Corporate Social Responsibility Practices of Private Commercial Banks in Bangladesh: A Comparative Study

A DISSERTATION
ON
CORPORATE SOCIAL RESPONSIBILITY PRACTICES OF
PRIVATE COMMERCIAL BANKS IN BANGLADESH: A
COMPARATIVE STUDY
(A Study Conducted for the Fulfillment of the Degree of Masters in Bank Management)
SUBMITTED TO
CENTER FOR POST GRADUATE STUDIES (CPGS)

BANGLADESH INSTITUTE OF BANK MANAGEMENT
SUBMITTED BY
MD. MAMUNUR RASID

ROLL: 151115
15TH BATCH
MASTERS IN BANK MANAGEMENT
BANGLADESH INSTITUTE OF BANK MANAGEMENT

SECTION– 2, MIRPUR, DHAKA– 1216
DATE OF SUBMISSION: DECEMBER 31, 2012
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December 31, 2012
The Director
Center for Post Graduate Studies
Bangladesh Institute of Bank Management
Mirpur – 2, Dhaka – 1216
Subject: Submission of Dissertation on “Corporate Social Responsibility practices of

private commercial banks in Bangladesh: A comparative study”
Dear Sir,
This is my pleasure to submit my dissertation on “CSR practices of private commercial banks in

Bangladesh: A comparative study”, which I was assigned.
It was a great opportunity for me to acquire knowledge and experience in respect of the CSR
practices of private commercial banks in Bangladesh.
I have conducted a very interesting study in the arena of CSR practices of private commercial
banks in Bangladesh. I have analyzed the legal and regulatory aspects of CSR practices of
banks; I have gathered a lot of experience about the CSR activities during this period
I hope that despite all the limitations, this report will give a fair idea about the CSR practices of
private commercial banks in Bangladesh. I will be glad to clarify quarries if you have any.
Finally, I sincerely thank you for providing me the opportunity to carry out such an interesting
study.
Sincerely yours,
_________________
Md. Mamunur Rasid

Roll: 151115
15th Batch(MBM Program)
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Executive Summary
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. The purpose of the study is to provide
deep understanding of the practices of CSR of PCBs in Bangladesh. The study has been taken to
observe different regulatory framework (CSR areas) of CSR of PCBs and its contribution. This
study found CSR practices of PCBs are quite scant rather than profit. The study reveals that
PCBs are trying to swell their contribution in accordance with Bangladesh Bank proper
guidelines. The role of business worldwide and specifically in the developed economies has
evolved over the last few decades 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. One can identify so many reasons for shifting the
role of business from classical concept to a responsible business concept, but negative
impression of stakeholders on the enterprise would get a higher priority among others. In one
hand, enterprises create wealth and job opportunities for the society and on the other; they are
pollute and destroy environment and ecology with devastating impact on human health and
biodiversity worldwide. To address the social problems or the problems of the stakeholders, the
business community evolved a new approach in their business strategies named CSR and
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. 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.
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Acknowledgement
At First I would like to express my deepest sense of gratitude; all sorts of praises to “Almighty
Allah”, whose blessings have enabled me to complete this dissertation paper.
Then, I would like to express my gratitude to the honorable Director, Center for Post Graduate
Studies, Mr. Mohammad Mohiuddin Siddique, for his kind approval to work on an important
topic related to Corporate Social Responsibility activities of banks.
I would like to thank my respected Supervisor, Mr. Abdul Jalil Choudhury, Associate Professor,
(BIBM), for providing his expert guidance throughout the process of writing my dissertation. His
suggestions and comments were really a great source of spirit to make the report a good one. I
would also like to thank my honorable teacher, Prof. Dr. Toufic Ahmad Choudhury director
general BIBM for his kind suggestion and guideline which will help me in my future
professional life.
It is my pleasure to acknowledge the valuable knowledge and information; I have received from
all the faculties of Bangladesh Institute of Bank Management. This report might never have been
completed without the necessary policies, guidelines, academic knowledge, assistance of
reference books, articles, web pages and some practical knowledge.
Finally, I would like to extend my heart-felt thanks to all those who have assisted me in
preparing the report, both senior and fellow MBM students and staffs of the MBM Program
Office and Library, by giving me good advices, suggestions, inspiration and support.
Md. Mamumnur Rasid
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TABLE OF CONTENTS
Chapter Content Page

No.
CHAPTER 1: INTRODUCTION 01-03
1.1 Background 01
1.2 Objectives 03
1.3 Methodology 03
1.4 Limitation of the Report 03
CHAPTER 2 : Literatures Review 04-13
2.1 Historical definitions of CSR 05

st
2.2 Corporate Social Responsibility in the 21 Century 09
CHAPTER 3: Regulatory Framework for Corporate Social Responsibility 14-16

in Bangladesh
3.1 Regulatory Framework for CSR areas in Bangladesh 14
3.2 CSR and Constituents 15
3.3 Corporate Social responsibility and stakeholders‟ concern within 16

banking sector
CHAPTER 4: Corporate Governance and Corporate Social Responsibility 17-19
CHAPTER 5: Trend analysis of CSR of commercial banks in Bangladesh 20-37
5.1 Comparative Analysis 20
5.2 CSR practices in banks: an analytical review 25
5.3 Trends of sectoral pattern of direct CSR expenditure 27

reported by banks
5.4 Trends of CSR initiatives not involving direct expenditure: 29
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promotion of financial inclusion
5.5 Progress in deepening of CSR practices in banks 33
5.6 CSR engagement through donations to CSOs, NGOs 34
5.7 Direct CSR expenditures reported by banks 35
5.8 CSR expenditures as % of after tax profit & CSR expenditures in 36

Education Sector reported by banks in 2011
CHAPTER 6: Conclusion and Recommendations 38-40
6.1 Conclusion 38
6.2 Recommendations 39
CHAPTER 7: References 41-42
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List of Tables
Table No. Name of the Table Page No.
01. Major CSR activities of Sample banks at a glance 20
02. Compliance with regulatory framework of five banks 20
03. Trends of Sectoral pattern of CSR expenditure reported by 27

banks
04 Number of banks ingraining CSR practices within own 33
establishment and in their client businesses
05 Community investment for social & environmental 34
improvement
06 Direct social & environmental interventions 35
07 Direct CSR expenditures reported by banks 35
08 CSR expenditures as % of after tax profit & CSR expenditures 36

in Education Sector reported by banks in 2011
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List of Figures and Graphs
Figure No. Name of the Figure Page No.
01 Total Contribution of CSR of five banks 21
02 Contribution to Education 22
03 Contribution to Health 22
04 Contribution to Art and Culture 23
05 Contribution to Sports 23
06 Contribution to Natural Disaster 24
07 Profit and CSR expense relationship of five banks 24
08 Total CSR Expenditure (2008-2011) 27
09 Sectoral shares of CSR Expenditure 28
10 Major Financial inclusion programs Undertaken by Banks 30
11 Outstanding SME Credit 31
12 Outstanding Agricultural Credit 32
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Abbreviations and Acronyms
BB= Bangladesh bank

BKB= Bangladesh Krishi bank
CAMELS = Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, Sensitivity to
Market Risk
CDM = Clean Development Mechanism
CIB = Credit Information Bureau
CKD = Chronic Kidney Disease
CSOs = Civil Sociaty Organizations
CSR = Corporate Social Responsibility
ERM = Environmental Risk Management
ERP = Enterprise Resource Planning
ETPs = Effluent Treatment Plants
FCBs = Foreign Commercial Banks
GoB = Goverment of Bangladesh
MDGs = Millennium Development Goals
MFls = Micro Finance Institurions
MRDI = Management & Resources Development Initiative
MOU = Memorandum of Understanding
NBR = National Board of Revenue
NGOs = Non Goverment Organizations
PCBs = Private Commercial Banks
RAKUB = Rajshahi Krishi Unnayan Bank
RBCA = Risk Based Capital Adequacy
SCBs = State owned Commercial Banks
SDBs = Specialized Development Banks
SEDF = South Asia Enterprise Development Facility
SFD = Salvation for the Deserving
SME = Small & Medium Enterprise
SSFP = Smiling Sun Franchise Program
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1. Introduction
In current business environment, corporations try to find the ways of optimization to triple
bottom line concept of sustainability management. Triple bottom line (TBL) is an important
concept to create a positive impact of business organization in the society, environment, and the
business community. The objective is to achieve sustainability by equally balancing economic,
environmental and social criteria. Corporations bridge interrelationship between economic,
social and environmental aspects through their business. This concept is famously known as
corporate social responsibility (CSR), and is focus of business literature since recent decades.
Corporate social responsibility (CSR) often referred as corporate citizenship, corporate social
performance and sustainable responsible business, is focus of management researchers and
business practitioners. Corporate social responsibility is defined (Wood, 1991), as “a business
organization‟s configuration of principles of social responsibility, processes of social
responsiveness, and policies, programs, and observable outcomes as they relate to the firm‟s
societal relationships.” Current corporate performance measures involve the corporate social
performance. This measure has critical importance to corporate sustainability and reputation
management. CSR is being used today to establish good rapport with the public. It is used as pre-
emption strategy by the corporations to save their skin from unforeseen risks and corporate
scandals, possible environmental accidents, governmental rules and regulations, protect eye-
catching profits, brand differentiation, and better relationship with employees based on
volunteerism terms. Corporations today are much conscious to publish their CSR activities on
their websites, sustainability reports and their advertising campaigns in order to get the sympathy
of the customer. CSR is also practiced because customers as well as governments today are
demanding more ethical behaviors from organizations. In response corporations are volunteering
themselves to incorporate CSR as part of their business strategies, mission statement and values
in multiple domains, respecting labor and environmental laws, while taking care of the
contradictory interest of various stake holders (Kashyap et al., 2006). Another justification in
favor CSR actions by the leading corporations today is to gain competitive advantage which may
not be enjoyed by the peer corporations. CSR actions in this respect also help corporations to
attract, retain not only customers but motivated employees as well which in turn ensure long-
term survival of the corporation. Berger and Drumwright (1996) supported that companies with
sound CSR actions develop positive social identity and enjoy increased loyalty from both
customers and employees. CSR actions are also often associated with better financial
performance of the organizations. However this required long-term perspective as in short-run
CSR actions may be view as expense but in fact it is an investment which will yield additional
cash flows for the corporations. Margolis et al. (2001) has found significant positive relationship
between CSR and corporate financial performance. CSR actions have potential to create
additional value for corporate. CSR combines the social and environmental aspects in doing
business. CSR is an approach whereby a company considers the interests of all stakeholders both
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within the organization and in society and applies those interests while developing its strategy
and during execution. CSR offers organizations various opportunities not only to differentiate
themselves from competitors but also for reducing costs. If managed adequately, a CSR
approach creates value for both business and society simultaneously (Figure 1) (Nolan, Norton
and Co., 2009).
1.2 Objectives of the study
 To gather the knowledge about CSR activities of private CBs of Bangladesh.

