Corporate Social Responsibility of Banking Institutions

1.1. Background of the Report:

Corporate Social Responsibility stands for business contribution to sustainable development and covers companies’ active participation in different fields: human rights, human resources, relations with clients, suppliers, and other stakeholders, corporate governance, environment and contribution to community and society. The purpose of this report is to see what are the banks in Bangladesh doing in respect of CSR practice and how much are they spending on it.

1.2. Origin of the Report:Today practical experience is as much essential as academic education that enables someone to be successful business executive especially in the glove, competitive business environment. In order to gather knowledge and experience regarding the organization culture and behavior, the business students have to submit thesis report for the successful completion of their bachelor degree. Stamford University Bangladesh is known for the global standard education. This thesis report of mine title “Corporate Social Responsibility of Banking Institutions in Bangladesh” is a process of gathering knowledge regarding the CSR related activities by banks.

1.3. Objective of the Study:The general objective of this report is to complete the degree. As per requirement of MBA program of Stamford University Bangladesh, one student needs to work on the report to acquire knowledge about the real competitive environment. There are some specific objectives of this report these are:

1. To become familiar with CSR2. To observe existing practice of CSR by banks3. To know about other activities related to social welfare carried out by banks4. To find the possible information sources.

1.4. MethodologyIn the ensuring proper management of the business processes to produce an overall positive impact on society, CSR is very important issue. In order to study this issue, collections of data were made from the secondary sources as published materials from like Dhaka Stock Exchange (DSE). Internet and few books related to the CSR were also very much used for collecting information on CSR. Annual reports of 2010 following banks are taken in this report:

1. AB Bank Ltd2. Bank Asia Ltd.3. .BRAC Bank Ltd4. Janata Bank5. .Dutch- Bangla Bank Ltd.6. Eastern Bank Limited

7. .Exim Bank Ltd.8. .Islami Bank Bangladesh Ltd9. National Bank Ltd 10. One Bank Ltd. 11. Southeast Bank Ltd12. United Commercial Bank Ltd.13. Social Investment Bank Ltd.14. Agrani Bank Ltd. 15. Standard Charted Bank Ltd.

Chapter: 2

History of Bnaking Industry in Bangladesh

2.1. Definition of Bank:A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lends money to those who need it.

2.2. Characteristics / Features of a Bank:

1. Dealing in Money:

Bank is a financial institution which deals with other people's money i.e. money given by depositors.

2. Individual / Firm / Company:

A bank may be a person, firm or a company. A banking company means a company which is in the business of banking.

3. Acceptance of Deposit:

A bank accepts money from the people in the form of deposits which are usually repayable on demand or after the expiry of a fixed period. It gives safety to the deposits of its customers. It also acts as a custodian of funds of its customers.

4. Giving Advances:

A bank lends out money in the form of loans to those who require it for different purposes.

5. Payment and Withdrawal:

A bank provides easy payment and withdrawal facility to its customers in the form of cheques and drafts; it also brings bank money in circulation. This money is in the form of cheques, drafts, etc

6. Agency and Utility Services:

A bank provides various banking facilities to its customers. They include general utility services and agency services

7. Profit and Service Orientation

A bank is a profit seeking institution having service oriented approach.

8. Ever increasing Functions:

Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions, services and activities of a bank.

9. Connecting Link:

A bank acts as a connecting link between borrowers and lenders of money. Banks collect money from those who have surplus money and give the same to those who are in need of money.

10. Banking Business:

A bank's main activity should be to do business of banking which should not be subsidiary to any other business.

11. Name Identity:

A bank should always add the word "bank" to its name to enable people to know that it is a bank and that it is dealing in money.

2.3. Objective of banking sector:

The main objective of banks is to maintain higher profitability by maintaining circular and efficient flow of amount of money deposited by the customers and the lenders. Banks contribute to the economic cycle by keeping the money circulation among households, government and corporate businesses. The commercial banks lend money to the economic agents through their various products and services by earning interest income on the borrowed money. Commercial banks design their short term and long term loans and other products to cater to the need of customers while enhancing their own returns. Their objective is to attract more customers and build profitable relationships with the new and existing customers.

Another objective of a bank is to lower transaction costs, lower information costs, create liquidity, and to diversify people's money in a way they could not do on their own.

2.4. The role of Banks in economy:

Banks play an important and active role in the economic development of a country. If the banking system in a country is effective, efficient and disciplined it brings about a rapid growth in the various sectors of the economy. The following is the significance of commercial banks in the economic development of a country:

1. Banks promote capital formation:

Commercial banks accept deposits from individuals and businesses, these deposits are then made available to the businesses which make use of them for productive purposes in the country.

The banks are, therefore, not only the store houses of the country’s wealth, but also provide financial resources necessary for economic development.

2. Investment in new enterprises:

Businessmen normally hesitate to invest their money in risky enterprises. The commercial banks generally provide short and medium term loans to entrepreneurs to invest in new enterprises and adopt new methods of production.

The provision of timely credit increases the productive capacity of the economy.

3. Promotion of trade and industry:

With the growth of commercial banking, there is vast expansion in trade and industry. The use of bank draft, check, bill of exchange, credit cards and letters of credit etc has

revolutionized both national and international trade.

4. Development of agriculture:

The commercial banks particularly in developing countries are now providing credit for development of agriculture and small scale industries in rural areas.

The provision of credit to agriculture sector has greatly helped in raising agriculture productivity and income of the farmers.

5. Balanced development of different regions:

The commercial banks play an important role in achieving balanced development in different regions of the country.

They help in transferring surplus capital from developed regions to the less developed regions.

The traders, industrialists etc of less developed regions are able to get adequate capital for meeting their business needs.

6. Influencing economic activity:

The banks can also influence the economic activity of the country through its influence on

o Availability of credit.o The rate of interest.

If the commercial banks are able to increase the amount of money in circulation through credit creation or by lowering the rate of interest, it directly affects economic development.

A low rate of interest can encourage investment.

The credit creation activity can raise aggregate demand which leads to more production in the economy.

7. Implementation of Monetary policy:

The central bank of the country controls and regulates volume of credit through the active cooperation of the banking system in the country.

It helps in bringing price stability and promotes economic growth with in the shortest possible period of time.

8. Monetization of the economy:

The commercial banks by opening branches in the rural and backward areas are reducing the exchange of goods through barter.

The use of money has greatly increased the volume of production of goods. The non monetized sector (barter economy) is now being converted into monetized

sector with the help of commercial banks.

9. Export promotion cells:

In order to increase the exports of the country, the commercial banks have established export promotion cells.

They provide information about general trade and economic conditions both inside and outside the country to its customers.

The banks are therefore, making positive contribution in the process of economic development.

2.5 . Evolut ion of bank:

The banking system at independence consisted of two branch offices of the former State Bank of Pakistan and seventeen large commercial banks, two of which were controlled by Bangladeshi interests and three by foreigners other than West Pakistanis. There were fourteen smaller commercial banks. Virtually all banking services were concentrated in urban areas. The newly independent government immediately designated the Dhaka branch of the State Bank of Pakistan as the central bank and renamed it the Bangladesh Bank. The bank was responsible for regulating currency, controlling credit and monetary policy, and administering exchange control and the official foreign exchange reserves. The Bangladesh government initially nationalized the entire domestic banking system and proceeded to reorganize and rename the various banks. Foreign-owned banks were permitted to continue doing business in Bangladesh. The insurance business was also nationalized and became a source of potential investment funds. Cooperative credit systems and postal savings offices handled service to small individual and rural accounts. The new banking system succeeded in establishing reasonably efficient procedures for managing credit and foreign exchange. The primary function of the credit system throughout the 1970s was to finance trade and the public sector, which together absorbed 75 percent of total advances.

The government's encouragement during the late 1970s and early 1980s of agricultural development and private industry brought changes in lending strategies. Managed by the Bangladesh Krishi Bank, a specialized agricultural banking institution, lending to farmers and fishermen dramatically expanded. The number of rural bank branches doubled between 1977

and 1985, to more than 3,330. Denationalization and private industrial growth led the Bangladesh Bank and the World Bank to focus their lending on the emerging private manufacturing sector. Scheduled bank advances to private agriculture, as a percentage of sectoral GDP, rose from 2 percent in FY 1979 to 11 percent in FY 1987, while advances to private manufacturing rose from 13 percent to 53 percent.

The transformation of finance priorities has brought with it problems in administration. No sound project-appraisal system was in place to identify viable borrowers and projects. Lending institutions did not have adequate autonomy to choose borrowers and projects and were often instructed by the political authorities. In addition, the incentive system for the banks stressed disbursements rather than recoveries, and the accounting and debt collection systems were inadequate to deal with the problems of loan recovery. It became more common for borrowers to default on loans than to repay them; the lending system was simply disbursing grant assistance to private individuals who qualified for loans more for political than for economic reasons. The rate of recovery on agricultural loans was only 27 percent in FY 1986, and the rate on industrial loans was even worse. As a result of this poor showing, major donors applied pressure to induce the government and banks to take firmer action to strengthen internal bank management and credit discipline. As a consequence, recovery rates began to improve in 1987. The National Commission on Money, Credit, and Banking recommended broad structural changes in Bangladesh's system of financial intermediation early in 1987, many of which were built into a three-year compensatory financing facility signed by Bangladesh with the IMF in February 1987.

Beginning in late 1985, the government pursued a tight monetary policy aimed at limiting the growth of domestic private credit and government borrowing from the banking system. The policy was largely successful in reducing the growth of the money supply and total domestic credit. Net credit to the government actually declined in FY 1986. The problem of credit recovery remained a threat to monetary stability, responsible for serious resource misallocation and harsh inequities. Although the government had begun effective measures to improve financial discipline, the draconian contraction of credit availability contained the risk of inadvertently discouraging new economic activity.

Foreign exchange reserves at the end of FY 1986 were US$476 million, equivalent to slightly more than 2 months worth of imports. This represented a 20-percent increase of reserves over the previous year, largely the result of higher remittances by Bangladeshi workers abroad. The country also reduced imports by about 10 percent to US$2.4 billion. Because of Bangladesh's status as a least developed country receiving confessional loans, private creditors accounted for only about 6 percent of outstanding public debt. The external public debt was US$6.4 billion, and annual debt service payments were US$467 million at the end of FY 1986.

