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Corporate Social Responsibility Practices and Expenditure Disclosure in Nepal;

Trend Analysis of Last Five Fiscal Years Among National Level Development
Bank

Article in SSRN Electronic Journal · January 2023

DOI: 10.2139/ssrn.4623212

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 Corporate Social Responsibility Practices and Expenditure Disclosure in Nepal; Trend
Analysis of Last Five Fiscal Years among National Level Development Bank

Shree Krishna Bhetwal,

MBA Graduates, Boston International College, Bharatpur 10, Chitwan

+977-984-3579182, shree.bhetwal@student.bic.edu.np, shreekrishnabhetwal@gmail.com (P)

Post Raj Pokharel,

Head-Research Unit, Boston International College, Bharatpur 10, Chitwan

+977-980-1564097, +977-984-5331778, postraj@bostoncollege.edu.np

Abstract

This study examines the Corporate Social Responsibility (CSR) disclosure practice among the national level
development banks in Nepal after the compulsory enactment of CSR provision by NRB in 2016/17. This study also
focused on the trend analysis of the CSR expenditure made by the eight national level development banks in Nepal
and their expenses disclosure under the various sectors as mentioned by the NRB over last five years. Secondary data
mainly, annual reports of the bank from FY 2017/18 to Fy 2021/22 were analyzed and found that CSR expenditure
practice is progressive among the BFIs. This study finds that CSR expenditure of the BFIs are above the average of
the total fund allocated in to the CSR fund in each FY. Despite of areas segregation for CSR expenditure by NRB via
its directives, only few banks are disclosing the CSR expenditure as per the areas mentioned by the NRB. Most of the
expenditure are found descriptive without clear sectoral distributions. There is mandatory provision for expenditure
up to 5% of total fund to be spent under the digitalization of banking transactions and 5% for the financial literacy to
the socially backwards groups and women, however, no any such sectoral disclosure was found in the website of
Banks and its annual reports except MNBBL.

Electronic copy available at: https://ssrn.com/abstract=4623212

 I. Introduction
Corporate Social Responsibility (CSR) refers to a business practice that involves a company's commitment to
conducting its operations in an ethical, socially responsible, and sustainable manner. Socio-economic progress of the
society is largely influenced by the exhibited level of CSR (Parajuli 2019). CSR encompasses various initiatives and
activities through which a company voluntarily takes steps to contribute positively to society and the environment,
beyond its primary goal of generating profit. These initiatives are often aimed at addressing social, environmental,
and ethical concerns while balancing the interests of shareholders, employees, customers, communities, and other
stakeholders.

Industrial Enterprises Act, 2020 has made mandatory CSR for industrial enterprises and Nepal Rastra Bank (NRB)
has introduces the CSR provision in the directives for the first time in 2016/17 and has set rules to Banks and Financial
institutions (BFIs) of Nepal for the disclosure of CSR expenditure in the financial reports as well. Shrestha (2021)
studied that BFIs have maintained the CSR fund above the minimum threshold set by the NRB directives, however,
very few BFIs have adhered to the concept of disclosing CSR expenditure in their annual financial statement.

Taneja et al (2022) also studied about the level of CSR reporting and disclosure by the central public sector enterprises
(CPSEs) in India after the issue of mandatory CSR guidelines by the Department of Public Enterprises (DPE) for
CPSEs in March 2020 and found that Human Resources (HR) and community development are the prime focus areas
of CSR disclosures where carbon and greenhouse gas emissions are the least reported activities.

Similarly, Bidari and Djajadikerta (2020) analyzed the CSR in both banking and non-banking firms in Nepal and
found that, CSR practices are above the medium level. As per the study, disclosure of the CSR expenditure is found
mostly descriptive and CSR expenditure has positive relationship between the firm size and profitability of the firm.
The CSR practice of banking sector and non-banking sector has very low difference (Chapagain, 2020).