 To identify the major areas where CSR activities are performing by private CBs.
 To compare and analyze the contribution of CSR activities of private CBs in different
areas.
1.3 Methodology & Sampling
The study is exclusively a descriptive research and thus it is purely based on the information
from secondary data sources. The data collected for the purpose of the study involves the
examination of annual reports for the year 2010-2011 of private commercial banks listed on the
Dhaka Stock Exchange (DSE). The linkage between the firm‟s size and the amount of CSR
information is evidenced in earlier CSR literature (Khan Ahmed et al. 2010, Zeghal and Ahmed:
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1990). The banking companies considered in the study include top five private commercial
banks. The samples of top five commercial banks are Dutch Bangla Bank Ltd, Mercantile Bank
Ltd, Prime Bank Ltd, Southeast bank Ltd and Bank Asia Ltd. The sample population considered
for the study has a noteworthy illustration of firms representing the banking sectors listed on the
DSE. Additionally, it is documented that annual report is the most widespread and accepted
document (Belal, 2000, Khan et al., 2009; Khan, 2010) for corporate communication in
Bangladesh.
1.4 Limitations
There are some limitations that I have faced in preparing this report. Basically I faced
difficulties in collecting data from the different sources. To collect primary data some individual
showed no interest in interviewing them. 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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Literatures Review and Conceptual Discussions
Corporate social responsibility (CSR) has variously been described as a „motherhood issue‟
(Ryan 2002, p. 302) „the hot business issue of the noughties‟ (Blyth 2005, p. 30) and „the talk of
the town in corporate circles these days‟ (Mees & Bonham 2004). There seems to be an infinite
number of definitions of CSR, ranging from the simplistic to the complex, and a range of
associated terms and ideas (some used interchangeably), including „corporate sustainability,
corporate citizenship, corporate social investment, the triple bottom line, socially responsible
investment, business sustainability and corporate governance‟ (Prime Minister's Community
Business Partnership). It has been suggested that „some…researchers…distort the definition of
corporate social responsibility or performance so much that the concept becomes morally
vacuous, conceptually meaningless, and utterly unrecognizable‟(Orlitzky 2005); or CSR may be
regarded as „the panacea which will solve the global poverty gap, social exclusion and
environmental degradation‟ (Van Marrewijk 2003).
Alam S.M.S, et. al (2010) in a paper entitled “Corporate Social Responsibility of Multi National
Corporations in Bangladesh: A Case study on Grameenphone” pointed out that CSR is still an
evolving concept that enables corporate executives to create and apply self determined policies
to best meet the needs and demands of its stakeholders. The peculiar nature of CSR practices
makes their cross-border management difficult. Achieving consistent CSR practices across
global operations involves not only the transfer of the CSR practice, but also the transfer of its
underlying value and meaning.
Azim et al. (2011) in a study named “Corporate Social Disclosure in Bangladesh: A Study of the
Financial Sector”, corporate social responsibility is not the only ethical dilemma that financial
institutions face in an atmosphere of corrupt corporate practice. These institutions are also
concerned with commitment for sustainable development. A well-functioning finance sector in
any country can contribute directly to a healthy economy. This sector plays an important role in a
country‟s economic development.
The literature recognizes that CSR practices differ from country to country (Adams, Hill &
Roberts, 1998b) and between developed and developing countries (Imam, 2000). Furthermore
the nature and patterns of CSR vary between types of industry (Gray, Javad, Power & Sinclair, 5
2001). Surveys of CSR practices in western countries reveal that companies place the greatest
emphasis on disclosing human resource information such as employee numbers and
remuneration, equal opportunities, employee share ownership, disability policies, and employee
training (Gray et al., 2001). Due to geographical, economic, environmental, political, regulatory,
social and cultural differences it would not be appropriate to generalize the results of studies of
developed nations to developing countries. This is because the stage of economic development is
likely to be an important factor affecting CSR practices. In the context of emerging economies, a
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few studies have focused on companies in countries such as Malaysia, Thailand and China
(specifically, Hong Kong). A study of 100 public companies in Malaysia showed that 66% of
companies performed some kind of social reporting (Kin, 1990). Of these, 64 companies
reported human resource issues and 22 companies disclosed community involvement issues.
Hopkins has commented that „without a common language we don‟t really know that our
dialogue with companies is being heard and interpreted in a consistent way‟ (Hopkins 2003, p.
125). It is therefore important to explore the language of CSR if we are to understand and debate
the concepts involved. This literature review examines the evolution of CSR and seeks to
identify some of the more common or prominent definitions that have evolved and the context
within which they have been used. The review is not an exhaustive list of definitions but aims to
synthesize the main points in a way that may be useful to the broader discussion of CSR. While
the review focuses on the literature of academe, it also explores the views of industry espoused
in less formal means of communication.
2.1 Historical definitions of CSR
While the term CSR may appear to be relatively new to the corporate world, the literature reveals
that the evolution of the concept itself has taken place over several decades. The fact that the
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terminology itself has changed over this time also suggests that the meaning ascribed to concepts
such as CSR will continue to evolve in tune with business, political and social developments.
The impact of globalization and mass communication also means that while definitions will
reflect local situations, they will also be strongly influenced by global trends and changes in
international law.
1920s – 1950s
It has been suggested by Windsor that „business leaders have since the 1920s widely adhered to
some conception of responsibility and responsiveness practices‟ (Windsor 2001, p. 229). Others
have argued that the genesis of CSR was in the 1930s with the debate between AA Berle and E
Merrick Dodd over the role of managers (Post 2003 ; Turner 2006). Merrick Dodd contended
„that the powers of corporate management are held in trust for the entire community‟ (Boatright
in Post 2003, p. 31). In 1953, Bowen conceptualized CSR as social obligation – the obligation „to
pursue those policies, to make those decisions, or to follow those lines of action which are
desirable in terms of the objectives and values of our society‟ (Bowen in Maignan & Ferrell
2004, p. 4). Carroll has described Bowen as the modern „Father of Corporate Social
Responsibility‟ and believes that his work marks the beginning of the modern period of literature
on CSR. (Carroll 1999, p. 270) Bowen took a broad approach to business responsibilities,
including responsiveness, stewardship, social audit, corporate citizenship and rudimentary
stakeholder theory. (Windsor 2001, p. 230)
1960s
In 1960, Frederick wrote that „Social responsibility in the final analysis implies a public posture
toward society‟s economic and human resources and a willingness to see that those resources are
used for broad social ends and not simply for the narrowly circumscribed interests of private
persons and firms‟. (Frederick in Carroll 1999, p. 271) Clarence C Walton emphasized that „the
essential ingredient of the corporation‟s social responsibilities include a degree of voluntarism,
as opposed to coercion‟ (Walton in Carroll 1999, p. 271), an argument that business continues to
put forth today. Walton also counseled „the acceptance that costs are involved for which it may
not be possible to gauge any direct measurable economic returns‟. (Walton in Carroll 1999, p.
273)
1970s
The literature on CSR includes many references to Milton Friedman‟s „minimalist‟ view of
corporate responsibility (Lucas, Wollin & Lafferty 2001, p. 150) and his famous comment in
1970 (Hopkins 2003 ; Turner 2006). It is useful to include the quotation here because it is such a
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business-centric view and is one end of a continuum that is still being debated today in terms of
CSR:
There is one and only one social responsibility of business – to use its resources and engage in
activities designed to increase its profits so long as it stays within the rules of the game, which is
to say, engage in open and free competition, without deception or fraud. (Friedman in Turner
2006, p. 7)
The US Committee for Economic Development‟s (CED) 1971 model of CSR reveals that despite
Friedman‟s pronouncement, there were other evolving views about the role of business in CSR.
The Committee described CSR as being „related to products, jobs and economic growth; related
to societal expectations; and related to activities aimed at improving the social environment of
the firm‟ (US Committee for Economic Development in Wheeler et al, 2003). Carroll describes
the CED‟s model as „a landmark contribution to the concept of CSR‟ which illustrated the
changing relationship between business and society. (Carroll 1999, p. 274)
Business is being asked to assume broader responsibilities to society than ever before and to
serve a wider range of human values. Business enterprises, in effect, are being asked to
contribute more to the quality of American life than just supplying quantities of goods and
services. Inasmuch as business exists to serve society, its future will depend on the quality of
management‟s response to the changing expectations of the public‟. (CED in Carroll 1999, p.
274)
The relationship between business and society was being questioned at a time when the United
States was embroiled in the social and political protests of the civil rights and peace movements,
when issues such as „human values‟ and morality were being publicly debated. This would also
have impacted on corporate America. Wallich expanded the debate about voluntarism versus
coercion by equating CSR with the freedom to be a free agent:
I take responsibility to mean a condition in which the corporation is at least in some measure a
free agent. To the extent that any of the foregoing social objectives are imposed on the
corporation by law, the corporation exercises no responsibility when it implements them.
(Wallich in Carroll 1999, p. 276)
Business therefore abrogates its responsibility to government and the wider society.
In 1974, Eells and Walton‟s discussion of CSR could perhaps be seen as moving toward the
issue of social licence that was to emerge more fully nearly thirty years later.
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In its broadest sense, corporate social responsibility represents a concern with the needs and
goals of society which goes beyond the merely economic. Insofar as the business system as it
exists today can only survive in an effectively functioning free society, the corporate social
responsibility movement represents a broad concern with business‟s role in supporting and
improving the social order. (Eells and Walton in Carroll 1999, p. 278)
1980s
The 1980s have been described as having „a more responsible approach to corporate strategy‟
(Freeman in Lucas, Wollin & Lafferty 2001, p. 150). Freeman‟s 1984 paper continues to be
identified as a „seminal paper on stakeholder theory‟, and stakeholder theory as the „dominant
paradigm‟ in CSR. (McWilliams & Siegel 2001, p. 118)
Carroll believes that in the 1980s, „the focus on developing new or refined definitions of CSR
gave way to research on CSR and a splintering of writings into alternative concepts and themes
such as corporate social responsiveness, CSP, public policy, business ethics, and stakeholder
theory/management‟. (Carroll 1999, p. 284) This early definition of sustainable development is
often quoted, but it is interesting from the viewpoint of the CSR debate that most authors to not
seem to quote the next sentence from the report:
Far from requiring the cessation of economic growth, it recognizes that the problems of poverty
and underdevelopment cannot be solved unless we have a new era of growth in which
developing countries play a large role and reap large benefits. (World Commission on
Environment and Development 1987)
The report clearly links sustainable development with economic growth and sets the direction for
future debate on this issue. Although we have seen examples of earlier work that touched on the
issue of CSR and financial profit, Carroll identified the 1980s as the period when „scholars were
becoming interested in the question of whether socially responsible firms were also profitable
firms.
1990s
The literature of the 1990s has not so much expanded the definition of CSR, but used the CSR
concept „as the base point, building block, or point-of-departure for other related concepts and
themes, many of which embraced CSR-thinking and were quite compatible with it. CSP,
stakeholder-theory, business ethics theory, and corporate citizenship were the major themes that
took center stage in the 1990s‟. (Carroll 1999, p. 288)
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An important contribution to the literature was made by Wood in 1991 when she revisited the
CSP model and „placed CSR into a broader context than just a stand-alone definition. An
important emphasis in her model was on outcomes or performance‟. (Carroll 1999, p. 289) The
CSP framework developed by Wood and the pyramid of responsibilities developed by Carroll,
with economic responsibilities at the base and philanthropy at the apex, are discussed in depth in
the literature, including Carroll (1999) and Windsor (2001). Swanson (1995) suggested that there
were three main types of motivation for CSR:
The utilitarian perspective (an instrument to help achieve performance objectives);