2.6. Money and Banking-Currency Fluctuation

At independence the value of the taka, Bangladesh's unit of currency, was set between 7.5 and 8.0 to US$1. With the exception of FY 1978, the taka's value relative to the dollar declined every year from 1971 through the end of 1987. To help offset this phenomenon, Bangladesh first used the compensatory financing facility of the International Monetary Fund (IMF--see Glossary) in FY 1974. Despite the increasing need for assistance, the Mujib government was initially unwilling to meet the IMF's conditions on monetary and fiscal policy. By FY1975, however, the government revised its stance; declaring a devaluation of

the taka by 56 percent and agreeing to the establishment by the World Bank of the Bangladesh Aid Group (see Foreign Assistance, this ch.). Between 1980 and 1983, the taka sustained a decline of some 50 percent because of deterioration in Bangladesh's balance of payments. Between 1985 and 1987, the taka was adjusted in frequent incremental steps, stabilizing again around 12 percent lower in real terms against the United States dollar, but at the same time narrowing the difference between the official rate and the preferential secondary rate from 15 percent to 7.5 percent. Accompanying this structural adjustment was an expansion in the amount of trade conducted at the secondary rate, to 53 percent of total exports and 28 percent of total imports. In mid- 1987, the official rate was relatively stable, approaching Tk31 to US$1.

2.7. The Functions of Banking:

The most important functions of banking may be classified as follows:

(1) To assemble capital and make it effective.(2) To receive deposits and make collections.(3) To check out and transfer funds. (4) To discount or lend.(5) To exercise fiduciary or trust powers.(6) To issue circulating notes.(7) To be succeeded bank must first of all prove its value to the community.(8) The services which a bank performs are so generally taken for granted that the public is unaware of the real extent of the facilities offered.(9)Banks are equipped to utilize funds, for either a short or long period of time, safely, and with some profit. (10)By receiving deposits and making collections the bank saves the depositor much personal effort.(11) To convert check in a relatively short time into cash available for the depositor's use, and all this with no direct assistance from the customer and at a very slight expense to him or none at all, is indeed service. (12) It is the willingness of the bank to collect promissory notes, drafts and other negotiable paper in a similar way.(13)In addition to taking care of funds without charge and making collections, the bank provides the means of withdrawing and transferring funds readily by giving its customer a book of blank checks.(14)By lending money the bank benefits the community to the extent that it supplies funds to assist worthy business. Temporary working capital to assist in the commercial, agricultural or industrial life of a community is very important.

2.8. Numbers and Types of Banks in Bangladesh:

The number of banks in all now stands at 49 in Bangladesh. Out of the 49 banks, four are Nationalized Commercial Banks (NCBs), 30 local private commercial banks, 09 foreign banks and the rest five are Development Financial Institutions (DFIs). Sonali Bank is the largest among the NCBs while Pubali is leading in the private ones. Among the 12 foreign banks, Standard Chartered has become the largest in the country. Besides the scheduled banks, Samabai (Cooperative) Bank, Ansar-VDP Bank, Karmasansthan (Employment) Bank and Grameen bank are functioning in the financial sector. The number of total branches of all

scheduled banks is 6,038 as of June 2000. Of the branches, 39.95 per cent (2,412) are located in the urban areas and 60.05 per cent (3,626) in the rural areas. Of the branches NCBs hold 3,616, private commercial banks 1,214, foreign banks 31 and specialized banks 1,177. Bangladesh Bank (BB) regulates and supervises the activities of all banks. The BB is now carrying out a reform program to ensure quality services by the banks.

Bangladesh Bank:

Bangladesh Bank (BB) has been working as the central bank since the country's independence. Its prime jobs include issuing of currency, maintaining foreign exchange reserve and providing transaction facilities of all public monetary matters. BB is also responsible for planning the government's monetary policy and implementing it thereby.The BB has a governing body comprising of nine members with the Governor as its chief. Apart from the head office in Dhaka, it has nine more branches, of which two in Dhaka and one each in Chittagong, Rajshahi, Khulna, Bogra, Sylhet, Rangpur and Barisal.

List of Bank:

Central Bank: Bangladesh Bank.

Pursuant to Bangladesh Bank Order, 1972 the Government of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central bank of the country, and named it Bangladesh Bank with retrospective effect from 16 December 1971.

Commercial Bank (State owned):

The banking system of Bangladesh is dominated by the 4 Nationalized Commercial Banks, which together controlled more than 54% of deposits and operated 3388 branches (54% of the total) as of December 31, 2004. The nationalized commercial banks are:

1. Sonali Bank.

2. Agrani Bank.

3. Rupali Bank.

4. Janata Bank.

Commercial Bank (Private): Private Bank are the highest growth sector due to the dismal performances of government banks (above). They tend to offer better service and products.

1. Mutual Trust Bank Limited .2. BRAC Bank Limited .3. Eastern Bank Limited .4. Dutch Bangla Bank Limited .5. Dhaka Bank Limited .6. Islami Bank Bangladesh Ltd .7. Pubali Bank Limited .8. Uttara Bank Limited 9. IFIC Bank Limited 10. National Bank Limited 11. The City Bank Limited 12. United Commercial Bank Limited 13. NCC Bank Limited 14. Prime Bank Limited 15. South East Bank Ltd.

16. Al-Arafah Islami Bank Limited 17. Social Islami Bank Limited 18. Standard Bank Limited 19. One Bank Limited 20. Exim Bank Limited 21. Mercantile Bank Limited 22. Bangladesh Commerce Bank Limited 23. First Security Islami Bank Limited 24. The Premier Bank Limited 25. Bank Asia Limited 26. Trust Bank Limited 27. Shahjalal Islami Bank Limited 28. Jamuna Bank Limited 29. ICB Islami Bank 30. AB Bank Limited

Commercial Bank (Foreign):

1. Citibank 2. HSBC

3. Standard Chartered Bank 4. Commercial Bank of Ceylon

5. State Bank of India 6. Habib Bank .7. National Bank of Pakistan

8. Woori Bank 9. Bank Alfalah .

Specialized Development Banks:

1. Bangladesh Krishi Bank 2. Rajshahi Krishi Unnayan Bank 3. Progoti Co-operative

Landmortgage Bank Limited (Progoti BanK) www.progotibank.com.bd

4. Grameen Bank 5. The Dhaka Mercantile Co-

operative Bank Limited (DMCBL)

6. Bangladesh Development Bank Ltd 7. Bangladesh Somobay Bank

Limited(Cooperative Bank)8. Ansar VDP Unnyan Bank 9. BASIC Bank Limited (Bangladesh

Small Industries and Commerce Bank Limited

2.9. Name of listed bank under SEC:

1. ABBANK( AB Bank Limited )2. ALARABANK( Al-Arafah Islami

Bank )3. BANKASIA (Bank Asia Ltd.)4. BRACBANK (BRAC Bank Ltd.)5. CITYBANK( City Bank )6. DHAKABANK( Dhaka Bank )7. DUTCHBANGL( Dutch-Bangla

Bank )8. EBL( Eastern Bank )9. EXIMBANK( Export Import

(Exim) Bank of Bangladesh )10. FIRSTSBANK( First Security

Islami Bank Limited )11. ICBIBANK( ICB Islamic Bank

Limited )12. IFIC( IFIC Bank )13. ISLAMIBANK( Islami Bank )14. JAMUNABANK (Jamuna Bank

Ltd.)15. MERCANBANK (Mercantile

Bank Ltd.)

16. MTBL (Mutual Trust Bank Ltd.)17. NBL( NBL )18. NCCBANK( NCCBL )19. ONEBANKLTD( One Bank

Limited )20. PREMIERBAN (The Premier

Bank Ltd.)21. PRIMEBANK( Prime Bank )22. PUBALIBANK( Pubali Bank )23. RUPALIBANK( Rupali Bank )24. SHAHJABANK (Shahjalal Islami

Bank Ltd.)25. SIBL( Social Islami Bank

Limited )26. SOUTHEASTB( Southeast Bank )27. STANDBANKL( Standard Bank

Limited )28. TRUSTBANK( Trust Bank

Limited )29. UCBL (United Commercial Bank

Ltd.)30. UTTARABANK( Uttara Bank )

2.10. Name of listed registered bank under Bangladesh Bank:

2.11. Services of Bank in Bangladesh:

Accounts, Current, FDR, PDS, Deposit Scheme:Current Account: Generally this sort of account opens for business purpose. Customers can withdraw money once or more against their deposit. No interest can be paid to the customers in this account. If the amount of deposit is below taka 1,000 on an average the

Organization Web LinkAB Bank Limited http://www.abbank.com.bd

Agrani Bank Limited http://www.agranibank.orgAl-Arafah Islami Bank Limited http://www.al-arafahbank.com/

Bangladesh Commerce Bank Limited http://www.bcbl-bd.comBangladesh Development Bank Limited http://www.bdbl.com.bd

Bangladesh Krishi Bank http://www.krishibank.org.bdBank Al-Falah Limited http://www.bankalfalah.com

Bank Asia Limited http://www.bankasia-bd.comBASIC Bank Limited http://www.basicbanklimited.comBRAC Bank Limited http://www.bracbank.com

Citibank N.A http://www.citi.com/domain/index.htmCommercial Bank of Ceylon Limited http://www.combankbd.com

Dhaka Bank Limited http://www.dhakabank.com.bdDutch-Bangla Bank Limited http://www.dutchbanglabank.com

Eastern Bank Limited http://www.ebl-bd.comEXIM Bank Limited http://www.eximbankbd.com

First Security Islami Bank Limited http://www.fsblbd.comHabib Bank Ltd. http://www.habibbankltd.com

ICB Islamic Bank Ltd. http://www.icbislamic-bd.com/IFIC Bank Limited http://www.ificbankbd.com

Islami Bank Bangladesh Ltd http://www.islamibankbd.comJamuna Bank Ltd http://www.jamunabankbd.com

Janata Bank Limited http://www.janatabank-bd.comMercantile Bank Limited http://www.mblbd.com

Mutual Trust Bank Limited http://www.mutualtrustbank.comNational Bank Limited http://www.nblbd.com

National Bank of Pakistan http://www.nbp.com.pkNational Credit & Commerce Bank Ltd http://www.nccbank.com.bd

One Bank Limited http://www.onebankbd.comPremier Bank Limited http://www.premierbankltd.com

Prime Bank Ltd http://www.prime-bank.comPubali Bank Limited http://www.pubalibangla.com

Rajshahi Krishi Unnayan Bank http://www.rakub.org.bdRupali Bank Limited http://www.rupali-bank.com

Shahjalal Bank Limited http://www.shahjalalbank.com.bd

bank has authority to cut taka 50 from each account as incidental charge after every six months. Against this account loan facility can be ensured. Usually one can open this account with taka 500. One can open this sort of account through cash or check/bill. All the banks follow almost the same rules for opening current account.