Though management efficiency and liquidity have positive impact on the bank performance (Sibakoti and Pokharel
2022), CSR also plays significant role for the improvement of bank performance (Pradhan and Chaudhary 2020).
Wagle (2020) explore the relationship between CSR and financial performance of the banking sector in Nepal and has
studied the key dependent variables; Return on Assets (ROA), Return on Equity (ROE) and Net Income (NI) and
found only three commercial banks among 27 extensively disclosing CSR activities. The CSR discussion in the
developing nation like Nepal is still seen as being in its infancy (Adhikari et al., 2016). Later Wagle and Gupta (2021)
highlighted the CSR on financial performance in Nepali Development bank with special reference to Muktinath Bikas
Bank Limited and found practice of CSR in development banks are well and in growth momentum.

Despite of various research on CSR activities and relationship with various financial indicators among the banking
and non-banking sectors, the actual CSR disclosure practices among the development banks are not studied well
previously. There is thus a need for more research to analyze the CSR practices and disclosure of expenditure after
mandatory provision by Nepal Rastra Bank in FY 2016/17 and additionally, to find out the major CSR activities too.
Further, there needs to dig out more regarding CSR expenditure towards the various head like social wellbeing,

Electronic copy available at: https://ssrn.com/abstract=4623212

employee skills development, towards other stakeholder, making it necessary to conduct further studies using updated
data.

Secondary data, annual reports from FY 2017/18 to FY 2021/22 of the following 8 national level development banks
were collected for this study.

Table 1 Name of National Level Development Banks in Nepal.

S. N Name of Banks Short Name in Nepal Stock Exchange

1. Muktinath Bikas Bank Limited MNBBL
2. Garima Bikas Bank Limited GBBL
3. Jyoti Bikas Bank Limited JBBL
4. Kamana Sewa Bikas Bank Limited KSBBL
5. Lumbini Bikas Bank Limited LBBL
6. Mahalaxmi Bikas Bank Limited MBBL
7. Shangrila Development Bank Limited SDBL
8. Shine Resunga Development Bank Limited SRDBL

Rules incorporated in NRB Directives 2023 under Directive no. 6/079, section 16 by Nepal Rastra Bank for
mandatory CSR requirement for Banks and Financial Institutions in Nepal are as below:

BFIs must segregate at least the 1% of net earnings in the FY and put in the separate CSR fund. The allocated fund
should be used in the following fiscal year under the following areas:

S.N Expenses Head Provision

1 Spending on Direct and indirect utilization in programs related to education, health,
Social projects disaster management, environment protection, cultural promotion,
infrastructural development in remote areas, and improved earning
capabilities of socially backward groups, financial literacy, and customer
protection. Projects should be selected through the proposal with public
notice by highly recognized organizations workingin the related field.
2 Financial literacy Expenses on the financial literacy program conducted by the BFIs targeted
for women and socially backward groups to make them financial literate and
make accessible banking for which 5% of CSR fund to be used.
3 Direct Subsidy Donation to National Pride Innovation Center, organization actively
Expenses involved in betterment of Human and specially backward groups for their
education and health. Documentary evidence should be collected and
maintain by the BFIs of these expenses.
4 Sustainable Direct and indirect expenses to attain the goals under 17 areas identified by
Development the Nepal Sustainable Development Goals, 2016-2030.
Goals, 2016-2030
5 Under Covid-19 Direct expenses incurred by BFIs for the prevention of Covid-19 to make
easy import of Medical Oxygen Cylinder, Oxygen Concentrator, Vaccine,
medicine as well as expenses incurred for the prevention from Covid to the
employees working in the BFIs.
6 Child Day Care Expenses incurred for the establishment of Child Day Care Center
Center
7 Donation to orphanage and old age homes (except to the ones established professionally)
8 Open Bank Expenses up to NRs. 100 for every saving account opened as per the initiative
Account Initiative 2076
9 Expenses up to NRs. 100 deposited to the remittance account of Nepali who are going to Abroad
for foreign employment.
10 Digitalization Up to maximum 5% of total CSR fund for promoting the digitization of
banking transaction.