The negative duty approach (compulsion to adopt socially responsible initiatives to appease
stakeholders); and The positive duty view (businesses self-motivated regardless of social
pressures) (Swanson in Maignan & Ralston 2002).
Wood also identified three main types of processes used by businesses to implement their CSR
motivational principles: environmental management, issues management and stakeholder
management. „Once implemented throughout the organization, these processes help the firm to
keep abreast of, and to address successfully, stakeholder demands‟ (Wood in Maignan & Ralston
2002). However, this may be a somewhat simplistic view of CSR and relationships with
stakeholders.
2.2 Corporate Social Responsibility in the 21st Century
Corporate social responsibility (CSR) is:

 An obligation, beyond that required by the law and economics, for a firm to pursue long
term goals that are good for society
 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 that of the local community and society at large
 About how a company manages its business process to produce an overall positive
impact on society (Ahmed 2008).
There are four dimensions of corporate social responsibility

 Economic - responsibility to earn profit for owners
 Legal - responsibility to comply with the law (society‟s codification of right and wrong)
 Ethical - not acting just for profit but doing what is right, just and fair
 Voluntary and philanthropic - promoting human welfare and goodwill
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How Corporate Social Responsibility is Defined
Definition source Definition Dimensions

Jones, 1980 CSR is defined as the notion that have an Voluntariness
obligation to Stakeholder constituent groups corporations
in society other than stockholders and beyond
that prescribed by law or union contract,
indicating that a stake may go beyond mere
ownership
Hopkins, 2003 CSR is concerned with treating the Voluntariness
stakeholders of the firm ethically or in a Stakeholder
responsible manner. „Ethically or responsible‟ Social
means treating stakeholders in a manner Economic
deemed acceptable in civilized societies.
Social includes economic responsibility.
Stakeholders exist both within a firm and
outside. The wider aim of social responsibility
is to create higher and higher standards of
living, while preserving the profitability of the
corporation, for peoples both within and
outside the corporation
Marsden, 2001 Corporate social responsibility (CSR) is about Social
the core behavior of companies and the Environmental
responsibility for their total impact on the Economic
societies in which they operate. CSR is not an
optional add-on nor is it an act of
philanthropy. A socially responsible
corporation is one that runs a profitable
business that takes account of all the positive
and negative environmental, social and
economic effects it has on society
McWilliams and Actions that appear to further some social Voluntariness
Siegel, 2001 good, beyond the interests of the firm and that Social
which is required by law
Ethical At its best, CSR is defined as the Stakeholder
Performance, responsibility of a company for the totality of Economic
2003 its impact, with a need to embed society‟s Social
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values into its core operations as well as into Environmental
its treatment of its social and physical
environment. Responsibility is accepted as
encompassing a spectrum – from the running
of a profitable business to the health and
safety of staff and the impact on the societies
in which a company operates
Global Corporate Global corporate social responsibility can be Voluntariness
Social defined as business practices based on ethical Stakeholder
Responsibility values and respect for workers, communities Social
Policies Project, and the environment Environmental
2003 Economic
Commission of Corporate social responsibility is about Voluntariness
the European companies having responsibilities and taking Social
Communities, actions beyond their legal obligations and Environmental
2002 economic/business aims. These wider Economic
responsibilities cover a range of areas but are
frequently summed up as social and
environmental – where social means society
broadly defined, rather than simply social
policy issues. This can be summed up as the
triple bottom line approach: i.e. economic,
social and environmental
Pinney, 2001 Corporate social responsibility (CSR) or Social
corporate citizenship can most simply be
defined as a set of management practices that
ensure the company minimizes the negative
impacts of its operations on society
while maximizing its positive impacts
IndianNGOs.com, Corporate social responsibility is a business Stakeholder
2003 process wherein the institution and the Social
individuals within are sensitive and careful Environmental
about the direct and indirect effect of their Economic
work on internal and external communities,
nature and the outside world
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Business for Socially responsible business practices Voluntariness
Social strengthen corporate accountability, respecting Stakeholder
Responsibility, ethical values and in the interests of all Social
2003a stakeholders. Responsible business practices Environmental
respect and preserve the natural environment. Economic
Helping to improve the quality and
opportunities of life, they empower people
and invest in communities where a business
operates
CSR is a concept whereby companies integrate social and environmental concerns in their
business operations and in their interactions with their stakeholders on a voluntary basis. (Green
Paper, 2001). Socially responsibility means not only fulfilling legal expectations, but also going
beyond compliance and investing „more‟ into human capital, the environment and in rapport-
building with stakeholders. It is relevant in all types of companies and in all sectors of activity,
from MSMEs to Multinational Enterprises (MNEs). “A number of companies with good social
and environmental records indicate that these activities can result in better performance and can
generate more profit and growth. (Green Paper, 2001) Research (Industry week, 15 January
2001) has shown that about one half of the above average performance of socially responsible
companies can be attributed to their CSR image while the other half is explained by their
performance. Socially responsible companies are expected to deliver above-average financial
returns. (Green Paper, 2001) CSR has some internal dimensions such as: human resources
management, health and safety at work, adaptation to change and management of environmental
impact and natural resources.
The external dimensions include local communities, business, partners, suppliers and consumers,
human rights and global environmental concerns. Again, CSR may be as simple as sponsoring
social service oriented entertainment events. In essence, „CSR is positive rapport with the
society‟. In a Bangladesh context, several multinational companies and local companies practice
CSR. While the multinationals are influenced by their own ESRB disposition, most of the
business concerns in Bangladesh do not rate high in practicing CSR unless being pressured by
the foreign buyers in case of export oriented business.
There is a large body of academic literature on the stock market effects of CSR, reaching a range
of different conclusions. As McWilliams and Siegel (2000) note, researchers examining the
impact of CSR on financial performance have reported a positive impact (such as Ziegler et al.,
2007), a negative impact (such as Wright and Ferris, 1997), and a neutral impact (such as
23 | P a g e
Schröder, 2007). Since SMEs are generally not traded on the stock exchange, the literature on the
link between CSR and financial markets is usually not applicable to them.
If the whole body of the existing academic literature is examined, as for example in meta-
analyses by Orlitzky et al. (2003) and Margolis et al. (2007), the link between CSR and financial
performance is found to be positive but small, and in any case is not negative. The results of
different studies depend to a significant extent on which specific aspects of CSR and financial
performance are analyzed. Orlitzky et al. (2003) find that the most powerful CSR measure in
terms of effect on financial performance is reputation indices. This suggests that firm
reputational aspects are amongst the most important drivers of the competitiveness effects of
CSR.
Margolisetal. (2007) report that the association is strongest for the specific cases of charitable
contributions, environmental performance, and revealed misdeeds (i.e. public announcements of
actions that indicate socially irresponsible behaviour). The association between corporate
performance and charitable contributions may relate to the reputation effect as found by Orlitzky
et al. (2003), while the association with revealed misdeeds may relate both to reputation effects
and to risk management. The link between environmental and financial performance may relate
to environmental innovations besides reputational or risk management issues. Bird et al. (2007)
have similarly found a link between market value and environmental performance, but also
found that markets rewarded companies that met minimum requirements with regard to diversity
and were the most pro active in the area of employee relations. Margolis et al. (2007) also looked
at 14 studies analyzing the association between corporate transparency and financial
performance. The link was not strong, but the overall conclusion was that financial markets do
react positively to company disclosures regarding socially responsible behavior. Although there
is a certain positive correlation between CSR and financial performance, this in itself does not
explain the causal link. Margolis et al. (2007) addressed this question in their meta analysis, and
found that although there was no financial penalty for CSR, the link from prior financial
performance to subsequent CSR was at least as strong as the reverse.
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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Regulatory Framework: CSR areas
Under the SRO No. 270-Ain/2010, dated 01.07.2010 is given 22 areas of CSR activities for
enjoying 10% tax rebate. The areas are
(1) Donation to organizations engaged in clean water management

