of the environment, and encouragement of cultural and social activities in the rural as well as
urban area. During 2018, Bank Asia has spent an amount of Tk.126.91 million for the overall
betterment of the nations.

One Bank Ltd. (OBL)

The benefits of CSR for companies, including increased profits, customer loyalty, trust,
positive brand attitude and combating negative publicity, are well documented. In the light of
these known positive effects, CSR strategies have been embraced by the banking community.
Bangladesh is also gradually becoming proactive on Corporate Social Responsibility. OBL
has been keeping watch on the environmental and social impacts of proposed undertakings
and their implementation of equity of rights irrespective of gender, creed, and color etc.
policies.

Prime Bank Limited

Corporate Social Responsibility (CSR) is a long-term approach to business that addresses the
needs of communities, people and their employers. CSR provides frameworks for successful
enterprises and there are harmonious with their surroundings. Prime Bank Foundation (PBF)
is a staunch believer of empowerment rather than aid. That is why the foundation has
undertaken a variety of projects in education, health and other sectors of the country with the
objective of removing access barriers which the marginalized sectors of the society face.
Some of the contributions of Prime Bank include Education Support Program (ESP), Prime
Bank English Medium School (PBEMS), Prime Bank Nursing Institute (PBNI), Prime Bank
Eye Hospital (PBEH), Prime Bank Cricket Club (PBCC) etc.

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 Conclusion
Corporate Social Responsibility practices by the banks have become an integral part of the
business in recent years. The benefits of CSR include, among others, increased profits,
customer loyalty, and positive brand outlook. As banks ultimately depend on tax payer’s
money during their adversity, it is imperative on the part of the banks to run their business in
a way that will not be detrimental to the long run interest of the society. It has been well
documented by different studies that there exists a positive relationship between the level of
and positive attitude towards CSR and the profitability of the business. Considering the
relevance of CSR in the business, a number of global guidelines/initiatives have been adopted
in recent years. The largest of all of these is the UN Global Compact- a CSR initiative
comprising of 10 voluntary principles on human rights, labor rights, environment and anti-
corruption applicable to all business sectors. In response to these worldwide growing
consciousness regarding CSR activities, banks in Bangladesh have been actively participating
in various social activities. Bangladesh Bank is leading the way as the regulator and released
detailed directives for the banks in 2008 declaring some priority areas such as SME credit,
financing of biomass processing plants, solar panels, waste recycling plants, effluent
treatment plants measures for financial inclusion and mobile phone based services. A number
of reward or incentives have been introduced by the BB for encouraging CSR practices
among banks. Out of forty seven scheduled banks in Bangladesh forty six have more or less
engagement in CSR activities in 2010. However, most of the financial institutions have not
integrated CSR in their daily operations and most of the CSR activities by the banks in
Bangladesh are in the form of philanthropy. The areas of involvement in CSR activities
include community investment, environmental banking, financial inclusion, and CSR
reporting. CSR governance and CSR reporting have also been receiving attention by
Bangladesh Bank. The study also finds that no definite conclusion can be made about the
relationship between CSR expenditure and total revenues, net income, and deposit growth of
banks. In fine, it can be said that growing CSR practices in the banking sector will lead to
sustainable development and establishment of an equitable society in Bangladesh.

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