Electronic copy available at: https://ssrn.com/abstract=4623212

Other provisions regarding CSR are as under:

Clause Provision
Kha Expenditure incurred for the promotion of the brand of the organization shall not be borne from
this fund. However, mentioning the name of the organization as a courtesy in the expenditure
incurred on corporate social responsibility will not be considered as an obstacle
Ga When banks and financial institutions spend on corporate social responsibility, they should not
be limited to one geographical area and subject (such as education, health, etc.). However, they
should make arrangements to spend equitably in different geographical areas and subjects within
their jurisdiction.
Gha The members of the board of directors shall not be allowed to spend for personal and political
gain
Nga The board of directors shall formulate and implement separate procedures for corporate social
responsibility, including the areas to be identified under this provision, the process of evaluating
proposals received for expenditure in that sector, operation, and management process of the
fund.
Cha Banks and financial institutions shall disclose the arrangement of such funds and the regional
and provincial details of the expenditure incurred under the comments related to the accounting
of their annual financial statements
Chha Commercial banks and national level financial institutions will have to spend at least 10 percent
of the amount allocated in the institutional social responsibility fund to promote activities,
including promoting financial literacy in each state. Every BFI must disclose the expenses
made under this clause within 1 month end of each fiscal year through its website.
Source: Wagle (2020), NRB (2023)

II. Research Method

This study aimed to explore the CSR practice and expenditure disclosure in national level development bank in Nepal.
For this secondary data of the BFIs, like annual report from last 5 years were analyzed and point out the CSR fund
and its expenditure heading. The annual reports are collected from the online website of the respective BFIs. Trend
analysis of the financial statement of the respective BFIs are studied over the period of 5 years regarding the CSR
expenditure. Further, horizontal analysis of the financial statement is carried out.

Quantitative data collected have been analyzed using SPSS 25.0 in addition to basic measures of central tendency and
frequency distribution done in Excel. Both descriptive and explanatory methods have been used as needed. All the
averages related to CSR fund contribution and size are weighted averages. For the purpose of data presentation, box
plot diagram, trend chart and tree map diagram have been used occasionally in addition to tables.

III. Results

For the study of the CSR expenditure, annual reports from each eight national level development banks are taken from
the FY 2017/18 to FY 2021/22. The report depicts the trend analysis of annual expenditure on CSR by eight banks
with respect to net earnings. Further, this report also highlighted the sectoral disclosure of the CSR expenditure by the
eight national level development banks of Nepal.

1. Muktinath Bikas Bank Limited (MNBBL)

The below table shows the CSR expenditure by MNBBL in last 5 fiscal years with respect to Net Earnings.
Table 1: CSR expenditure and NE of MNBBL

Electronic copy available at: https://ssrn.com/abstract=4623212

 Fiscal Year (Amount in NRs.)
Particulars FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22
Net Earnings
(NE) 575,528,625 856,166,479 707,405,117 1,156,435,048 1,341,805,287

CSR Expenses 2,744,671 7,777,827 7,718,583 8,019,259 11,027,021

% W.R. to NE 0.477% 0.908% 1.091% 0.693% 0.822%
Source: Muktinath Bikas Bank Ltd. Annual Reports (2017 to 2022)

As seen in the table, we can see significant

Figure 1 Net Earnings and CSR Expenses
increment in the CSR expenses by the
1,600,000,000 12,000,000
MNBBL in last five years. The bank is 1,400,000,000 10,000,000

Amount in Rs.
1,200,000,000
significantly utilizing the CSR fund as said 1,000,000,000 8,000,000
800,000,000 6,000,000
by NRB and for the SDG set aside by the 600,000,000 4,000,000
Nepal. As per the information rendered by 400,000,000
200,000,000 2,000,000
the annual report of the bank, it has been - -

focusing on ten areas such as; clean water

and sanitation, climate action, decent work
and economic growth, good health and Net Earning (NE) Expenses Linear (Expenses)
wellbeing, Industry, infrastructure, and
innovation, zero hunger, peace, justice and strong institution, quality education, reduce inequalities, sustainable cities,
and communities.