Savings Bank Account:Usually customers open this sort of account at a low interest for only security. This is also an initiative to create people's savings tendency. Generally, this account is to be opened at taka 100. Interest is to be paid in June and December after every six months. If money is withdrawn twice a week or more than taka 10,000 is withdrawn (if 25% more compared to total deposit) then interest is not paid. This account guarantees loan. Almost all the banks follow the same rules in the field of savings account, except foreign banks for varying deposit. On an average, all the banks give around six percent interest.

Special ServicesSome Banks render special services to the customers attracting other banks.

o Internet BankingCustomers need an Internet access service. As an Internet Banking customer, he will be given a specific user ID and a confident password. The customer can then view his account balances online. It is the industry-standard method that used to protect communications over the Internet. To ensure that customers' personal data cannot be accessed by anyone but them, all reporting information has been secured using Version and Secure Sockets Layer (SSL).

o Home Banking Home banking frees customers of visiting branches and most transactions will be automated to enable them to check their account activities transfer fund and to open L/C sitting in their own desk with the help of a PC and a telephone.

o Electronic Banking Services for Windows (EBSW)Electronic Banking Service for Windows (EBSW) provides a full range of reporting capabilities, and a comprehensive range of transaction initiation options. The customers will be able to process all payments as well as initiate L/Cs and amendments, through EBSW. They will be able to view the balances of all accounts, whether with Standard Chartered or with any other banks using SWIFT. Additionally, transactions may be approved by remote authorization even if the approver is out of station.

o Automated Teller Machine (ATM)Automated Teller Machine (ATM), a new concept in modern banking, has already been introduced to facilitate subscribers 24 hour cash access through a plastic card. The network of ATM installations will be adequately extended to enable customers to non-branch banking beyond banking.

o Tele Banking Tele Banking allows customers to get access into their respective banking information 24 hours a day. Subscribers can update themselves by making a phone call. They can transfer any amount of deposit to other accounts irrespective of location either from home or office.

o SWIFT (Society for Worldwide Interbank Financial Telecommunication)

SWIFT is a bank owned non-profit co-operative based in Belgium servicing the financial community worldwide. It ensures secure messaging having a global reach of 6,495 Banks and Financial Institutions in 178 countries, 24 hours a day. SWIFT global network carries an average 4 million message daily and estimated average value of payment messages is USD 2 trillion. SWIFT is a highly secured messaging network enables Banks to send and receive Fund Transfer, L/C related and other free format messages to and from any banks active in the network. Having SWIFT facility, Bank will be able to serve its customers more profitable by providing L/C, Payment and other messages efficiently and with utmost security. Especially it will be of great help for our clients dealing with Imports, Exports and Remittances etc.

Chapter: 3

Corporate Social Responsibilities

3.1. Corporate Social Responsibility:

Definition of CSR:One of the most frequently asked questions at this era - and probably for all those individuals and organizations dealing with CSR issues is the obvious - just what does "Corporate Social Responsibility" mean anyway? Is it a stalking horse for an anti-corporate agenda? Something which, like original sin, you can never escape or what? Different organizations have framed different definitions - although there is considerable common ground between them. My own definition is that CSR is about how companies manage the business processes to produce an overall positive impact on society.Take the following illustration:

Conceptualization of CSR:

The World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts used the following definition. "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large"The same report gave some evidence of the different perceptions of what this should mean from a number of different societies across the world.

Definitions,"CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and the government" from Ghana, through to "CSR is about business giving back to society" from the Philippines.

Traditionally in the United States, CSR has been defined much more in terms of a philanthropic model. Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit from the giving.

The European model is much more focused on operating the core business in a socially responsible way, complemented by investment in communities for solid business case reasons. Personally, I believe this model is more sustainable because:

Social responsibility becomes an integral part of the wealth creation process - which if managed properly should enhance the competitiveness of business and maximize the value of wealth creation to society. When times get hard, there is the incentive to practice CSR more and better - if it is a philanthropic exercise which is peripheral to the main business, it will always be the first thing to go when push comes to shove. But as with any process based on the collective activities of communities of human beings (as companies are) there is no "one size fits all". In different countries, there will be different priorities, and values that will shape how business act. And even the observations above are changing over time. The US has growing numbers of people looking towards core business issues. For instance, the CSR definition used by Business for Social Responsibility is: "Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business? On the other hand, the European Commission hedges its bets with two definitions wrapped into one: "A concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis".

3.2. Highlights of recent engagements of banks in CSR practices:

Out of forty eight scheduled banks in Bangladesh, forty six had engagement in CSR practices in some form or other in 2009.

In terms of direct monetary expenditure, engagements of banks in CSR initiatives are increasing, particularly following issuance of BB guidance:

Year 2008 2009 2010

CSR expenditure (Million Taka)

226.4 410.7 553.8

Table 1: Highlights of recent engagements of banks in CSR practices.

Chart 1: Highlights of recent engagements of banks in CSR practices.

CSR expenditure s of banks has thus far largely been in the form of passive grantsand donations. Banks were particularly responsive to emergency support needs of population group’s affected in natural and manmade disasters.

Apart from one of grants and giveaways, some banks have engagements in longer term continuing support commitments, in areas of education and healthcare.

Besides the passive engagements by way of grants/donations (Table 1, Section B, page 2), banks are now getting actively engaged in socially responsible business operations, by way of increased lending to under-served economic sectors like agriculture and SMEs, towards fuller financial inclusion and faster poverty eradication.

Banks are yet to adopt practices of prior stakeholder consultations (an important element indicated in BB’s guidance circular) in drawing up their CSR programs.

Some banks have reported embracing commitment for environmental sustainability in own and client businesses. Their actions have not however gone beyond compliance relevant government laws and regulations. Proactive initiatives of helping arrest environmental degradation, like adoption of more energy efficient, and harmful emission/effluence reducing internal practices and processes have been largely absent the CSR initiatives, even of branches of foreign banks with such practices in their home offices.

Banks are yet to adopt separate reporting of their CSR activities in comprehensive formats such as the GRI.

3.3. CSR practices in banks: an analytical review:

CSR expenditures by banks:

The banking sector of Bangladesh has a long history of involvement in benevolent activities like donations to different charitable organizations, to poor people and religious institutions, city beautification and patronizing art & culture, etc. Recent trends of these engagement indicates that banks are gradually organizing these involvements in more structured CSR initiative format, in line with BB Guidance in DOS circular no. 01 of 2008.

The June 2008 BB Guidance circular suggested that banks could begin reporting their CSR initiatives in a modest way as supplements to usual annual financial reports, eventually to develop into full blown comprehensive reports in GRI format.

Information on CSR expenditure available from annual reports of banks, compiled together, bring up the following picture of sectoral patterns:

Table 2: Sectoral pattern of CSR reported by banks.

In the year 2007, large concentration in the field of disaster relief, both in participation and expenditure wise, was observed mainly because of the cyclone ‘Sidr’. Whereas, in the year 2009, the ‘Education’ and ‘Health’ sectors were getting more attention and appeared to be the most popular area for CSR activities as huge investments are being made by several banks in these segments. These shifts point to the responsiveness of the banking community to the changing need of the society.

Following are some notable features observed from the CSR activities carried out by the banks:

In a natural calamity-prone area like Bangladesh, there remains an existing and distinctive CSR agenda focused on the business contribution to tackling social crises in the affected area.

Disaster relief and rehabilitation became the segment where the highest number of banks participated to help ease the sufferings of the affected people. In the current context, a desired move from the traditionally popular fields of education or health.

In the education segment, more and more banks have taken long-term or renewable scholarship programs for under-privileged but meritorious students for the persuasion of their studies instead of providing one time recognition awards to good performers.

Some banks choose to provide continued financial support for maintaining operating costs of health care organizations. A bank undertook a continuous program called ‘Smile Brighter Program’ to perform as many operations possible per year on cleft-lipped boys and girls to bring back smile on their face.

Several banks have taken steps and introduced investment schemes to cater the needs of self employment and poverty alleviation under which micro-finance is channeled to the target groups, such as poor farmers, landless peasants, women entrepreneurs, rootless slum people, handicapped people, etc.

Chart 2: Segment wise CSR Investment.

A few banks have taken steps to introduce Interest-free Education Loan to poor and meritorious students to help bear monthly educational expenditure including food, accommodation etc. The loan is distributed to the selected students in monthly installments till their completion of studies up to the Masters Degree level.

A good number of banks have created separate Foundation/Trusts as non-profitable, nongovernmental organization, solely devoted to the cause of charity, social welfare and other benevolent activities towards the promotion CSR objectives. These banks are providing a certain percentage of the pre-tax profit/net profit each year towards its CSR activities.

Institutionalizing CSR at corporate level:

The BB guidance circular suggested embracing of CSR with decisions taken at the highest corporate level (board of directors of the bank), and to choose action programs and performance targets a consultative processes involving the internal and external stakeholders concerned. As seen in the following table, 12 PCBs and 3 FCBs reported to have embraced CSR with decision at the highest corporate level, none of the SCBs and DFIs reported to have done anything in this regard. A total of 16 out of 30 PCBs and 1 out of 9 FCBs have formed separate Foundations or Trusts as non-profitable, non-governmental organization, solely devoted to the cause of charity, social welfare and other benevolent activities towards the promotion CSR objectives. These banks have also resolved to provide a certain percentage of the pre-tax profit/net profit each year towards its CSR activities. However, none of the banks

reported to have adopted action programs and performance targets through consultative processes involving the internal and external stakeholders concerned as suggested in the guideline of June 1, 2008.

Table 3: Institutionalizing CSR at corporate level.

Ingraining CSR practices within the organization & client businesses:

Against the suggestion in the BB guidance circular for ingraining environmentally and socially responsible practices within the organization, only four banks (1 DFI and 3 PCBs) reported having taken steps for adoption of socially and environmentally responsible practices in their own internal operations. The DFI mentioned that they have taken actions towards providing a modern, healthy and safe workplace and creating an environment conducive to learning and development. Regarding reducing the environmental impact as a result of their operation and business activity, 1 DFI and 3 PCBs reported to have taken positive actions towards it.