(2) Donations to organization engaged in forestation;
(3) Donations to organization engaged in beautifications of cities;
(4) Donations to organization engaged in waste management;
(5) Donations for redressing the hardships caused by natural calamities such as cyclone,
earthquake, tidal wave and flood challenged through Government organizations;
(6) Donations to organizations engaged in establishment and management and management of
old persons homes;
(7) Donations to organizations engaged in the welfare of mentally or physically handicapped;
(8) Donations to educational institutions run for the purpose of education of rootless
children;
(9) Donations to organizations engaged in projects on accommodation for the slum dwellers;
(10) Donations to social organizations engaged in publicity of movements relating to
women‟s rights and anti-dowry practices;
(11) Donations to organizations engaged in feeding and clothing and sheltering and rehabilitation
of orphan/rootless children;
(12) Donations to organizations engaged 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) Donations to organizations engaged in health some situation in Chittagong Hill Tracts, char
areas and areas surrounding breaking up of bank of river;
(14) Grants to organizations engaged in treating cleft lips, cataract, cancer, and leprosy;
(15) Grants the organizations engaged in treating acid victims;
(16) Donations to hospitals engaged in providing free medical treatment to poor patients and
specialized for developing the quality of treatment, such as cancer, liver, kidney, thalassemia,
eye and cardio;
(17) Donations to organizations distributing freely at the level of use of birth –control products
with a view to solving the population problem and to conduct camps for voluntary sterilization;
(18) Grants to Public Universities;
(19) Expenditure incurred through educational institutions recognized by Government for
providing technical and vocational education for meritorious poor students;
(20) Money invested in establishing lab for providing training on computer or information
technology and in establishing infrastructure or in purchasing educational materials for
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implementing English education in public /private educational institutions (under Monthly
Pay Order or MPO);
(21) Donations to organizations engaged in providing technical and vocational training to
unskilled or semi-skilled labor for export of human resources; and
(22) Donations to organizations involved with infrastructure of sports and provision of training
at national level.
3.2 CSR and its Constituents:
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. It is the deliberate inclusion of public interest into
corporate decision-making. Broadly, CSR activities of an organization should embrace to
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.
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.
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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.
3.3 Corporate Social responsibility and stakeholders’ concern within banking

sector:
Banks across the globe have received the considerable amount of pressure from its diverse
stakeholders including shareholders, investors, media, NGOs and customers (Bhattacharya et al.,
2004; Ogrizek, 2001; Frenz , 2005; Jeucken, 2001; 2004; Coupland, 2005) to carry out business
in a responsible and ethical manner. As a result, increased consciousnesses with regards to
sustainability issues for financial institutions have been observed across the globe during the last
decade. Researchers (Hopkin and Cowe, 2003; Ian, 2005) contend that socially irresponsible
operation can have a negative impact on share prices and brand reputation of a bank and more
customers now a days increasingly inquire on the bank‟s Social responsibility position. In effect,
socially responsible investors (see Carbon Disclosure Project on its own website:
www.cdpproject.net) collectively have voiced concern on corporations to take into account
contemporary global issues such as corporate responsibility on climate change in recent years.
Similarly, the other powerful stakeholders that have significantly shaped the issues and brought
these to public sentiment are the state regulatory bodies, media‟s, NGOs in addressing social
responsibility issues in banking sector (Jeucken, 2001; Bouma et al, 2001; Baron, 2000;
Bhattacharya, 2004; Decker, 2004 Wilmshurst & Frost, 2000; Patten, 2002) and these
stakeholders‟ strong engagement have the likely impact to be a main driver to revolutionize in
CSR and CSR reporting practice. The traditionalist might see this as a conflict between a firm's
"concerns for profits" versus its "concern for society," but it is suggested here that this is an
oversimplification.
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Relation between CSR and Corporate Governance
Both CSR and Corporate Governance (CG) by definition feature as an issue of bank‟s
management practices and therefore sometimes get confused with each other. The question
mainly moves round the fact whether the CSR and CG go the same way of bank‟s management
or they have their respective way of management. Question also arises whether CSR is part of
CG or vice-versa. It is already known that CSR is based on self-regulatory principles linked to
internal and external management of the company. On the other hand the term corporate
governance indicates to an idea of bank‟s governance and management issue.
Transparency in corporate decision making and accountability to shareholders are the core points
of CR.
Corporate governance is a broad theory concerned with the alignment of management and
shareholders‟ interests‟ corporate governance is concerned with holding the balance between
economic and social goal and between individual and communal goals.
It virtually attributes importance to the efficient use of resources and in the same way requires
accountability for the preservation and stewardship of those resources.
Organization for Economic Co-operation and Development (OECD) has provided a model
framework for corporate governance known as OECD Principles of Corporate Governance.
These principles have stated some fundamental aspects of companies‟ governance. They are
summarized as follows
 Distribution of duties and responsibilities among different supervisory, regulatory and

enforcement authorities;
 Protection and facilitation of the exercise of shareholder rights;
 Ensuring equitable treatment of all shareholders, including minority and foreign
shareholders;
 Recognition of the rights of stakeholders established by law or through mutual
agreements;
 Encouraging active co-operation between corporations and stakeholders in creating
wealth, jobs, and the sustainability of financially sound enterprises
 Publication of regular and accurate disclosure concerning bank‟s financial situation,
performance, ownership and governance and providing strategic guidance, composition
and functions of the board of directors and their accountability to the company and
shareholders.
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In the light of the synthesis of OECD principles of corporate governance and above mentioned
definitions of CG it becomes clear that the CG is a broad issue of bank‟s management process
covering a plethora of internal and external management.
The corporate governance framework is the widest control mechanism, both internally and
externally to stimulate the proper and efficient use of corporate resources and in the same way to
require accountability for taking care of those resources.
The aim of CG is to align the interests of individuals, corporations and the society through an
ethical basis and to fulfill the long term strategy of the owners. Corporate governance is
considered as a means to the maintenance of balance between economic and social goals as well
as between individual and community goals. Against the said backdrop CG is the broader issue
of management of a company than CSR However, Mark Walsh and John Lowry in their joint
article on CSR and Corporate Governance under the head of „relationship between CG and CSR
hold the reverse opinion saying „corporate governance is an increasingly important aspects of
CSR.... to provide the more solid foundations on which broader CSR principles and business
ethics can be further enhanced.‟
It encourages management to develop the business in the best interest of the shareholders and
does not allow it waste, misuse or divert the corporate assets. On the other hand, despite legal
underpinnings, the environmental, labor and consumer obligations are more in connection with
CSR than corporate governance.
CSR expects from the companies to do more than what the concerned laws requires. Corporate
governance more often moves round the narrower constituency, that is, the interests of the
shareholders. The conflicting opinions as the relation of CG with CSR as revealed by above
discussion chiefly lie on how it has been defined. For example, if it is narrowly defined it
concerns the relationship of company to its shareholders. If it is broadly defined the relationship
of the company extends to the society. A careful review of the model governance framework of
OECD shows that corporate governance covers a range of issues for the protection of the
interests of shareholders and stakeholders .Moreover; there are two models of corporate
governance, shareholders and stakeholders. In the shareholder model governance system, the
responsibility for decision maker is to maximize shareholders‟ wealth as this model introduces
classical principal and agent theory where managers considered as an agent of the shareholder
principal.
According to stakeholder model, it has been viewed that the corporation in fact can not be
run without the contributions of different stakeholder groups like customers, employees,
suppliers, the community of which it is a part and the environment and therefore at the event of
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decision-making , the corporate should take into account how their decisions impact these
constituents.
Although the shareholder model has the preference over the stakeholder model which is growing
slowly as a part of governance framework, the exercise of both the models suggest that there is
no scope to look narrowly into the corporate governance aspects.
However, it can be argued that CSR issues are of voluntary or softer nature and it is based on the
self regulatory corporate codes and the corporate governance is more often mandatory based on
statutory provisions applicable at national level. For example, the company law of a country
defines the composition of the board of directors, their rights and duties towards shareholders,
duties of the managers and other organizational activities. Security and Exchange law provides
the principles regarding the mandatory financial disclosures, auditing and so on. The duties of
the managers and directors may be of softer issues when they concern the promotion of ethical
behavior towards the shareholders.
In conclusion it may be said that in respect of bank‟s governance, control and management, the
corporate governance issues are broad in nature whether mandatory and softer. CSR is one of the
aspects of this governance framework which is voluntary and softer in nature. The mandatory
governance issues are enforced by the litigation or compliance with the legal provisions. Softer
social issues are enforced by stakeholders‟ pressure, boycotts, compliance with the self-
regulatory codes of conduct.
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analysis of CSR of commercial banks in Bangladesh
Table 01: Major CSR activities of Sample banks at a glance

DBBL MBL PBL SBL BAL
Education Education Education Education Education
Health Disaster Health Disaster Health Disaster - Health-Care Health Dhaka City
Culture& management management Environment Sports Beautification
Sports Sports Sports Art & culture Environment
Miscellaneous Art & culture Others Community Culture and
Others development Others Heritage
Sports
Disaster
management
Others
Source: Annual report of DBBL, MBL, SBL, PBL and BAL 2010-11.
5.1 Comparative Analysis:
Table 02: Compliance with regulatory framework of five banks