Figure 2: CSR contribution made by Bank in line with the SDG’s for FY 2021/22

CSR contribution on SDG by MNBBL FY 2021/22 Clean Water & Sanitation

98,286, 1% 445,256, 4% Climate Action

55,000, 1%
Decent Work and Economic Growth

GoodHealth & Well Being

Industry, Infrastructure and Innovation

3,734,688, 34% 3,433,253,

Zero Hunger
31%
Peace Justice and Strong Institutions

1,726,221, Quality Education

115,000, 1%
16%
Reduce Inequalities
927,562, 8%
373,069, 3% Sustainable Cities and Communities
118,686, 1%

2. Garima Bikas Bank Limited (GBBL)

The below table shows the CSR expenditure by GBBL in last 5 fiscal years with respect to Net Earnings.

Table 2: CSR expenditure and NE of GBBL

Electronic copy available at: https://ssrn.com/abstract=4623212

 GBBL FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22
Net Earnings
(NE) 441,859,945 594,423,927 577,255,769 836,317,904 1,030,013,992
Provision 1% of
NE 4,418,599 5,944,239 5,772,558 8,363,179 10,300,140

CSR Expenses 2,056,548 2,944,796 9,602,455 3,766,510 6,927,168

% W.R. to NE 0.465% 0.495% 1.663% 0.450% 0.673%
Source: Garima Bikas Bank Ltd. Annual Reports (2017 to 2022)

As seen in the table, we can

Figure 3: Net Earnings and CSR Expenses
see the significant
1,200,000,000 12,000,000
expenditure done by the
1,000,000,000 10,000,000

CSR Expenses in Rs.

Garima Bikas Bank in CSR
NE Amount Rs.

activities. During analysis of 800,000,000 8,000,000

last 5 years, expenditure on 600,000,000 6,000,000

CSR was heavily made on Fy 400,000,000 4,000,000

2019/20 at the time of Covid 200,000,000 2,000,000
19 and during FY 2021/22. - -
GBBL is found to be average FY FY FY FY FY
2017/18 2018/19 2019/20 2020/21 2021/22
utilization of the CSR fund as
Fiscal Year
per the last 5 fiscal years.
Further, Expenses head wise Net Earning (NE) CSR Expenses Linear (CSR Expenses)

amount were not disclosed by

the GBBL and only descriptive disclosure of the expenses were reported. As per the bank’s annual report, GBBL
made CSR expenses on work like cleaning and sanitations, education and financial literacy, donation to the temples
and heritage, etc.

3. Jyoti Bikas Bank Limited (JBBL)

The below table shows the CSR expenditure by JBBL in last 5 fiscal years with respect to Net Earnings.

Table 3: CSR expenditure and NE of JBBL

JBBL FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22

Net Earnings
(NE) 296,294,656 531,341,553 488,456,209 663,869,529 670,001,152

CSR Expenses 437,889 449,900 10,943,020 2,649,079 2,552,552

% W.R. to NE 0.148% 0.085% 2.240% 0.399% 0.381%
Source: Jyoti Bikas Bank Ltd, Annual Reports (2017 to 2022)

Electronic copy available at: https://ssrn.com/abstract=4623212

As seen in the reports of JBBL, CSR
Figure 4: Net Earnings and CSR Expenses
expenditure is lower than average of
800,000,000 12,000,000

NE Amount in Rs.

CSR Expenes in Rs.