Table 4: Ingraining CSR practices within the organization & client businesses.

As shown in the above table, 1 SCB, 2 DFIs and 8 PCBs have taken steps to foster CSR in their client businesses in various economic sectors, assessing the social and environmental impacts of the enterprises/projects seeking finance. These banks reported that they try to ensure compliance with environmental standards while financing industrial projects, and that they have formulated environment policies in accordance with guidelines issued by the Government, in terms of which the environmental impacts are considered at the time of conducting Credit and Lending Risks Analysis. Projects likely to have adverse impact on environment are strongly discouraged by them. Some banks have also introduced guidelines requiring assessment of environmental and social impacts of the projects to ensure that operations of the projects would be eco-friendly. It is understood that, banks in Bangladesh in general try to ensure that enterprises/projects seeking finance comply with the environmental and social requirements that are compulsorily mandated by laws and regulations. However, most of the banks did not report this in their annual reports.

Financial Inclusion:

The CSR guidelines issued by Bangladesh Bank put special emphasis on reaching out with financial services to the less well-o. Population segments of the community in order to speed up financial inclusion of the large socially disadvantaged rural and urban population segments; drawing them in with appropriate financial service packages and with financing programs innovatively designed to generate new employment, output and income.

4 SCBs, 3 DFIs, 28 PCBs and 3 FCBs were engaged in self-employment credit and Small and Medium Enterprise (SME) lending programs, taken up solo or in association with locally active Micro Finance Institutions (MFIs). These programs were mainly designed to create productive new on-farm/o.-farm employment. The banks also formally recognized their philanthropic obligation towards the promotion and development of small and medium industries sector.

1 DFI has financed programs for installation of biomass processing plants and for Effluent Treatment Plants (ETPs) in manufacturing establishments.

Chart 3: Major Financial Inclusion Programs.

In order to provide support to small landholder farmers of Bangladesh who play a crucial role in the development of the country, 4 SCBs, 3 DFIs, 25 PCBs and 3 FCBs have disbursed agricultural loans mainly through their rural branches 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, and have provided credit support for combinations of farming activities. Concurrently, credit lines are also extended to different NGOs to support the initiatives for agricultural development and alleviation of poverty in the rural areas.

Two banks reported taking up initiatives aimed at prompt delivery of remittances from migrant workers to recipients in remote rural households, or programs for card based/ mobile phone based delivery of financial services to such households.

Among bank financed self-employment & SME projects; dairy, fishery, poultry, goat rearing & cow fattening projects and financing of NGOs for enhancing the flow of micro-credit under NGO Linkage Loan were more prominent. Among the four classes of bank, DFIs were the most important participant in the SME sector. From chart 3 below it can be seen that, during the year 2008, the DFIs had the dominant share of SME credit outstanding during 2008 and 2009. Involvement of SCBs in SME lending does not show signs of stable upward trend. The engagement of PCBs however, has been in significant upward trend. Involvement of FCBs even though small in absolute size, is also showing signs of steady increase.

Chart 4: Outstanding SME loans of banks.

Chart 4 shows the trends of outstanding agricultural credit. Here again, the DFIs have dominant role, because of statutory obligation of two DFIs (BKB, RAKUB).

Chart 5: Disbursement of Agricultural Credit.

The volume of credit outstanding is no firm evidence of extent of financial l inclusion per se however, chart 5 plots the trend of number of small sized bank loan accounts, a plausible proxy for increase in number of agricultural and small enterprise loan accounts and hence for financial inclusion. Trend lines in the chart indicate that the positive results from the CSR and other current initiatives for broadening financial inclusion are yet to show up with prominence.

Chart 6: No. of bank loan accounts of size upto Taka 1 lac.

Social and environmental improvement:

The banks had significant 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. The following table shows participation of banks in various areas of community development:

Table 5: Community investment for social & environmental improvementIt was observed that, Education and Health were the more popular area of participation by the banks in community development. A total of 3 SCBs, 2 DFIs, 22 PCBs and 5 FCBs have made donations to various educational institutions for their cause. In the health sector, 1 SCB, 3 DFIs, 25 PCBs and 4 FCBs patronized a number of health care organizations by way of financial support to them. Disaster Relief also received due attention as 3 SCBs, 2 DFIs, 25

PCBs and 8 FCBs have provided donations to Relief and Rehabilitation Programs for the people affected in different natural calamities.

On the other hand, as shown in the following table, only 12 banks out of 30 PCBs and 3 banks out of 9 FCBs have conducted direct social interventions, both as sustainable/continuous projects or occasional/remedial measures. These banks actually tried to enrich economic and social indicators of the society by way of reducing poverty, giving standard health care service, proper nutrition, and ensuring environment friendly society for the present and future generation. However, none of the SCBs or DFIs conducted any direct social interventions. The following areas were covered by the banks that had direct social intervention programs:

Having considered education as a tool for social change, 8 PCBs and 1 FCB have chalked out programs with a view to remove the access barrier of some of many economic hardship-hit estimable students to their desired level of education by providing scholarship, fellowship, infrastructural development, etc.

Since a large number of poor people in our country are deprived of the opportunity to cure .their health problem, 4 PCBs and 2 FCBs have established permanent health projects to reduce their sufferings.

Table 6: Direct social & environmental interventions.

Bangladesh lies in a natural calamity-prone area where floods, cyclones and other natural calamities often occur. Some Banks have always been at the service of the people afflicted by the natural calamities. 5 PCBs and 1 FCB have taken direct steps to provide aid and rehabilitation program they considered necessary to the group of people affected in different natural disaster.

1 P CB and 1 FCB have some projects covering Art & culture aspects. 1 PCB and 1 FCB have environmental project to combat the devastating effects of

environmental changes for Green House affects due to Global warming.

3.4. Arguments against Corporate Social Responsibility:

If the arguments for a socially responsible approach were widely accepted, nobody would even use the label "CSR" because everyone would be doing it. Those of us who spend our time marshalling the case for would do well to spend a little time hearing the case against, and considering what should be the response. Of course, one of the challenges in considering cases "for" and "against" CSR is the wide variety of definitions of CSR that people use. We assume here we are talking about responsibility in how the company carries out its core function - not simply about companies giving money away to charity.Below are some of the key arguments most often used against CSR and some responses.

Businesses are owned by their shareholders - money spent on CSR by managers is theft of the rightful property of the owners

The leading companies who report on their social responsibility are basket cases - the most effective business leaders don't waste time with this stuff

Our company is too busy surviving hard times to do this. We can't afford to take our eye off the ball - we have to focus on core business

It's the responsibility of the politicians to deal with all this stuff. It's not our role to get involved

I have no time for this. I've got to get out and sell more to make our profit line. Corporations don't really care - they're just out to screw the poor and the

environment to make their obscene profits

3.5. Motivations to Adopt CSR:Corporations are motivated to adopt CSR practices by several different factors those are giving below:

1) Ethical consumerism:The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of CSR. As global population increases, so does the pressure on limited natural resources required to meet rising consumer demand (Grace and Cohen 2005, 147). Industrialization in many developing countries is booming as a result of technology and globalization. Consumers are becoming more aware of the environmental and social implications of their day-to-day consumer decisions and are beginning to make purchasing decisions related to their environmental and ethical concerns. However, this practice is far from consistent or universal.

2) Globalization and market forces:As corporations pursue growth through globalization, they have encountered new challenges that impose limits to their growth and potential profits. Government regulations, tariffs, environmental restrictions and varying standards of what constitutes labor exploitation are problems that can cost organizations millions of dollars. Some view ethical issues as simply a costly hindrance. Some companies use CSR methodologies as a strategic tactic to gain public support for their presence in global markets, helping them sustain a competitive advantage by using their social contributions to provide a subconscious level of advertising. (Fry, Keim, Meiners 1986, 105) Global competition places particular pressure on multinational corporations to examine not only their own labor practices, but those of their entire supply chain, from a CSR perspective.

3) Social awareness and education:The role among corporate stakeholders to work collectively to pressure corporations is changing. Shareholders and investors themselves, through socially responsible investing are exerting pressure on corporations to behave responsibly. Non-governmental organizations are also taking an increasing role, leveraging the power of the media and the Internet to increase their scrutiny and collective activism around corporate behavior. Through education and dialogue, the development of community in holding businesses responsible for their actions is growing (Roux 2007).

4) Ethics training:The rise of ethics training inside corporations, some of it required by government regulation, is another driver credited with changing the behavior and culture of corporations. The aim of such training is to help employees make ethical decisions when the answers are unclear. Tullberg believes that humans are built with the capacity to cheat and manipulate, a view taken from (Trivers 1971, 1985), hence the need for learning normative values and rules in human behaviour (Tullberg 1996). The most direct benefit is reducing the likelihood of "dirty hands" (Grace and Cohen 2005), fines and damaged reputations for breaching laws or moral norms. Organizations also see secondary benefit in increasing employee loyalty and pride in the organization. Caterpillar and Best Buy are examples of organizations that have taken such steps (Thilmany 2007).Increasingly, companies are becoming interested in processes that can add visibility to their CSR policies and activities. One method that is gaining increasing popularity is the use of well-grounded training programs, where CSR is a major issue, and business simulations can play a part in this. [Citation needed].

5) Laws and regulation:Another driver of CSR is the role of independent mediators, particularly the government, in ensuring that corporations are prevented from harming the broader social well, including people and the environment. CSR critics such as Robert Reich argue that governments should set the agenda for social responsibility by the way of laws and regulation that will allow a business to conduct them responsibly. The issues surrounding government regulation pose several problems. Regulation in itself is unable to cover every aspect in detail of a corporation's operations. This leads to burdensome legal processes bogged down in interpretations of the law and debatable grey areas (Sacconi 2004). General Electric is an example of a corporation that has failed to clean up the Hudson River after contaminating it with organic pollutants. The company continues to argue via the legal process on assignment of liability, while the cleanup remains stagnant. (Sullivan & Schiafo, 2005). The second issue is the financial burden that regulation can place on a nation's economy. This view shared by Bulkeley, who cites the Australian federal government's actions to avoid compliance with the Kyoto Protocol in 1997, on the concerns of economic loss and national interest. The Australian government took the position that signing the Kyoto Pact would have caused more significant economic losses for Australia than for any other OECD nation (Bulkeley 2001, pg 436). Critics of CSR also point out that organization pay taxes to government to ensure that society and the environment are not adversely affected by business activities. Denmark made a law on CSR. 16 December 2008, the Danish parliament adopted a bill making it mandatory for the largest Danish companies, investors and state owned companies to include.