SN CSR areas DBB MBL PBL SBL BAL %
1 Engaged in clean water management -L - - - - 0
2 Engaged in afforestation - - - - - 0
3 Beautifications of cities - - √ √ √ 60
4 Waste management - - - - - 0
5 Natural calamities √ √ √ √ √ 100
6 Old persons homes - - - - - 0
7 Mentally or physically handicapped √ √ - - - 40
8 Education of rootless children √ √ √ √ √ 100
9 Accommodation for the slum dwellers - - - - - 0
10 Women‟s rights and anti-dowry practices - - - - - 0
11 Rehabilitation of orphan/rootless children √ √ √ √ √ 100
12 In research on independence war, √ √ √ √ √ 100
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 - - - - - 0
Tracts, char areas
14 Engaged
and areasin treating cleft
surrounding lips, cataract,
breaking up of √ - - - √ 40
15 Engaged
cancer, in treating
bank of and leprosy acid victims
river √ - - - 20
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16 Hospitals engaged in providing free √ √ √ √ √ 100
medical treatment to
17 Birth control products with a view to
poor patients - - - - - 0
solving the population
18 Grants
problemtoand
Public Universities
to conduct camps for √ √ - - - 40
19 Technical
voluntary sterilization education for
and vocational √ - - - √ 40
meritorious poor students.
20 Training on computer or information √ - √ √ √ 80
21 Technical
technologyandandvocational training to
in establishing - - - - - 0
22 Sports and provision
unskilled or semi-
infrastructure of training
or in purchasing at √ √ √ √ √ 100
Total
national
skilled level
labor for exportforofimplementing
human 12 08 08 08 10 13
educational materials
resources
English education in public
/private
Table 02 tries educational
to verify institutions
contribution of banks(under
in different areas of CSR. There are 22 prescribed
areas of CSRMonthly
but onlyPay13Order
areas or
areMPO)
participated by five banks (59%). So it is clear that 9 areas
(41%) there is no contribution from any banks. There are only 6 areas (100%) where each bank
has participation and the lowest participation is 3 areas (40%). Among the 5 banks DBBL has the
highest participation areas (12) and then bank Asia Ltd (10). It is clear that participation of CSR
areas of different bank is considerably limited because many areas where the bank has no CSR
contribution that is very concerning issue.
Figure 1: Total Contribution of CSR of five banks (million)
BAL, 33.43
PBL, 21.37
DBBL, 125.43
SBL, 23.33
MBL, 65.91
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Figure 1 shows total contribution of five banks in CSR in the year 2010. Among the five banks DBBL is
clearly ahead then others. Most of the banks contribution is less than 50% of DBBL. Lowest contribution
is Prime bank where Mercantile bank in second position among the five banks.
Figure 2: Contribution to Education (million)
Contribution to Education
100
90
80
70
Million Tk.
60
50
40
30
20
10
0
DBBL MBL SBL PBL BAL total
2010 45.75 2.7 8.18 6.76 2.54 65.93
2011 50.16 7.19 16.21 11.15 7.31 92.02
Figure 2 indicates contribution of education areas of 5 banks where DBBL shows a strong
contribution then other banks. Total contribution of education in the year 2010 to 2011 is
increased about 40%. In case of growth Bank Asia is highest (188%) where DBBL is lowest
(9.62%) but in amount not a single bank is nearer to DBBL where DBBL contributes more than
50% of total contribution. Southeast bank is in the second position both 2010 and 2011.
Table 3: Contribution to Health (million)
Contribution to Health
60
50
Million Tk.
40
30
20
10
0
DBBL MBL SBL PBL BAL Total
2010 32.02 7.95 2.71 3.76 2.23 48.67
2011 27.02 13.15 3.75 5.25 4.55 53.72
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Figure 3 presents health areas contribution of 5 banks. DBBL also in the top ranking but its
participation is decreasing (16%) where Bank Asia increasing its participation (104%). On the
other hand DBBL has the highest contribution amount (27.02) then other banks.
Figure 4: Contribution to Art and Culture (million)
Contribution to Art and Culture

30
25
Millinon Tk.
20
15
10
5
0
2010 3.75 5.61 0.1 0 0 9.46
2011 4.5 14.42 0.1 0 10.2 29.22
Figure 4 shows CSR contribution of five banks in art and culture. Here information is not
available all banks but MBL has a good contribution, they have both (growth and amount)
highest participation in the areas. In 2010 Bank Asia has a good contribution where DBBL
earned third position.
Figure 5: Contribution to Sports (million)
Contribution to Sports
Million Tk.
30
20
10
0
2010 3.45 0.93 5 0 3.25 12.63
2011 5 7.88 7.76 0 7.5 28.14
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Figure 5 shows contribution of sport of different banks in the year of 2009 and 2010. In the area
MBL has highest participation in 2010 but comparatively Southeast bank participation is better
than other banks in the year 2009 and 2010
Figure 6: Contribution to Natural Disaster (million)
BAL, 5.48
DBBL, 12.5
PBL, 5.18
SBL, 5.86
MBL, 11.87
Figure 6 presents CSR contribution of different banks in the area of natural disaster in the year
2011. In the area every bank has participation. DBBL (31%) is comparatively ahead than others.
MBL also shown a good participation where total participation is 40.89 and its attainment is
29%.
Figure 7: Profit and CSR expense relationship of five banks
CSR Expense (% of total Profit 2011)
16.00%
14.00%
12.00%
Percentage
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
DBBL MBL SBL PBL BAL
% of Profit 15.87% 3.32% 0.50% 4.65% 1.81%
Source: Annual report of DBBL, MBL, SBL, PBL and BAL 2010-11
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The Figure 7 shows total profit and their contribution in relationship of profit to CSR in 2011.
DBBL spend highest (15.87%) in CSR in 2011. PBL has also a remarkable increase in CSR
expenditure (4.65%) in 2011.MBL spent 3.32% of their profit to CSR; BAL spent 1.81% while
SBL spent only 0.5%of their total profit to CSR.
5.2 CSR practices in banks: An analytical review
Highlights of CSR activities of Banks in 2011
All banks reported implementation of ongoing CSR programs in 2011 adopted with decision at
the highest (board of directors) level. For the first time thus far in our banking sector, four of
these banks reported having held stakeholder consultations before drawing up of their CSR
programs.
As in preceding years, CSR initiatives of banks in 2011 continued focus on

 Financial inclusion of less privileged population segments and underserved economic
sectors.
 Emergency relief in humanitarian distresses.
 Promotion of health, education and cultural/recreational activities for advancement and
well being of underprivileged population segments.
 Financing and promotion of environment friendly projects.
 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 2011
CSR reports of banks included:
 Construction of 144 feet long bridge connecting 18 villages of Rowmari, Kurigram with
economic activities in the rest of the district; a physical infrastructure installation with far
reaching impact on livelihoods of the villagers.
 Grant support for construction of sweepers‟ colony at Shahjalal Science and Technology
University in Sylhet,
 Grant supports for Old Peoples‟ Home in Dinajpur; both physical infrastructures, for
benefit of the poor and elderly.
 Funding of safe drinking water provision initiatives, by installation of arsenic free deep
tube wells and rainwater harvesting plants.
 Funding holding of workshops/training courses for English teachers and Head teachers of
some schools.
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 In financial inclusion, cluster based support initiatives for people in specific economic
activities, like dairy, handloom, light engineering, poultry, fishery etc.; interest free
lending in pilot projects for landless marginal farmers.
Beginning phased implementation by banks of the Environmental Risk Management Guidelines

issued by BB, introducing environmental risk scrutiny of projects prior to financing decisions.
Many of the banks have reported increasing engagement in financing of solar as well as organic
waste based energy (biogas) generation. Carbon footprint reduction initiatives in internal
practices of banks, like introduction of a paperless „no print day‟ and formation of „no print
team‟ in a bank. Besides such sporadic environmentally beneficial initiatives reported by some of
the banks, for the first time in CSR reporting in Bangladesh‟s banking sector a (foreign) bank
reported in 2011 of incorporating environmental sustainability measures in internal decision
making; actively managing their direct environmental impacts by reducing energy and water use,
waste and carbon dioxide emission.
Besides CSR initiatives involving direct expenditure, financial inclusion initiatives of banks
proceeded apace in 2011. All banks participated actively in promotion of lending to SMEs and
agricultural; PCBs were particularly active in these areas. FCB lending for agriculture declined
rather sharply however, against general trend. For broader, deeper financial inclusion, banks
proceeded ahead on multiple fronts including increased rural bank branch presence, mobile
phone banking, and opening of bank accounts for low income population free of charge with
nominal Taka 10 initial deposit.
Total annual direct CSR expenditure of banks appears to have stabilized in 2011 following sharp
increases in three years up to 2010, apparently due to incompleteness of reporting in the earlier
years:
The modest decline in direct CSR expenditure in 2011 compared to the preceding year is mainly
on count of humanitarian and disaster relief, because of fewer distress episodes calling for such
relief.
Non Bank Financial Institutions (NBFIs) in Bangladesh have started reporting their CSR
practices in 2011. The reports reflect inadequate understanding of the CSR concepts on the part
of NBFIs, indicating a need for BB to engage with them further in getting the CSR concepts
across.
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Figure 8: Total CSR Expenditure (2008-2011)
CSR Expenditure
2500
2000
Million Tk.
1500
1000
500
0
2008 2009 2010 2011
CSR expenditure 410.7 553.8 2329.8 2188.33
(Source Bangladesh Bank)
5.3 Trends of Sectoral pattern of direct CSR expenditure reported by banks
Table 3: Trends of Sectoral pattern of CSR expenditure reported by banks

Taka in million
2008 2009 2010 2011
Amount % Amount % Amount % Amount %
Humanitarian 58.60 14.27 125.10 22.59 460.41 19.76 188.03 8.59
&
disaster relief
Education 30.50 7.43 94.80 17.12 400.79 17.20 612.48 27.99