CSR fund. Though bank has spent 10,000,000
600,000,000
good amount in FY 2019/20 during 8,000,000
400,000,000 6,000,000
Covid 19 time, it was making lower 4,000,000
200,000,000
2,000,000
expenses in CSR in comparison to - -
CSR available fund. The noticeable
CSR activities of the bank includes
funding NRs. 1.82 million to Nyano Fiscal Year
Nani project I and II by National
Innovation Center in FY 2020/21 and Net Earning (NE)
CSR Expenses
NRs. 0.2 million to the students of Linear (CSR Expenses)
Dolpa Nepal for the solar electricity, and for other Covid prevention and safety. Further it has supported to the Youth
Leadership Program with NRs. 0.1 million. The trend of CSR expenses with respect to profit is illustrated with above
figure 4.

4. Kamana Sewa Bikas Bank Limited (KSBBL)

The below table shows the CSR expenditure by KSBBL in last 5 fiscal years with respect to Net Earnings.

Table 4: CSR expenditure and NE of KSBBL

KSBBL FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22

Net Earning
(NE) (22,225,319) 284,582,021 119,719,328 598,175,740 590,085,285

CSR Expenses 990,500 2,118,387 5,217,578 1,971,643 5,784,956

% W.R. to NE -4.457% 0.744% 4.358% 0.330% 0.980%
Source: Kamna Sewa Bikas Bank limited, Annual Reports (2017 to 2022)

The annual reports of last 5 years of

Figure 5: Net Earnings and CSR Expenses
KSBBL depicts the CSR expenditure
800,000,000 8,000,000
of the bank which is increasing and
CSR Ex. in Rs.

600,000,000 6,000,000
NE in Rs.

consistent growth with the net profit 400,000,000

4,000,000
of the bank except for FY 2020/21. 200,000,000
- 2,000,000
During the covid 19 bank uses highest
(200,000,000) -
fund of CSR for prevention of covid
and donated to the fund established by
Fiscal Year
the Government of Nepal for the
Prevention of Covid 19 too. KSBBL Net Earning (NE) CSR Expenses
has clearly disclose the CSR activities Linear (CSR Expenses)

Electronic copy available at: https://ssrn.com/abstract=4623212

and fund spent as per the heading of NRB as well. Further, KSBBL disclose the province wise CSR expenditure in
the annual reports.

Figure 6: Pie Chart and Graphs showing CSR expenditure for FY 2021/22 and Province wise expenses on CSR.

CSR Expenses province wise FY

CSR contribution sectorwise
2021/22
by KSBBL FY 2021/22 28.15%
1,800,000
632,802, 122,113, 1,600,000 23.70%24%

Amount in Rs.
2% 1,400,000
89,986, 11% 1,200,000
2% 1,000,000
800,000 11.11%
600,000 8.15%
4,940,055, 400,000 4.44%
200,000 0.74%
85%
0

Social Project
Direct Donation
Name of Provice
SDG
Donation to Orphanage & Old age home Amount

Source: Kamna Sewa Bikas Bank limited, Annual Reports (2017 to 2022)

As per the information from the annual reports, KSBBL has spent 85% of its total CSR expenses for FY 2021/22 in
social project followed by SDGs goals area. It has been making lower contributions towards orphanage and old age
home. Also, lower direct donation was seen having 2% of CSR expenses only. Further, looking into the province wise
expenses, CSR expenditure were massively carried out in Bagmati province followed by Lumbini and Gandaki
province. The lowest contribution was made in the Karnali Province.

5. Lumbini Bikas Bank Limited (LBBL)

The below table shows the CSR expenditure by LBBL in last 5 fiscal years with respect to Net Earnings.

Table 5: CSR expenditure and NE of LBBL

LBBL FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22

Net Earnings
(NE) 299,678,800 620,681,564 378,560,824 433,967,179 637,193,265

CSR Expenses 1,665,400 2,734,921 7,028,036 3,219,736 3,232,799

% W.R to NE 0.556% 0.441% 1.857% 0.742% 0.507%
Source: Lumbini Bikas Bank Limited, Annual Reports (2017 to 2022)

Electronic copy available at: https://ssrn.com/abstract=4623212

Figure 7: Net Earnings and CSR
Net Earnings and CSR Expenses
expenses of LBBL
700,000,000 8,000,000

CSR Expenses in Rs.