6) Crises and their consequences:Often it takes a crisis to precipitate attention to CSR. One of the most active stands against environmental management is the CERES Principles that resulted after the Exxon Valdez

incident in Alaska in 1989 (Grace and Cohen 2006). Other examples include the lead poisoning paint used by toy giant Mattel, which required a recall of millions of toys globally and caused the company to initiate new risk management and quality control processes. In another example, Magellan Metals in the West Australian town of Esperance was responsible for lead contamination killing thousands of birds in the area. The company had to cease business immediately and work with independent regulatory bodies to execute a cleanup.

7) Stakeholder priorities:Increasingly, corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Understanding what causes are important to employees is usually the first priority because of the many interrelated business benefits that can be derived from increased employee engagement (i.e. more loyalty, improved recruitment, increased retention, higher productivity, and so on). Key external stakeholders include customers, consumers, investors (particularly institutional investors, regulators, academics, and the media).

3.6. Environmental Reporting: Corporate Social ResponsibilityCSR reporting may be defined as the external reporting of social, ethical and environmental aspects of a business organization. It essentially concerns the process of communicating the social, ethical and environmental effects of business organizations' economic actions to particular interest groups within society and to society at large. It involves extending the accountability of firms beyond the traditional role of providing a financial account to the owners of capital or shareholders. Such an extension is predicated upon the assumption that companies do have wider responsibilities than simply make money for their shareholders. This article presents partial findings of an extensive research on CSR practices in Bangladesh. Based on a systematic qualitative survey of 87 business firms, representing such sectors as bank, insurance, textiles, pharmaceuticals, fuel, food, engineering, service, jute and miscellaneous, the study aimed to explore the emerging practice of CSR reporting in developing countries with particular reference to Bangladesh by examining the corporate attitudes towards social, ethical and environmental issues as represented in the text of corporate reports in the public domain. Out of the 87 surveyed companies, only a meager 18% of them disclosed on environmental issues. Even then, the disclosure was very general and superficial. Here are some examples of the environmental disclosures: “The Company is always active to keep its environment pollution free. In addition to the implementation of a forestation programs in all mill areas steps have been taken to keep the internal environment of the factory pollution free by installing modern equipment. We have taken adequate measures to control dust, which is generated during the process of manufacturing cement. The corporate attitude, as evident from the above disclosure statements, suggests a rhetorically loaded but practically cautious and unsubstantial approach. The companies are saying that they have taken environmental issues seriously but their sincerity may be questioned in the absence of the development of an appropriate long-term corporate environmental policy and quantitative indicators to measure performance against the policy. The above ad hoc disclosures can, at best, be taken as a list of mere intentions without evidence of any appropriate action. The environment of Bangladesh is degrading rapidly. The untreated disposal of industrial wastes, gases and fumes is considered as one of the reasons for this. In spite of this, a large majority of companies (82%) included in this study did not make any environmental disclosure. There is a growing consensus amongst both the academics and development activists regarding the crucial significance and topicality of rendering business organizations to act in a more socially and environmentally responsive

manner. As voluntary reporting initiatives often fail to generate the required responses amongst the companies, one cogent view is to argue in favor of mandatory reporting of social, ethical and environmental information as the way forward. Research and practical demonstration on the possible ways and means of ensuring more effective social and environmental disclosures remain generally limited in Bangladesh.

Tax incentives on CSR Spending:The government has approved the long-awaited proposal for tax exemption facility at the rate of 10 percent on a part of the corporate income to be spent on complying with corporate social responsibility (CSR). The exemption facility is aimed at encouraging private companies to be involved more in CSR practices. Finance Adviser Mirza Azizul Islam last week gave go-ahead to the tax exemption proposal, which is expected to be published soon as gazette notification. “The government will lose a very insignificant amount of money for giving the tax exemption facility, but the move will encourage many local business groups to launch CSR activities,” said a high official of National Board of Revenue (NBR). According to the tax exemption plan, economic, environmental and social development activities will be brought within CSR purview. Agricultural production and processing, crop diversification, employment generation, education and training will be considered as CSR areas under economic sector, while global warming, ecological balance, pure water management, carbon emission, sea water level, forestry, city beautification and waste management will be environmental activities. Under social development, companies investing for women rights issues, extending donations to HIV-AIDS campaign agencies, welfare activities for disabled, donations for public universities, relief activities after natural calamities, welfare activities for grassroots children and acid victims will get the tax waiver facility. In order to enjoy the facility, companies will have to follow labor compliant issues and be environmentally conscious. The private sector businesses had long been requesting the government to offer tax waiver on CSR expenditure as they have to pay corporate tax at a rate of 45 percent. Last year the government raised tax exemption limit for donation to charity to Tk. 5 lacs from Tk. 2.5 lacs in a bid to encourage welfare activities.

Proper CSR Practice can Eliminate RMG Unrest:Proper practice of Corporate Social Responsibility (CSR) in the country's ready-made garment units could help avoid frequent labor unrest, said British High Commissioner Anwar Choudhury. “Had there been proper CSR practice in RMG units, the recent unrest could have been avoided,'' he said, adding that many companies in Bangladesh have been practicing CSR very carefully, but their good practices are not being focused. “Buyers from Europe and North America are explicitly choosing to source goods from socially compliant factories. Having a CSR strategy gives a strong and positive message that the company is ethically and socially responsible and contributing to the country's overall economic development and welfare,” he said. The British envoy stressed the need for immediate and permanent resolution of labor unrest in the garment sector through negotiation between owners and workers for more investment and stronger growth. He was speaking as the chief guest at the inauguration of a seminar on 'The Business Case for Corporate Social Responsibility in Bangladesh' held in Dhaka yesterday. The seminar was organized to mark the launching of the project 'Corporate Social Responsibility-a Guide for Companies Operating in Bangladesh and the CSR Fact Sheets' initiated by the British High Commission and the UK Trade & Investment to promote CSR practice in Bangladeshi business houses. The project is being implemented by Reed Consulting BD Ltd. The High Commissioner termed the 2008 calendar year as the defining year for Bangladesh as the country has been approaching towards

holding a free and fair election. “Holding of such free and fair election will enhance the image of Bangladesh, which will Help a lot, in attracting local and foreign investment into the country,” he said. Choudhury also urged the bureaucrats to be more active for creating business friendly environment to attract more local and foreign investment. “We will appeal to the government to remove all possible blockades for a congenial business environment,” he said at the day-long gathering of business proprietors, executives from different local and multi-national business firms, foreign buyers and their local representatives, leaders of BGMEA, BKMEA and representatives from development partner organizations. He opined for the reduction of poverty through more trade and investment, which will generate more employment in the country.

3.7. Key statements of CSR to Sustainable Development: Former President Iajuddin Ahmed said houses to make contribution to economic development by improving the quality of life of their workforce. "Corporate social responsibility (CSR) is a crucial need for promoting sustainable development and long-term advancement of business," the president said at the Standard Chartered-Financial Express Corporate Social Responsibility Award 2005 ceremony in Dhaka. Unilever Bangladesh Ltd and Dhaka Bank Ltd have been adjudged this year's winners in manufacturing and services sector categories. Economist Wahiduddin Mahmud, chairman of the Standard Chartered-Financial Express Corporate Social Responsibility Award Trust, chaired the program. Osman Morad, chief executive officer of Standard Chartered Bank Bangladesh, and Moazzem Hessians, editor of The Financial Express, also spoke. The president also said as CSR is a growing demand; businesses competing in the global economy can no longer afford to ignore the issue. Iajuddin said Bangladesh has been making relentless efforts to adopt operational principles of corporate governance in line with the international best practices. "The regulatory agencies have incorporate many of the relevant issues into their respective operational framework and the process is still on," he added Wahiduddin Mahmud said companies worldwide are increasingly paying attention to CSR in their business approaches by attempting to address social issues and engaging themselves in not-for-profit community welfare activities. Sanjiv Mehta, chairman and managing director of Unilever Bangladesh Ltd, and Shahed Noman, managing director of Dhaka Bank, received the awards.

Chapter -4

Corporate Social Responsibility Reporting in Commercial Bank

4.1. Introduction:Corporate social performance has been introduced in the academic literature, allowing us to be more precise in thinking about corporate social responsibility. Corporate social performance (CSP) is defined (D. J. 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.” Measurement and reporting of the social performance of profit oriented firms forms the core of corporate social performance. The National Association of Accountants (NAA, 1976) committee on Accounting for Corporate Social Performance described the term ‘Corporate Social Performance’ as “The term corporate social performance reflects the impact of a corporation’s activities on society. This embodies the performance of its economic functions and other actions taken to contribute to the quality of life. These activities may extend beyond meeting the letter of the law, the pressures of competition or the requirements of contracts.”

The corporate needs the society to carry on business. Social support is essential for development of a business. No business can grow with out society’s support. As an important part of the society, corporate has to carry some social activities. The NAA Committee on Accounting for Corporate Social Performance identified four major areas of social performance.

Community Development. Human resources. Physical Resources and Environmental Contributions. Product or Service Contributions.

4.2. Four major areas of social performance:

4.2.1. Community development:

Community Development: It includes social activities that are basically beneficial to the general public. For example, activities of housing construction, food programme, community planning and improvement etc. by a corporate would be treated as community development.

Role of CSR in Community Development:

Meaning of Community Development

First of all community is generally defined as a group of people sharing a common purpose, who are interdependent for the fulfillment of certain needs, who live in close proximity and interact on a regular basis. There are shared expectations for all members of the group and responsibility taken from those expectations. The group is respectful and considerate of the individuality of other persons within the community. In a community there is a sense of community which is defined as the feelings of cooperation, of commitment to the group welfare, of willingness to communicate openly, and of responsibility to and for others as well as to one’s self. Most important there exists community leaders who are responsible for the success of any community event, depending on the needs of the community, and the individual’s own feelings. The community leaders are individuals who strive to influence others to take responsibility forTheir actions, their achievements, and the community welfare.

Community development (CD) refers to initiatives undertaken by community with partnership with external organizations or corporation to empower individuals and groups of people by providing these groups with the skills they need to effect change in their own communities. These skills are often concentrated around making use of local resources and building political power through the formation of large social groups working for a common agenda. Community developers must understand both how to work with individuals and how to affect communities' positions within the context of larger social institutions.