Health 112.10 27.29 245.50 44.33 689.07 29.58 520.42 23.78
Sports 49.80 12.13 1.20 0.22 265.23 11.38 359.07 16.41
Art & culture 0.80 0.19 0.30 0.05 328.91 14.12 171.52 7.84
Environment - - - - 59.78 2.57 138.07 6.31
Others 158.90 38.69 86.90 15.69 125.58 5.39 198.73 9.08
Total 410.70 100 553.80 100 2329.8 100 2188.33 100
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It may be seen from the table 1 above that even though CSR expenditure in health sector
shrinked from the previous year, education (27.99%), health (23.78%) and sport (16.41%)
persistently getting major shares (68.18%) of CSR expenditure, alongside humanitarian and
disaster relief (8.59%) continued getting significant share. Expenditure on Art and culture
(7.84%) decreased and expenditure on environment doubled in 2011 from 2010. Notable specific
features of expenditure in CSR programs of banks in 2011 are summarized below
Figure 9: Sectoral shares of CSR Expenditure
1800
1600
1400
1200
1000
2011
800 2010
2009
600 2008
400
200
A number of banks placed high priority on CSR expenditure supporting education of students
from lower income group parents. Education sector (27.99%) got the highest weightage as
percentage of total CSR expenditure in 2011.
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CSR expenditures of banks in the health sector comprised contributions to established hospitals,
clinics etc. as well as running own non-profit hospitals etc. In 2011, health sector got 23.78
percent of total CSR expenditure.
In terms of a BB guidance circular issued in 2011, banks are paying due attention to gender
fairness issues in their internal work environment, recruitment, maternity leave policies etc. and
are reporting to BB on gender issues.
Banks are nominating one official at each branch as key focal person for providing financial
services to the disabled. They are helping mentally and physically disabled people of the society
through following CSR programs
 awarding scholarships and providing educational materials to physically challenged

students,
 arranging free surgical operation for children and adolescents with clubfeet and plastic
surgery operation camp,
 setting up temporary eye treatment project,
 extending financial assistance to war wounded Freedom Fighters,
 providing financial aids for the treatment and education of hearing impaired poor people
of the society, and
 Building awareness about Autism etc.
Some banks are incurring CSR expenditure directly from their own budget, while a few others
are doing so through separate entities established as foundations/trusts supported by contribution
from CSR expenditure allocation of the banks concerned.
CSR expenditures of banks as percentage of their after tax profit range from 0.06% to 15.87%
(Annexure 2). The percentages are generally in lower single digits, but in double digits for 3
PCBs.
5.4 Trends of CSR initiatives not involving direct expenditure: promotion of

financial inclusion
Besides direct expenditure in CSR initiatives, banks have continued enthusiastic engagement in
the ongoing financial inclusion campaign launched by BB, reaching out with financial services to
excluded population segments and underserved economic sectors. The initiatives include
extending branch and ATM networks into rural areas, mass scale opening of no-frills bank
accounts with nominal deposits for poorer people (about ten million such new accounts opened
by now), adopting new cost saving remote delivery modes for financial services like mobile
phone/smart card based banking, agricultural and SME financing, financing schemes for
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renewable energy generation projects and so forth. BB has supported these initiatives by putting
in place necessary enabling infrastructure, including a fully automated interbank clearing and
settlement platform for paper based and electronic payment instruments, an upgraded online
credit information bureau, and some refinance lines for banks against their SME and
environment focused lending.
3 SCBs, 4 SDBs, 24 PCBs and 7 FCBs reported substantial engagement in 2011 in credit
programs promoting financial inclusion of socially disadvantaged rural and urban population
segments. Besides agricultural credit programs pursued by all banks (with FCBs lending mostly
through locally active MFIs), the financial inclusion programs of banks comprised:
Figure 10: Major Financial inclusion programs Undertaken by Banks
Source Bangladesh Bank
a) Self-employment Credit and Small and Medium Enterprise (SME) lending programs of 1
SCB, 1 SDB, 13 PCBs and 6 FCBs, taken up solo or in association with locally active
Micro Finance Institutions (MFIs).
b) Financing program for installation of biomass processing plants generating biogas fuel
and organic manure, for Effluent Treatment Plants (ETPs) in manufacturing
establishments, and for solar energy units in households in off grid rural areas including
char lands, of 1 SCB, 8 PCBs and 2 FCBs.
c) Financing program for rural craftsmen and folk/music/drama groups holding cultural
events in tourism sites, taken up by 3 PCBs and 1 SCB.
44 | P a g e
d) Initiatives aimed at prompt delivery of remittances of migrant workers to recipients in
remote rural households, in programs of card based/mobile phone based delivery of 17
PCBs.
e) The landless sharecroppers who were otherwise deprived of institutional credit are now
financed by banks. Under this scheme, about Taka 3.1 billion was disbursed among
2,70,802 sharecroppers till date. To make the agriculture inputs available and agriculture
credit disbursement easy among the farmers, 18.2 million agro-input assistance cards
have been distributed across the country and savings accounts of almost 10 million
farmers have been opened accepting Taka 10 only as an initial deposit.
f) To promote cost effective expansion of off-branch banking services, 21 banks obtained

mobile banking licenses, out of them twelve have started operation, offering basic
banking and financial services such as payment of inward and local remittances,
withdrawal and deposit of cash from bank branches, payments of utility bills, payments
for purchasing goods and services, payments of salaries of corporate officials, industries
and factories and other offices, payments of allowances and pensions, fund transfers,
immediate mobile balance recharging and so forth.
g) In SME financing, banks have focused on clusters of specific activity areas like light
engineering and agricultural tools, handicrafts and handloom weaving, agar harvest,
chatal business, maze farming, cattle rearing and biogas generation, solar energy etc.
Chart 3 and 4 show increasing trends in both outstanding SME and agricultural credit.
Engagements of all bank groups in SME lending are seen to be on rising trend, more
prominently so for PCBs and SCBs.
Figure 11: Outstanding SME Credit
Outstanding SME Credit

Billion Tk.
1000
800
600
400
200
0
SCBs SDBs PCBs FCBs Total
2008 150.1 42.1 232.46 7.64 432.3
2009 138.2 41.13 333.1 15.74 528.17
2010 218.4 42.47 390.84 18.88 670.59
2011 260.08 47.68 484.29 20.86 812.91
45 | P a g e
Two agricultural SDBs (BKB, RAKUB) and four SCBs traditionally play major roles in
agricultural lending; PCBs are seen to be expanding their agricultural lending gradually (Chart
4).
Figure 12: Outstanding Agricultural Credit
Otustanding Agricultural Credit
300
250
Billion Tk.
200
150
100
50
0
SCBs SDBs PCBs FCBs Total
2008 49.57 98.92 16.63 3.01 168.13
2009 53.19 108.37 18.55 5.73 185.84
2010 60.99 128.32 21.08 5.19 215.58
2011 70 147.88 32.94 1.56 252.39
Banks have disbursed credit at 4 percent concessional interest rate to promote cultivation of
different varieties of pulses, oil seeds, spices especially ginger, turmeric, onion, chilly, cumin
and maize. Banks are being compensated against the low lending rate with 6 percent govt.
subsidy disbursed by BB. .An SCB extended interest free agricultural loans to landless/marginal
farmers in modest volume under a pilot project, compensating the lending branches for cost of
fund from the bank‟s CSR expenditure.
Agricultural loan disbursement for fish culture, livestock, agricultural and irrigation equipment,
salt production increased from Tk. 3823.70 crore to Tk. 4458.33 crore in 2011. Moreover, credit
disbursement to farmers of ignored/underdeveloped areas increased from Tk. 0.93 crore to Tk.
9.37 crore in 2011.Banks are disbursing credit for different Bio-gas schemes to meet energy
requirements of ruraln households. Such project produces organic fertilizers for higher yields in
crops and horticulture increasing milk and meat production to meet nutritional requirements of
the population.
To redress electricity and gas deficiency through using environment-friendly alternative energy
sources and for maintaining natural stability and preserving public health, banks have started
financing of setting up solar panel in remote rural areas of the country.
46 | P a g e
Banks are financing projects for energy generation from bio mass processing (cow dung, poultry
waste, garbage etc.). One of the banks has financed the first Compost Plant under CDM. Some
banks have specially designed project for the vulnerable areas affected by climate change.
5.5 Progress in deepening of CSR practices in banks
Institutionalizing CSR at corporate level

All banks reported having embraced CSR in 2011 with decision at the highest corporate level. 16
PCBs, 3 SCBs and 1 FCB have formed separate Foundations or Trusts as non-profitable
institutions solely devoted to the cause of charity, social welfare and other benevolent activities
towards the promotion CSR objectives. These banks have committed specified percentages of
their pre-tax profit/net profit each year towards CSR activities. CSR is thus seen to have been
institutionalized at corporate level in banks operating in Bangladesh.
Ingraining CSR practices within the organization & client businesses

Table 4: Number of banks ingraining CSR practices within own establishment and in their client
businesses
CSR objective SCBs SDBs PCBs FCBs

Adopted socially and environmentally 1 4 30 9
responsible practices in own internal
operations
Providing a modern, healthy and safe
workplace and creating a learning and 1 2 24 5
development environment
Reduce the bank‟s environmental impact 1 2 24 5
as a result of its operation and business
activity.
Foster CSR in their client businesses
assessing the social and environmental 1 2 20 5
impacts of the projects seeking ﬁnance.
Ensuring compliance of regulatory 1 2 21 5
environmental and social requirements
Engaging with clients in assessing
project‟s social and environmental 0 0 4 3
impacts beyond the regulatory
requirements
47 | P a g e
 44 out of 47 banks (1 SCB, 4 SDBs, 30 PCBs and 9 FCBs) reported having taken steps
for adoption of socially and environmentally responsible practices in their own internal
operations (Table 6) in 2011.
 1 SCB, 2 SDBs, 24 PCBs and 5 FCBs reported having taken actions towards providing a
healthy and safe workplace and creating an environment conducive to learning and
development. 1 SCB, 2 SDBs, 24
 PCBs and 5 FCBs reported having taken steps to reduce the adverse environmental
impacts of their operations and business activities, including use of recycled materials,
minimizing generation of wastes etc.
 1 SCB, 2 SDBs, 20 PCBs and 5 FCBs reported having taken steps in 2011 to foster CSR
in their client businesses in various economic sectors, assessing the social and
environmental impacts of the enterprises/projects seeking finance (Table 6). They have
mentioned their practices of discouraging projects that are likely to have adverse impact
on environment. Some banks have also reported introducing guidelines for assessment of
environmental and social impacts of the projects.
5.6 CSR engagement through donations to CSOs, NGOs

Banks reported significant community investments in 2011 by way of donations to initiatives of
Civil Society Organizations (CSOs), NGOs and institutions involved in health, education and
culture; for social and environmental improvement including nutrition, health and education in
the disadvantaged population segments (Table 5).
Table 5: Community investment for social & environmental improvement

Banks having community investments by 3 3 22 6
way of donations to CSOs, NGOs or others
1. Education 3 2 17 3
2. Health 3 3 14 2
3. Disaster relief 2 1 12 1
4. Sports 0 1 6 0
5. Art and Culture 1 0 8 0
6. Environment 0 0 4 1
7. Others 0 0 9 2
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The large majority of banks are seen to have gone for CSR engagements through contributions to
CSOs, NGOs active in the respective fields; across the entire sector spectrum for CSR
expenditures appearing at Table 1. These include hospitals, schools etc. run through separate
trusts/foundations established by banks.
Table 6: Direct social & environmental interventions