600,000,000 7,000,000
The five years data of CSR
500,000,000 6,000,000

NE in Rs.
expenditure shows that, the CSR 5,000,000
400,000,000
expenditure was more than average of 4,000,000
300,000,000
3,000,000
the CSR fund allocated for the year. 200,000,000 2,000,000
There seems significant growth in the 100,000,000 1,000,000
- -
CSR expenditure of the bank with
respect to Net earnings. CSR
expenditure for the FY 2019/20 is
highest among the years as bank Fiscal Year

invested for the Covid preventions Net Earning (NE) CSR Expenses
relief fund established by the Linear (CSR Expenses)
Government of Nepal. Overall CSR
expenditure of the bank seems progressive and satisfactory. Same has been observed by linear graphs too. The sector
wise disclosure of the CSR expenditure was not found and descriptive figure was mentioned in bank’s annual report.

6. Mahalaxmi Bikas Bank Limited (MBBL)

The below table shows the CSR expenditure by MBBL in last 5 fiscal years with respect to Net Earnings.

Table 6: CSR expenditure and NE of MBBL

MBBL FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22

Net Earnings
(NE) 507,097,176 657,772,554 403,568,548 660,099,696 904,796,451

CSR Expenses 1,905,259 3,856,839 13,217,874 4,035,685 4,836,382

% W.R. to NE 0.376% 0.586% 3.275% 0.611% 0.535%
Source: Mahalaxmi Bikas Bank Limited, Annual Reports (2017 to 2022)

Figure 8: Net Earnings and CSR Net Earnings and CSR Expenses
Expenses of MBBL 1,000,000,000 14,000,000
CSR Ex. in Rs.

800,000,000 12,000,000
NE in Rs.

10,000,000
The five years data of CSR 600,000,000 8,000,000
400,000,000 6,000,000
expenditure shows the above 4,000,000
200,000,000 2,000,000
average CSR expenditure to the - -
CSR fund allocated for the year.
There seems significant growth in
the CSR expenditure of the bank Fiscal Year
with respect to Net earnings. CSR
Net Earning (NE) CSR Expenses Linear (CSR Expenses)
expenditure for the FY 2019/20 is

Electronic copy available at: https://ssrn.com/abstract=4623212

highest among the years as bank invested for the Covid preventions relief fund established by the Government of
Nepal. Overall CSR expenditure of the bank seems progressive and satisfactory. Same has been observed by linear
graphs too. The sector wise disclosure of the CSR expenditure was not found and descriptive figure was mentioned in
bank’s annual report.

7. Shangrila Development Bank limited (SDBL)

The below table shows the CSR expenditure by SDBL in last 5 fiscal years with respect to Net Earnings.

Table 7: CSR expenditure and NE of SDBL

SDBL FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22

Net Earnings
(NE) 275,650,388 341,819,351 191,097,814 410,080,457 527,173,663

CSR Expenses 3,239,585 1,348,312 1,484,264 5,600,241 4,249,365

% W.R. to NE 1.175% 0.394% 0.777% 1.366% 0.806%
Source: Shangrila Development Bank Limited, Annual Reports (2017 to 2022)

Figure 9: Net Earnings and CSR

Net Earnings and CSR Expenses
Expenses of SDBL.
600,000,000 6,000,000

CSR Exp. in Rs.

The five years data of CSR 500,000,000 5,000,000
NE in Rs.