CD is the process of developing active and sustainable communities based on social justice and mutual respect. It is about influencing power structures to remove the barriers that prevent people from participating in the issues that affect their lives. Community workers facilitate the participation of people in this process. They enable linkages to be made between communities and with the development of wider policies and programs. CD expresses values of fairness, equality, accountability, opportunity, choice, participation, mutuality, reciprocity

and continuous learning. Educating, enabling and empowering are at the core of CD (Federation of Community Development Learning, 2009).

Common Roles of CSR in Community Development:

From the above meaning of CSR, it is undeniable that CSR has implications on community and CD in many ways. Based on the report of Towers Perrin (2009) CSR is the third most important driver of employee engagement overall. For companies in the U.S. for instance, an organization's stature in the community is the second most important driver of employee engagement, and a company's reputation for social responsibility is also among the top 10 drivers.

The role of CSR in CD used in this paper is any direct and indirect benefits received by the community as results of social commitment of corporations to the overall community and social system.

The common roles of CSR in CD are discussed as follows:

1. To share the negative consequences as a result of industrialization: This is related to increasing conscience-focused marketplaces necessitating more ethical business processes. E.g. higher UK road tax for higher emission vehicles, thus reducing the burden of small vehicle owners in a community (Wikipedia, 2009). By doing so, small vehicle owners share less the tax burden, hence could re-channel the money for more productive uses in the community.

2. Closer ties between corporations and community: Through CSR the existence of corporations in the social system is felt beyond a perception that corporation is a place just to get employment and producers of goods and services. By doing so, corporations and community would stay in peace and harmony. This becomes a social capital that is essential in community development.

3. Helping to get talents: Organizations with a reputation for CSR can take advantage of their status and strengthen their appeal as an attractive employer by making their commitment part of their value proposition for potential candidates. It is also found that when employees view their organization's commitment to socially responsible behavior more favorably, they also tend to have more positive attitudes in other areas that correlate with better performance. They believe their organizations recognize and reward great customer service, act quickly to address and resolve customer concerns, and are led by people in senior management who act in the best interest of customers.

Confidence in senior management is higher in other areas, too, when employees give their company high marks for being socially responsible. For example, if a large number of employees perceive that their organization's senior management supports new ideas and new ways of doing things, this would result on better perception of employees to the organization, hence their trust and loyalty to the organization. There is a correlation between a company's success in the marketplace is often influenced by its capacity for innovation, the perception of the employees to the organization. It is also a factor in attracting and retaining talents. In relating to CD, good employees’ perceptions on a corporation would lead to the community that treats the corporation as an important economic asset in the community.

4. Role in Transfer of Technology (TOT): Closer ties help in TOT between MNCs that give concerns on CSR and communities in the host countries. MNC is a corporation that has its facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they coordinate global management. Very large multinationals have budgets that exceed those of many small countries. Barton (2007) focuses on three mechanisms of international technology transfer: the flow of human resources; the flow of public-sector technology support; and the flow of private technology from MNCs to developing countries. He argues for greater mobility within, and globalization of, the world’s scientific enterprise and reasserts an economic rationale for investing in public-sector research in the developing countries. Through TOT coupled with CSR processes, the targeted community would gain in the various aspects of product development and marketing, such as better price and quality, as well as concern for people’s wellbeing.

5. CSR helps to protect environment: Some of the world's largest companies have made a highly visible commitment to CSR, for example, with initiatives aimed at reducing their environmental footprint. These companies take the view that financial and environmental performance can work together to drive company growth and social reputation. This attitude can only serve to enhance the employment value proposition such as interest in "going green" gains traction (Towers Perrin, 2009). “We green the earth” slogan made by some MNCs in Malaysia who own large golf areas within the vicinity of residential areas is another CSR initiative seems to protect environment. Many non-profit organizations have been involved in learning and advocacy of environmental protection of CSR such as those reported by the United Nations. They are for example a) “Friends of the Earth” who highlights the environmental impact of some MNCs and campaign for stronger laws on environmental responsibility; b) “Green Peace mission” is another example of CSR initiative that gives benefit to society and community in preserving the latter’s rights towards reaping healthy environment (Wikipedia, 2009).

Green Peace is an independent global campaigning organization that acts to change attitudes and behavior, to protect and conserve the environment and to promote peace by many ways, one of which is campaigning for sustainable agriculture and environment by encouraging socially and ecologically responsible farming practices. Green Peace utilizes direct action, lobbying and research to achieve its goals. This influential non governmental organization has its presence in 42 countries with national and regional offices, are largely autonomous in carrying out jointly agreed global campaign strategies within the local community context.

6. Interdependency between a corporation and community: The close link between a corporation and community is another aspect of CSR role in CD because in long run it creates sustainable development. This could be seen e.g. Shell Foundation involvement in the Flower Valley in South Africa and Marks and Spencer in Africa. The CSR projects give aids to local organization and impoverished communities. This certainly leads to sustainable community development (Wikipedia, 2009).

7. A CSR program can be seen as an aid to alleviate poverty: An example is a Malaysian reality program Bersamamu of TV3 which is sponsored by Syarikat Faiza Sendirian Berhad (SFSB), a local enterprise-cum-philanthropist who responds to government’s appeal to help impoverished community to improve their livelihoods (SFSB, 2009). SFSB gets help from the local media company TV3 for publicity and audience support. This TV program is focused on the life reality of the poor, helpless and misfortune people in their survival. Every

purchase of Faiza's Product, will entitle the buyer to make a donation to Tabung Bersamamu TV3 (a fund of the broadcasting agency). Through this collaboration it may trigger other corporations to help the nation in its effort to alleviate poverty and, hence, in developing communities.

8. A CSR program helps in data gathering for other public organization function: For instance in the United States, Intel and IBM (examples of mega ICT firms) assisted under-staffed police departments with information gathering and processing by installing cameras with video processing abilities in areas where there are high rates of crimes. Intel has also conducted initiatives to educate local communities on how they can use technology to prevent crime or at least to use it to detect who committed the crime (CSR@Intel, 2009). This is an example of technology companies implement CSR initiatives that both benefit community and support business objectives.

Community Development (CD)

Bank’s Name CDAB Bank 13

UCB 17DBBL 12

National Bank 15Exim Bank 15Janata Bank 16Bank Asia 14

South East Bank 18One Bank 13Brac Bank 26

Uttara Bank 08Islami Bank Ltd 20

ISBL 20

Table 7: Community Development.

Chart 7: Community Development.

4.2.2. Human Resource:

Human resources: It includes social performance directed towards the well-being of employees. Training programme, up gradation of employees, improvement of working condition, promotion policies and provision of job enrichment etc would be treated as corporate social performance towards human resource.

Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.Human Resource Management is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization's goals and objectives.Different researchers at different points of time have emphasized the critical importanceOf HR for the proper implementation of CSR and the role that HR can play in developingThe process where the business objectives are assessed and values re-aligned to matchthem with staff expectations.

However Fenwick & Bierema (2008) has pointed that HR department, which has the potential to play a significant role in developing CSR activities within the organization, found to be marginally involved or interested in CSR. Mehta (2003), in a survey, found that only 13 per cent of the companies involved their employees in undertaking the various CSR activities. Moreover, the employees have also been less likely to fully internalize the corporate culture (Rupp, et. al, 2006). The implementation of the CSR policy has also traditionally been in the hands of ‘management’ and ‘employees’ as the non-management workforce have been less likely to be involved in developing and implementing a policy on business responsibility towards society. There are large variations in the understanding of CSR in the head office and the local plant or sales office of an organization (Young, 2006). The perceptions of workers and management also differ about whether an organization is complying with such regulations as related to labour or working conditions (Mehta, 2003).

Internalizing CSR: Initiatives of HRM:

The role of HR function in embedding the CSR values in the corporate culture is immense and has been underlined also. An organization can exhibit a better image in the minds of people by presenting itself as an excellent employer which cares for its people and involves them in the ambit of social responsibility. This involvement of employees indicates the strategic importance of HRM in the CSR initiatives of an organization. Human Resource policies, forming the framework for the culture in the business management, create awareness towards the need to achieve the business goals in the best possible and ethical manner (Agrawal, 2007). With the help of HR functions, the socially responsible values can be inculcated and sustained in the organizational culture through the following ways:

The HR department should take the responsibility to develop a formal policy on sustainable practices involving employees. British gas, for example, used employee volunteering as a vehicle to achieve business-driven culture. The success of the initiative led to the development of a formal policy on employee volunteering. The company developed the ‘Cardiff Cares’ volunteering initiative with the purpose of encouraging employees to raise funds and donate some of their time to the local community (Redington, 2005). Employee fundraising was a way to show support for the local community, to build positive team spirit in the organization and to create a ‘winning’ environment at the workplace. The managing director and the HR team’s strong commitment enabled the initiative to be a big success improving the employee retention levels and employee satisfaction.

The orientation programme of newly recruited candidates should be designed in a manner that corporate philosophy about CSR gets highlighted. The commitment of top management towards CSR is very important which should be expressed in tangible terms to reinforce the right kind of behavior in the organization. Wipro, for example, inculcates CSR values amongst its workforce right at the beginning during the induction process corporate presentations, keeping employees updated through mails, regular newsletters are the instruments used to keep employees energized about the organization’s socially responsible initiatives.

The designing of Performance Management System should be done in such a manner that it measures the socially responsible initiatives taken by employees. This becomes important as the internalization of CSR in an organizational culture requires that appropriate behaviors get appraised, appreciated as well as rewarded. Otherwise, the organization might fail to inculcate it amongst all employees due to lack of positive reinforcement.

The Training facilities may also be made available to instill the CSR culture among employees. This becomes necessary to make employees learn and practice CSR activities. The training of employees through “CSR Living Our Values Learning Tool” at Cadbury Schweppes (Young, 2006), the major global beverage and confectionary organization, has been a good example of partnership between HR and CSR. The company has also included social responsibility in the latest management development initiatives like the global “Passion for People” management skills programme.

Code of ethics of an organization can stimulate social responsibility to a great extent reinforcing amongst its employees the underlying values. Training on code of ethics should be undertaken by the organization. Best Buy, a fortune 100 company and the

largest specialty retailer of consumer electronics in the United States and Canada, has initiated ethics training for its employees. Electronic Data Systems (EDS) has a global CSR strategy which is well supported by HR function and the employees (Redington, 2005). The HR department of the company has also developed an e-learning course for its employees built around the Department of Trade and Industry, CSR Competency framework.