Banks conducting direct social 4 4 25 7
interventions, both as occasional measures
or sustainable
1. projects
Education 2 1 18 6
2. Health 2 0 17 6
3. Disaster relief 4 4 25 4
4. Sports 2 1 11 2
5. Art and Culture 1 0 11 2
6. Environment 1 0 6 2
7. Others 2 0 17 4
5.7 Direct CSR expenditures reported by banks

Name of Bank 2008 2009 2010 2011
Sonali Bank Limited 10,500,000 - 59,90,000 18,200,000
Rupali Bank Limited - - 16,700,000 61,274,808
Janata Bank Limited 5,000,000 - 141, 57,028,000
Agrani Bank Limited - 3,500,000 405,000
51,350,000 57,100,000
BKB - - - 100,000
BDBL - - 3,975,000 500,000
RAKUB - 500,000 1,452,000 1,056,000
BASIC Bank Limited 400,000 - 23,700,000 31,600,000
Eastern Bank Limited 1,000,000 6,738,669 31,317,000 11,900,000
Bank Asia Limited. 6,920,000 1,000,000 40,550,000 33,444,180
Dutch Bangla Bank Limited 171,016,500 159,206,500 168,860,000 341,830,000
IFIC Bank Limited 10,559,000 - 11,750,000 17,700,000
Mutual Trust Bank Limited - 3,500,000 18,865,000 2,900,000
Jamuna Bank Limited 1,451,338 4,576,813 17,000,000 55,200,000
BRAC Bank Limited 7,360,000 21,569,660 38,551,000 35,900,000
Pubali Bank Limited 24,492,600 18,883,200 49,510,000 72,771,135
49 | P a g e
Premier Bank Limited 7,507,800 11,570,000 57,300,000 22,000,000
Uttara bank Limited 8,900,000 3,080,000 60,000,000 14,100,000
South East Bank Limited 14,654,375 - 38,400,000 15,100,000
NCC Bank Limited 11,000,000 4,380,000 17,700,000 8,500,000
National Bank Limited 47,269,000 68,404,000 142,350,000 36,822,000
Trust bank Limited 1,000,000 46,750,000 48,100,000 81,200,000
Bangladesh Commerce Bank 100,000 2,870,000 1,000,000 3,687,000
Ltd.
Mercantile Bank Limited 12,170,000 9,276,000 92,530,000 49,400,000
Dhaka Bank Limited 22,400,000 22,926,000 36,041,000 36,300,000
AB Bank Limited. - - 50,200,000 29,836,000
The City Bank Limited - 4,980,000 11,703,000 1,351,500
Prime Bank Limited - - 291,420,000 172,090,000
One Bank Limited - 8,609,500 15,920,000 4,370,000
United Commercial Bank - - 16,059,000 46,500,000
Limited
Standard Bank Limited 6,000,000 - 38,800,000 11,800,000
Social Islami Bank Limited - - 24,689,080 24,484,990
First Security Islami Bank 1,000,000 - 43,630,000 80,850,500
LimitedBank Limited
EXIM 19,300,000 - 231,825,000 180,900,000
Islami Bank Bangladesh - 116,270,000 232,631,000 410,700,000
Limited
Al-Arafah Islami Bank 12,500,000 8,030,000 70,400,000 20,900,000
Limited
Shahjalal Islami Bank Limited - 10,237,000 24,033,300 10,700,000
ICB Islamic Bank Limited 125,000 - 2,518,000 562,500
Standard Chartered Bank - - 41,550,000 70,100,000
CITI Bank NA - - 11,003,000 12,700,000
HSBC 200,000 16,400,000 47,160,000 31,800,000
Habib Bank Limited - - 900,000 150,000
Commercial Bank of Ceylon - 1,560,750 6,580,000
Woori Bank - - 420,000 300,000
Bank Al-Falah Limited 7,000,000 - 4,100,000 2,786,000
National Bank of Pakistan - - 550,000 400,000
State Bank of India 875,000 525,000 400,000 2,917,630
Total 410,700,613 553,782,342 2,329,778,0 2,188,329,7
00 43
50 | P a g e
5.8 CSR expenditures as % of after tax profit & CSR expenditures in
Education Sector reported by banks in 2011
CSR Exp. as % of CSR Exp. In Education
Name of Bank After tax Profit Sector as % of Total CSR
Sonali Bank Limited 0.34% 16.48%
Exp.
Rupali Bank Limited 3.45% 12.43%
Janata Bank Limited 0.82% 20.25%
Agrani Bank Limited 0.69% 60.42%
BKB - 100%
BDBL 0.07% 0%
RAKUB - 0%
BASIC Bank Limited 3.23% 53.80%
Eastern Bank Limited 0.47% 47.06%
Bank Asia Limited. 1.81% 54.99%
Dutch Bangla Bank Limited 15.87% 62.40%
IFIC Bank Limited 2.12% 43.50%
Mutual Trust Bank Limited 0.71% 68.97%
Jamuna Bank Limited 3.70% 20.83%
BRAC Bank Limited 2.16% 49.86%
Pubali Bank Limited 2.22% 5.40%
Premier Bank Limited 3.56% 34.09%
Uttara bank Limited 0.85% 13.48%
South East Bank Limited 0.50% 53.64%
NCC Bank Limited 0.39% 41.18%
National Bank Limited 0.65% 25.23%
Trust bank Limited 13.18% 54.93%
Bangladesh Commerce Bank Ltd. 5.27% 0%
Mercantile Bank Limited 3.32% 23.89%
Dhaka Bank Limited 1.68% 4.13%
AB Bank Limited. 2.25% 26.14%
The City Bank Limited 0.06% 24.05%
Prime Bank Limited 4.65% 16.19%
One Bank Limited 0.29% 0%
United Commercial Bank Limited 1.48% 21.51%
Standard Bank Limited 0.90% 0.85%
Social Islami Bank Limited 1.94% 2.57%
First Security Islami Bank Limited 13.29% 15.70%
EXIM Bank Limited 8.71% 9.20%
Islami Bank Bangladesh Limited 6.49% 13.71%
51 | P a g e
Al-Arafah Islami Bank Limited 0.97% 4.78%
Shahjalal Islami Bank Limited 0.98% 71.96%
ICB Islamic Bank Limited - 88.89%
Standard Chartered Bank 1.13% 6.42%
CITI Bank NA 2.25% 54.33%
HSBC 0.74% 31.45%
Habib Bank Limited 0.22% 0%
Commercial Bank of Ceylon 1.11% 74.09%
Woori Bank 0.47% 0%
Bank Al-Falah Limited - 35.89%
National Bank of Pakistan 0.30% 37.50%
State Bank of India 0.51% 4.71%
Total 2.40% 27.99%
Source: Bangladesh Bank.
52 | P a g e
53 | P a g e
Conclusion
This is true that banks are paying more to their CSR activities but not so much as their earnings
increases. Common CSR practices in Bangladesh by different organization are centered on
mainly poverty alleviation, healthcare, education, charity activities, cultural enrichment, youth
development, women empowerment, patronizing sports and music etc. (Alam Shafiul, et. Al
2010). If we compare their profits that will be clear. DBBL contributes (15.87%) of profits to
CSR activities on the other hand MBL (3.22%), PBL (4.65%), SEBL (0.5%), BAL (1.81%). It is
very concerning that all banks contributes a little amount of profits to CSR. From the study it is
clear that participation of different areas of CSR activities of different banks is limited. A
prescription has given where there are 22 areas of CSR are identified but most of the banks
participation is limited to around 10 to 13 areas. DBBL shows the highest areas (11) of
contribution, where MBL (8), PBL (8), SBL (8) and BAL (10) areas respectively. It is a matter
of thinking that banks aren‟t uses their maximum in CSR areas. 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 control products etc. no participation of any banks. That is very alarming for every bank.
Another think noticed from the study that every bank has good attention and consideration to
education and health areas. Every bank of the study contributed highest amount in education and
the next area is health. Another important matter, banks are very concern to contribute natural
disaster and disaster management specially cyclones (Aila)*, flood affected areas etc. Every bank
contributed to our prime minister Relief fund especially for flood affected people, BDR munity.
Now CSR is a demand of the people to the organization. But CSR contribution of our private
CB‟s is not only corporate responsibility but also tax rebate benefits. The argument is clear when
Bangladesh Bank requested all banks to help flood affected people and their contribution will be
treated as CSR activities. CSR disclosure isn‟t mandatory in our country but it‟s the part of
financial statement that is shown in annual report.
During the study period it was very difficult to collect each and every types of information of
CSR from annual report. The main limitation was no specific information about CSR, where
there is information but no strict information like amount, areas etc. A few banks mentioned
amount in different areas. Most of the banks used other activities but what are the areas and how
much amount used no such information. Interestingly a few banks use some information like
milad, annual picnic, concert, branch opening, anniversary activates are their CSR activities.
From the study it is easily like to say that our private CB‟s are very aware about CSR
performance and their contribution are increasing year to year. As a result banks should declare
how much amount of their profit would be used to CSR. Banks should use a good portion of
54 | P a g e
their profit to CSR functions. They should increase their contribution areas because 45% areas
no participation at all. Through they are contributed highest amount in education and health but
this is not enough. Every bank should make a good attention to the technical education as well as
English learning programs. In the study a common picture is shown that is contribution of
DBBL. Its contribution is about half (47%) of total contribution. So every bank should follow the
practices of DBBL. Finally we like to say our private CB‟s CSR practices aren‟t good enough
but it is increasing that will be enlighten our society as well as banks growth.
6.2 Recommendations:
The following could be some priority areas, among the broad range of possible useful initiatives:
 Spending a small amount of money for various different causes will ultimately fail to
produce the desired result. A smart Bank wanting to be a good citizen should really
choose one cause.
 Banks should have a plan for financial inclusion for the under privileged people of
Bangladesh. There are 47commercial bank operating in the country. Each bank can select
a district with a view to financial inclusion, and try to drive away the money lenders and
hundi business.
 Self-employment credit and small and Medium Enterprise (SME) lending programs,
taken up solo or in association with locally active Micro Finance Institutions (MFIs),
designed to create productive new on-farm /off-farm employment, such initiatives are of
particular urgency for regions with endemic high seasonal unemployment (e.g., the
manga afflicted Northern districts);
 Financing programs for installation of biomass processing plants (e.g. biogas plants),
solar panels in rural households, for waste recycling plants in locations populated by
urban poor, and for Effluent Treatment Plants (ETPs) in manufacturing establishments.
 Green-Banking is the best solution for the betterment for the environment.
 Credit programs for diversified production of crops, oilseeds, spices, vegetables, fruits
etc. by rural households, financing the growers directly or through suitable intermediaries
in the value chain. Credit support for combinations of farming activities (like co-
production of a minor crop with a major one, fish/duck farming with Aman rice of
deepwater variety in low lying fields), may also be well worthwhile;
 Mobile phone based/ local MFI outlet supported programs promptly delivering
remittances from migrant workers to recipients in remote rural households; programs for
card based/ mobile phone based delivery of financial services to such households;
55 | P a g e
 Financing programs supporting folk crafts, folk musical and performing arts, aimed at
promoting domestic tourism and markets in cultural products/events besides income and
employment for the population groups involved. With the employment and new income
generated by successfully executed programs, the targeted population segments can
eventually constitute big new client bases for financial products and services.
 Incorporating environmentally responsible practices within the organization;
 Engaging with borrowers in scrutiny of the environmental and social impacts of their
proposed
 Reaching out with financial services to the less well off population segments of the
community (with own initiatives along lines indicated at paragraph 1.2 above); and
 Community investments by way of donations to initiatives of Civil Society Organizations