400,000,000 4,000,000
expenditure shows the above average
300,000,000 3,000,000
CSR expenditure to the CSR fund 200,000,000 2,000,000
allocated for the year. There seems 100,000,000 1,000,000
- -
significant growth in the CSR
expenditure of the bank with respect
to Net earnings. CSR expenditure for
the FY 2020/21 is highest among the Fiscal Year

years as bank invested for the Covid

Net Earning (NE) CSR Expenses
preventions relief fund established by
Linear (CSR Expenses)
the Government of Nepal. Overall
CSR expenditure of the bank seems progressive and satisfactory. Same has been observed by linear graphs too. The
sector wise disclosure of the CSR expenditure was not found and descriptive figure was mentioned in bank’s annual
report.

8. Shine Resunga Development Bank Limited (SRDBL)

The below table shows the CSR expenditure by SDBL in last 5 fiscal years with respect to Net Earnings.

Table 8: CSR expenditure and NE of SDBL

SRDBL FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22

Electronic copy available at: https://ssrn.com/abstract=4623212

 Net Earnings
(NE) 322,978,183 418,460,271 426,747,044 648,707,271 527,173,663

CSR Expenses 2,211,526 3,632,468 5,061,884 5,730,543 3,821,881

% wr to NE 0.685% 0.868% 1.186% 0.883% 0.725%
Source: Shine Resunga Development Bank Limited, Annual Reports (2017 to 2022)

Figure 10: Net earnings and CSR

Net Earnings and CSR Expenses
expenses in SRDBL.
700,000,000 7,000,000
The five years data of CSR 600,000,000 6,000,000
expenditure shows the above average 500,000,000 5,000,000

Amount

Amount
CSR expenditure to the CSR fund 400,000,000 4,000,000

allocated for the year. There seems 300,000,000 3,000,000

200,000,000 2,000,000
significant growth in the CSR
100,000,000 1,000,000
expenditure of the bank with respect
- -
to Net earnings. CSR expenditure for FY FY FY FY FY
the FY 2019/20 is highest among the 2017/182018/192019/202020/212021/22
Fiscal Year
years as bank invested for the Covid
preventions relief fund established by Net Earning (NE) CSR Expenses
the Government of Nepal. Overall Linear (CSR Expenses)
CSR expenditure of the bank seems
progressive and satisfactory. Same has been observed by linear graphs too. The sector wise disclosure of the CSR
expenditure was not found and descriptive figure was mentioned in bank’s annual report.

IV. Conclusion

Corporate social responsibility plays the significant role for the well-being society, employee, stakeholders, customers,
and communities. As per the analysis of five years of CSR expenditure data, it comes to known that, CSR initiatives
by the national level development banks of Nepal is progressive over the year. The study reveals that, CSR for FY
2019/20 was highest with higher contribution towards COVID-19 preventions and relief. All the national level
development banks made significant level of contributions to Covid -19 preventions in FY 2019/20 except SDBL.
Despite of areas segregation for CSR expenditure by NRB via its directives, only few banks are disclosing the CSR
expenditure as per the areas mentioned by the NRB. Most of the expenditure are found descriptive without clear
sectoral distributions. There is mandatory provision for expenditure up to 5% of total fund to be spent under the
digitalization of banking transactions and 5% for the financial literacy to the socially backwards groups and women,
however, no any such sectoral disclosure was found in the website of Banks and its annual reports except MNBBL.
The BFIs should disclose the CSR expenses properly in the website or in its annual reports as it also supports for the
Global Sustainable Reporting in financial sector.

Electronic copy available at: https://ssrn.com/abstract=4623212

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Adhikari, D. R., Gautam, D. K., & Chaudhari, M. K. (2016). Corporate social responsibility domains and related
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https://www.garimabank.com.np/disclosure/annual-reports

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Annual Reports (n.d.). Kamana Sewa Bikas Bank Limited. Retrieved September 10, 2023 from

https://www.kamanasewabank.com/report/annual-report

Annual Reports (n.d.). Mahalaxmi Bikas Bank Limited. Retrieved September 10, 2023, from

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