The Human Resource department should effectively measure and evaluate CSR activities. The value added by CSR in the form of direct results, such as, economic savings and indirect results like increase in employee satisfaction, less employee turnover, measured by staff attitude surveys, shall indicate contribution to improved business performance. There is also a need to conduct periodic review of the CSR activities. CurAlea Management Consultants Pvt. Ltd. (2007) has suggested for conduction of periodically an independent internal review or audit of the effectiveness of CSR programmers.

Human Resource (HR)

Bank’s Name HRAB Bank 11

UCB 19DBBL 13

National Bank 13Exim Bank 10Janata Bank 13Bank Asia 11

South East Bank 13One Bank 05Brac Bank 20

Uttara Bank 08Islami Bank Ltd 14

ISBL 12

Table 8: Human Resource.

Chart 8: Human Resource.

4.2.3. Physical Resources and Environmental Contributions: Activities by the corporate to prevent environmental deterioration or pollution would be under this heading. Corporate activities towards prevention of air, water or noise pollution, conservation of scarce resources and the disposal of solid waste are included in this area.

Physical resources and environment (PE)

Bank’s Name PEAB Bank 2

UCB 5DBBL 3

National Bank 2Exim Bank 2Janata Bank 2Bank Asia 2

South East Bank 3One Bank 1Brac Bank 6

Uttara Bank 1Islami Bank Ltd 4

ISBL 5

Table 9: Physical Resources and Environmental Contributions

Chart 9: Physical Resources and Environmental Contributions.

4.2.4. Definition of Product and Service:Product or Service Contributions: This area includes consumerism, product quality, packing, advertising, warranty provisions etc.

Product Service Systems, put simply, are when a firm offers a mix of both products and services, in comparison to the traditional focus on products. As defined by (van Halen, Te Riele, Goedkoop) "a marketable set of products and services capable of jointly fulfilling a user's needs". Product and Service can be realized by smart products.

The initial move to Product and Service was largely motivated by the need on the part of traditionally oriented manufacturing firms to cope with changing market forces and the recognition that services in combination with products could provide higher profits than products alone. Faced with shrinking markets and increased commoditization of their products, these firms saw service provision as a new path towards profits and growth.

While not all product service systems result in the reduction of material consumption, they are more widely being recognized as an important part of a firm's environmental strategy. In fact, some researchers have redefined Product and Service as necessarily including improved environmental improvement. For example,(Mont)defines Product and Service as a "a system of products, services, supporting networks, and infrastructure that is designed to be competitive, satisfy customers' needs, and have a lower environmental impact than traditional business models" Mont elaborates her definition as follows: Product and Service is pre-designed system of products, service, supporting infrastructures, and necessary networks that is a so-called dematerialized solution to consumer preferences and needs. It has also been defined as a "self-learning" system, one of whose goals is continual improvement.

Impact of Product Service:

Several authors assert that product service systems will improve eco-efficiency by what is termed "factor 4", i.e. an improvement by a factor of 4 times or more, by enabling new and radical ways of transforming what they call the "product-service mix" that satisfy consumer demands while also improving the effects upon the environment.

Van Halen et al. state that the knowledge of PSS enables both governments to formulate policy with respect to sustainable production and consumption patterns, and companies to discover directions for business growth, innovation, diversification, and renewal.

Product and service (PS)

Bank’s Name PEAB Bank 6

UCB 19DBBL 7

National Bank 6Exim Bank 15Janata Bank 9Bank Asia 7

South East Bank 9One Bank 7Brac Bank 15

Uttara Bank 7Islami Bank Ltd 12

ISBL 14

Table 10: Product and Service.

Chart 10: Definition of Product and Service.

Chapter-5CSR of Banking Institutions in Bangladesh

5.1. CSR statements in annual reports of banks:

AB Bank Limited: AB’s commitment to CSR is a journey, in the course of which it aims to align its business values, purpose and strategy with the social and economic needs of its stakeholders, whilst embedding responsible and ethical business policies and practices into all its endeavors.

Bank Asia Limited : Bank Asia always continues its efforts to look beyond short-term quantitative gains, and to concentrate on issues that make the institution socially responsible and have given all out efforts towards sustainable balanced growth. It considers socially responsible activities as an important part of its culture, identity and business practice. So, it contributes to improve the livelihood opportunities of the less fortunate, provision of facilities for education and health, protection of the environment, and encouragement of cultural and social activities in the rural as well as urban areas.

BRAC Bank Limited: BRAC Bank, through its CSR activities, is trying to build better relationships with all stakeholders by paying closer attention to how to fulfill its social, economic, environmental and ethical responsibilities. CSR practice allows the bank to align its operations with standards and expectations that are increasingly important to its shareholders, employees, customers and communities where it operates.

Dutch Bangla Bank Limited: DBBL as a responsible corporate body has been playing a pioneering role in implementing social and philanthropic programs to help disadvantaged people of the country. Education, healthcare, human resource development, conservation of nature, creation of social awareness, rehabilitation of distressed people and such other programs are some of the important areas where the bank carries out its social and philanthropic activities.

Agrani Bank limited: The bank has a deep commitment, loyalty and a high sense of responsibility to the nation and the people. As part of its CSR activities, the bank contributes greatly to the nourishment of the country’s arts, crafts, culture and sports.

Al-Arafah Islami Bank Limited: CSR is an integral part of the bank’s corporate culture and ethics. The bank responds positively in every sphere of social activities while delivering innovative solutions to its valued customers and helping different areas of social activities through its CSR activities.

EXIM Bank Limited: The bank’s CSR activities mainly involve contribution towards building up an enlightened and prosperous nation. In view of it, it has taken patronization of education as its core CSR activity, whereas disaster management and alleviation of poverty is much emphasized.

Islami Bank Bangladesh Limited: IBBL, a first generation private commercial bank of the country is discharging social responsibility by creating employment opportunities for and ensuring healthy working environment and financial securities.

Janata Bank Limited: The bank is aware of the responsibilities of corporate citizenship, as such, it believes that it is its responsibility to help improve the living standard of the poor people, to try to alleviate poverty from the society and to contribute in the fieldof education, health care, sports etc.

National Bank Limited: NBL recognizes that its activities have an impact on the environment in which the bank and its subsidiaries do business. The bank also realizes that the basis for any good business is trust and that society expects the highest standards of the bank when it comes to the question of ethics and CSR.

One Bank Limited: The bank has decided to constitute One Bank Foundation to enable the Bank to undertake CSR more proactively by taking planned initiatives and serve the needy and distressed community at large.

Social Investment Bank Limited: SIBL has been responding spontaneously to the social commitment. As a part of CSR, the bank paves the way of doing welfare of mankind and provides financial assistance to different beneficiaries.

Southeast Bank Limited: The bank’s Corporate Social Responsibility is about addressing the needs of all the stakeholders in a way that advances its business and make appositive and meaningful contribution to the society.

Uttara Bank Limited: Uttara Bank considers socially responsible activities an important part of its culture, identity and business practice. It has a deep commitment, loyalty and a high sense of responsibility to the nation and its people. As part of its CSR, the bank contributes greatly to the nourishment of the country’s arts, culture and sports and to combat all natural calamities.

5.2. CSR activities reported by banks:

1. AB BANK LIMITED:

Education:

AB Bank limited assisted 20 blind students to participate in a specialized ICT training program. A contribution of Tk. 10.00 lac was made for phase-1 of the program. Upon successful completion of phase-1, 8 visually impaired students were able to find gainful employment in several of offices.

The Bank contributed a further Tk. 12.41 lac in August 2009 to BODA towards providing Braille support for visually impaired students.

Social Welfare:

AB Bank’s “Save the River” campaign appeared in national dailies in July 2009.

Supported the awareness campaign of ADHUNIK ‘Amra Dhumpan Nibaron Kori’ aimed at youths of the country.

Supported an exhibition organized by SAARC Women’s Association, Dhaka to set up a life saving Ventilator for the ICU unit at the Shishu Hospital.

Contributed to Zonta International Club to raise funds for “Shishu Bikash Kendro” for 160 under privileged children.

Contributed Tk. 5 lac to ‘Chhayanat’, a cultural organization, to partly support the construction of an auditorium.

Arranged to publish a supplement in one of the national newspaper commemorating “International Day of the Misuse of Drug and it’s Illegal Trade” organized by Home Ministry.

Periodically participating in such national campaigns as “World Environment Day” organized by Ministry of Environment and Forests, “World Breastfeeding Week” organized by Bangladesh Breastfeeding Foundation, “National Fishery Week” organized by Ministry of Fisheries and Livestock etc.

CSR activities also include contribution for the treatment of prominent cultural artists, donation for procurement of training room equipment for Dhaka Stock Exchange Training Academy, etc.

Sports:

Signed an agreement with Bangladesh Table Tennis Federation in April 2008 for arranging National Table Tennis Championship for four years and contribute an amount of Tk. 7.9 lac each year. Further agreement has been executed under which AB Bank to pay Tk. 15.13 lac per year for scouting new talents.

2. AGRANI BANK LIMITED:

Donation to construct three wards at Ahsania Mission Cancer Hospital. Donation to Bangladesh Shishu Academy. Sponsored City beautification program.

3. BANK ASIA LIMITED

Bank Asia contributes to the development efforts of the government and other recognized agencies including charitable, educational and healthcare institutions, throughout the country.

Education:

Under Bank Asia’s “Higher Studies Scholarship” scheme, poor but meritorious students of rural areas where the bank has branches are awarded scholarships for their higher studies in several core subjects. The scholarships are given basing on the SSC and HSC exam results and the duration of the scholarship is generally 4 to 5 years. Under the program, students receive Tk.2,000 per month and a lump sum grant of Tk.10,000 is given annually to purchase books and for payment of tuition fees. This scheme was introduced in 2005, presently a grand total of 80 students are enjoying benefit of this scheme.

Help poor students in rural areas by establishing and operating Computer Learning Centers (CLC) in different schools in providing a technological platform for students. Already 13 CLCs have been established in different rural schools and are in full operation. About 1,000 students have enrolled so far in these CLCs out of which 900 students have already obtained certificates. The bank is also going to setup another 15 CLCs from where more than 3,000 students are expected to receive education in computer technology every year.