(CSOs), NGOs and institutions involved in health, education and culture; for social and
environmental improvement including nutrition, health and education in the
disadvantaged population segments (most banks and financial institutions in Bangladesh
already have significant outlays of such charitable expenditures, these can fit in
appropriately as elements in the new structured CSR programs).
56 | P a g e
57 | P a g e
References
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National Corporations in Bangladesh: A Case study on Grameenphone”, Journal of Patuakhali
Science and Technology University, Vol. 02, no. 01, June, Pp. 51-61
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listed companies in Bangladesh”, Journal of Asia-Pacific Business, vol. 10, no. 2, pp. 130-145
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UK financial service sector”, unpublished dissertation, Pp.1-94
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A Study of the Financial Sector” International Review of Business Research Papers, Vol. 7.
No.2. March, Pp.37-55
Bala S.K and Bhowmik R.K (2010), Statutory Amendments to the Income Tax Laws to effect
the fiscal changes proposed through the national budget 2010-2011: A review, The Cost &
Management, Vol. xxxviii, no. 4, July-August, Pp. 5-14
Belal, A. R 2001, “A study of corporate social disclosures in Bangladesh‟, Managerial Auditing

Journal, vol. 16, Pp. 274-289.
Belal, A. R., and Owen, D. (2007), “The Views of Corporate Managers on the Current State of
and Future Prospects for, Social Reporting in Bangladesh: An Engagement Based Study”,
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Byron Keating, Ziaur Rahman and Ali Quazi (2008), “A Developing Country Perspective of
Corporate Social Responsibility: A Test Case of Bangladesh”
Bhattacharya, C. B. and Sen, S. (2004), “Doing Better at Doing Good: When, Why, and How
Consumers Respond to Corporate Social Initiatives”, California Management Review, Vol. 47
No.1, Pp. 9-25.
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296
Imam S (2000), “Corporate social performance reporting in Bangladesh”, Managerial Auditing

Journal, vol. 15, pp. 133-141
58 | P a g e
Jamali D and Mishak R. (2007), “Corporate social responsibility (CSR): Theory and practice in
adeveloping country context” Journal of Business Ethics, vol. 72, Pp. 362.
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Kabirsarticles- on-Corporate-Social-Responsibility-in-Bangladesh>
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Banking Companies in Bangladesh”, Social Responsibility Journal, Vol.5 No.3, Pp.344-357.
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QUESTIONNAIRE FOR SURVEY ON CORPORATE SOCIAL RESPONSIBILITY IN BANGLADESH
WITH SPECIAL REFERENCE TO COMMERCIAL BANKS
PART
A______________________________________________________________
General Information
1. Name, Contacts and other information
a .Name of the bank:

______________________________________________________________________________
___
b. Contact Person and

Position:________________________________________________________
c Alternative Contact Person and Position

:_______________________________________________
D.Physical
Address:__________________________PostalAddress:___________________________
Tel: __________________________________
Fax:_______________________________________
E-
mail:________________________________Website:__________________________________
__
61 | P a g e
e. Date of Commencement of
Operation:_________________________________________________
2 Shareholding Structures of the Bank as at 31st December 2011 and 2012.
Table 1.2: Shareholding Structure as at 31st December 2010 and 2011
Name of Nationality Country of Ownership Stake (% Shareholding)as at:

Shareholder* Residence
31-12-2011 31-12-2012
62 | P a g e
Part-B_____________________________________________________________
About Corporate Social Responsibility (CSR)

1. What do you mean by Corporate Social Responsibility?
______________________________________________________________________________
______________________________________________________________________________
______
______________________________________________________________________________
______________________________________________________________________________
______
2. Give arguments for and against corporate social responsibility.
______________________________________________________________________________
______________________________________________________________________________
______
______________________________________________________________________________
______________________________________________________________________________
______
3. Approximate Annual Profit (Loss) of your Organization:
______________________________________________________________________________
______________________________________________________________________________
______
4. a. In the last five years, was your bank involved in any social or development programmes?
(e.g. Sponsorships, Charitable Contributions, Community Programmes/Projects, Environmental

Beautification / Preservation)
 Yes (If yes, proceed to Q 5.)

 No
63 | P a g e
b. If No, state reasons why and thank you for your participation.
______________________________________________________________________________
______________________________________________________________________________
______
5. a Do you have an annual allocation for these social / development programmes?
 Yes
 No
b. How are these programmes classified from a budgetary perspective within your bank?
______________________________________________________________________________
______________________________________________________________________________
______
6. What are the objectives of these activities?
______________________________________________________________________________
______________________________________________________________________________
______
7. What were the geographical areas and their respective activities covered over the last 5
years?
Division Area/Community Type of Activity
64 | P a g e
8. Identify these activities:
CSR activities CSR expenditure(Annual)

 Environment
 Arts & Culture
 Sports
 Health
 Education
 Humanitarian
 Disaster relief
 Others
9. a. Has the bank ever conducted any assessments of the health and safety effects of financing
and services on the wellbeing of customers?
 Yes
 No
10. In the current economic downturn, what is your commitment to CSR? Do you plan to focus
more or less on CSR activities?
______________________________________________________________________________
______________________________________________________________________________
______
11. In the future, will the bank pursue the same activities/geographical areas? If not, what will
be the major changes?
______________________________________________________________________________
______________________________________________________________________________
______
(Thank you for taking the time to complete our questionnaire. Your input is important to us
and we value your comments and contribution.)
65 | P a g e

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A DISSERTATION

CENTER FOR POST GRADUATE STUDIES (CPGS)

MD. MAMUNUR RASID

MASTERS IN BANK MANAGEMENT

BANGLADESH INSTITUTE OF BANK MANAGEMENT

DATE OF SUBMISSION: DECEMBER 31, 2012

Center for Post Graduate Studies

Bangladesh Institute of Bank Management

Mirpur – 2, Dhaka – 1216

Subject: Submission of Dissertation on “Corporate Social Responsibility practices of

This is my pleasure to submit my dissertation on “CSR practices of private commercial banks in

Md. Mamunur Rasid

Md. Mamumnur Rasid

Chapter Content Page

1.4 Limitation of the Report 03

CHAPTER 2 : Literatures Review 04-13

2.1 Historical definitions of CSR 05

CHAPTER 3: Regulatory Framework for Corporate Social Responsibility 14-16

3.1 Regulatory Framework for CSR areas in Bangladesh 14

3.2 CSR and Constituents 15

3.3 Corporate Social responsibility and stakeholders‟ concern within 16

CHAPTER 4: Corporate Governance and Corporate Social Responsibility 17-19

CHAPTER 5: Trend analysis of CSR of commercial banks in Bangladesh 20-37

5.1 Comparative Analysis 20

5.2 CSR practices in banks: an analytical review 25

5.3 Trends of sectoral pattern of direct CSR expenditure 27

5.6 CSR engagement through donations to CSOs, NGOs 34

5.7 Direct CSR expenditures reported by banks 35

5.8 CSR expenditures as % of after tax profit & CSR expenditures in 36

CHAPTER 6: Conclusion and Recommendations 38-40

CHAPTER 7: References 41-42

Table No. Name of the Table Page No.

01. Major CSR activities of Sample banks at a glance 20

02. Compliance with regulatory framework of five banks 20

03. Trends of Sectoral pattern of CSR expenditure reported by 27

07 Direct CSR expenditures reported by banks 35

08 CSR expenditures as % of after tax profit & CSR expenditures 36

Figure No. Name of the Figure Page No.

01 Total Contribution of CSR of five banks 21

04 Contribution to Art and Culture 23

06 Contribution to Natural Disaster 24

07 Profit and CSR expense relationship of five banks 24

08 Total CSR Expenditure (2008-2011) 27

09 Sectoral shares of CSR Expenditure 28

10 Major Financial inclusion programs Undertaken by Banks 30

11 Outstanding SME Credit 31

12 Outstanding Agricultural Credit 32

BB= Bangladesh bank

1.2 Objectives of the study

 To gather the knowledge about CSR activities of private CBs of Bangladesh.

1.3 Methodology & Sampling

2.1 Historical definitions of CSR

The utilitarian perspective (an instrument to help achieve performance objectives);

2.2 Corporate Social Responsibility in the 21st Century

Corporate social responsibility (CSR) is:

There are four dimensions of corporate social responsibility

Definition source Definition Dimensions

(1) Donation to organizations engaged in clean water management

3.2 CSR and its Constituents:

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

3.3 Corporate Social responsibility and stakeholders’ concern within banking

 Distribution of duties and responsibilities among different supervisory, regulatory and

Table 01: Major CSR activities of Sample banks at a glance