Health:

In the year 2005, Bank Asia started a program in collaboration with Bangladesh Eye Hospital (BEH) to help the underprivileged children by performing ophthalmologic operation of all born blind children of Bangladesh. So far, a total of 929 children have been operated.

The bank arranges free Eye Camps in the rural areas where free treatments including spectacles are provided to a large number of school going poor boys and girls and other people of the localities concerned.

The bank has donated an amount of Tk. 2.00 million to Islamia Eye Hospital (IEH) for the construction of a children ward at the hospital premises.

Donated Tk. 1.5 million for purchasing an ambulance for a hospital run by Bir

Shreshta Matiur Rahman Foundation.

Financial support to Thengamara Mohila Sobuj Shangha for their hospital at Bogra, Centre for rehabilitation of the Paralyzed (CRP) and to Acid Survivors Foundation.

The bank also arranges voluntary blood donation campaign on various national occasions where the officers of the bank and general people participated spontaneously.

Financial Inclusion:

Credit lines are extended to different NGOs to support the initiatives for agricultural development and alleviation of poverty in the rural areas.

Introduced ‘Palli Shawnirvor’ and ‘Kormoshangsthan Prokolpo’ under which microfinance is channeled to the target groups. So far, the bank has extended loans in these sectors amounting to Tk. 460.67 million up to September 30, 2008 through NGOs and rural branches.

4. BRAC BANK LIMITED:

Health:

Donation made to extend BRAC Bank short Stay Ward at ICDDR. Donated to Kidney Foundation Hospital. Sponsored Photography Exhibition & Publishing a Book for Thalessemia Awareness

Program. Sponsored 3rd South Asia Regional Conference on Autism.

Social welfare:

Sponsored 10th Anniversary of Acid Survivors Foundation-International Conference of the survivors of Acid Violence.

Sponsored SAARC Women’s Association Dhaka Chapter. Supplement sponsored 4th Convocation of BRAC University. Sponsored 2nd International Conference on Genocide, Truth & Justice. Sponsored 10th Daily Star O & A Level Performance Awards. Sponsored Junior Tennis initiatives to Bangladesh Tennis Federation. Sponsored Inter School Soccer Tournament. Donated to Bangladesh Wintering Water Fowl Census & Bird Festival.

5. DUTCH BANGLA BANK LIMITED:

Dutch Bangla Bank Limited (DBBL) has been playing a pioneering role in implementing social and philanthropic programs to help disadvantaged people of the country. Education, healthcare, human resource development, conservation of nature, creation of social awareness, rehabilitation of distressed people and such other programs to mitigate human sufferings are some of the important areas where the bank carries out its social and philanthropic activities.

Dutch-Bangla Bank Foundation, established in June 2001, carries out humanitarian activities like rehabilitation of the destitute and neglected section of the society. DBBL provides 5 percent of its gross profit to the foundation every year.

Education

DBBL is providing scholarships to students, especially for those who can not continue their study due to financial constraints as well as to the meritorious and needy students every year since 2003. The bank awards around 300 new scholarships of Tk. 1,000 per month every year along with continuing scholarships for those studying at HSC level. So far around 745 scholarships have been awarded in this level. The Graduation level scholarships of Tk. 2,000 per month are renewable for their entire academic period of graduation level and about 876 scholarships have been awarded in this level. The bank also awards 50 fellowships of Tk. 5,000 per month every year to the researchers having Masters Degree and those studying at different public universities at M. Phil, PhD or post-doctoral level. About 129 fellowships have been awarded so far.

As part of its corporate social responsibility, DBBL donated more than Tk. 10 crore to Dhaka University for constructing a research centre (Centre for Advanced Research in Arts & Social Science Bhaban). The research centre, first of its kind in Bangladesh, aims to play a vital role in higher study in human and social sciences. Researchers and scholars from home and abroad will be awarded scholarships and fellowships for conducting higher study.

Donated to establish a modern Braille printing press to Bangladesh National Society for the Blind for publishing Braille books for the blind students.

Donated reference books to the library of deferent educational institutions like BSMMU, Dhaka University etc.

Donated a pick-up van to Botanic Garden of Bangladesh Agriculture University for collection, conservation and utilization of rare and endangered plant species of Bangladesh etc.

Health:

Cleft-lip problem is not only a health problem but it affects the whole family along with the victim. Since 2003 DBBL is working with these vulnerable groups under its Smile Brighter Program to bring back smile on their face and to enable them to start normal life. This is a continuous program aiming to perform as much operation possible per year. Total 5,000 poor cleft-lipped boys and girls have so far been successfully operated across the country till date.

DBBL Foundation provides financial support for operative treatment of rural and poor women who have been suffering from Vasico Vaginal Fistula (VVF) and other related problems with a view to ensure their healthy and productive life. A total of 86 patients have so far been successfully operated across the country till date.

In 2008, DBBL took an initiative of conducting surgery on some 12,000 poor cataract patients across the country. So far some 2000 poor cataract patients have so far (during 2008 & 2009) been successfully operated across the country under the Cataract operation for underprivileged rural people program.

Under DBBL’s Medicine and nutrition support for HIV/AIDS patients program, 50 HIV/ AIDS patients including women and children are being provided with ARV (Anti-Retro-Viral) medicines, vitamins and nutritious food supplement and clinical supports.

Sports:

DBBL provides financial support for promoting the sports and culture of Bangladesh. Some mentionable events were:

Sponsoring inaugural Test Match between Bangladesh and India. Financial support to Bangladesh Hockey Federation. Sponsoring Dutch-Bangla Bank President cup Golf Tournament. Sponsoring Dhaka Sports Carnival-2007. Donation to Bangladesh Olympic Association.

6. EXIM BANK LIMITED:

Education

As many as 1000 students from around 150 reputed educational institutions across the country are being provided with scholarship in two levels-school level and university level. They are taken under this program to be taken care of for the whole educational life subject to their fulfillment of the eligibility criteria.

Quard or interest free loan is provided to poor and meritorious students to help bear monthly educational expenditure including food, accommodation etc. The quard is distributed to the selected students in monthly installments till their accomplishment of the Masters Degree. 138 poor and meritorious students from a number of reputed educational institutions are being provided with quard.

Disaster relief:

During cold spells, the bank’s foundation team goes to the northern area of the country and distributes blankets and other necessaries to help them survive cold.

During flood hundreds of thousands of people are left out of economic activities. Since the inception of the bank it responded generously to the call of the flood-affected people.

Bangladesh lies in a natural calamity-prone area. EXIM Bank has always been at the service of the people afflicted by those natural calamities.

In 2005, the bank distributed rickshaws among the tornado victim families in Netrokona with a view to helping them return to income generating activities through self-employment.

7. ISLAMI BANK BANGLADESH LIMITED:

Islami Bank Bangladesh Limited (IBBL) operates various welfare activities directly and through Islamic Bank Foundation (IBF). Besides, IBBL has devised several special deposit and investment products for the less fortunate segment of the country as part of its CSR activities.

Financial Inclusion:

The rural poor are encouraged to make savings of at least Tk. 10 per week and allowed to maintain Mudarabah Savings Account (RDS) at IBBL also allows opening Mudarabah Special Savings Scheme (pension scheme)’ with a minimum monthly installment of only Tk. 100.

Small Business Investment Scheme (SBIS) has been taken up for self-employment of educated youths and to provide investment facilities to small businessmen and entrepreneurs without collateral security.

Rural Development Scheme (RDS), to create income generating and productive self employment opportunities through extension of security-free micro investment facilities in agriculture and o.-farm activities. The poor beneficiaries are also provided with health and education support under profit-free quard scheme.

Micro Industries Investment Scheme (MIIS) taken to encourage establishment of micro industries in different areas of the country by the potential entrepreneurs.

Disaster relief:

During various natural disasters, IBBL came forward with activities for the victims directly and through donating into government funds.

Education:

IBBL awards scholarships among the meritorious wards of the bank officials and the meritorious students of Banking & Finance Department of Dhaka University, Chittagong University and Manarat International University.

8. JANATA BANK LIMITED:

Education:

Financing to self-employment & SME for social development, poverty alleviation and overall economic development.

Financing to dairy, fishery, poultry, goat rearing and cow fattening projects. Women entrepreneurship development program, self-dependent loan program, small

businessmen development loan project, diversified supervision loan program. Funding program to NGOs for enhancing the low of micro credit under NGO Linkage

Loan.

Disaster relief:

Donations to government relief fund during any natural disaster (‘Sidr’, cyclone, flood) for the victims and providing special loan program at lower interest rate for employment.

Donation for ‘Aila’ victims in 2008.

Social welfare

Donation to Bangla Academy for annual General Meeting in 2009. Donation to Asiatic Society for publishing Children’s Banglapedia. Sponsored International Mother Language Day celebration by UGC. Donation to Bangladesh Weightlift Federation. Donation to Motijheel Girls High School, Belgachi Bikolpo Degree College, Rajbari. Donation to Schizophrenic treatment center “Day Care Centre” in 2009. Financing to different sector corporations at concessional interest rate for the socio-

economic development of the country. Donation to Ahsania Mission Cancer Hospital.

9. NATIONAL BANK LIMITED:

Education:

Established National Bank Public School & College. Providing scholarships to the meritorious students. Donated to Dhaka University to construct Senate Building. Donated to Dhaka University for Convocation.

Financial Inclusion:

Continuing Disbursement of agro-credit to marginal peasants at lower interest rate. Provided a lucrative amount of loan to “Borendra Bohumukhi Unnayan” to increase

the agro production and development of socio-economic position.

Strengthened the credit facility provided to small & medium industries for employment generation.

Continuing Disbursement of agro-credit to marginal peasants at lower interest rate. Loan for fisheries since 1994 in Mymensingh, Khulna & Jessor. A dedicated branch is

opened at Valuka of Mymensingh. Disbursed Collateral free loan to poor people named micro loan.

Disaster relief:

Donated for the landslide victims in Chittagong. Donated to Prime Minister‘s Welfare Fund for ‘Aila’ victims. Sports: Donation to Bangladesh Football Federation, Bangladesh Olympic Association,

National Shooting Federation. Sponsored Volleyball league-2008. Sponsored Citycell Federation Cup, Citycell B-League. Social welfare: Donated to Asiatic Society, Center for National Culture, Central Kochikachar Mela,

and Liberation War Museum. Donated to Mother & Child Hospital, a Haemodialysis Machine for the treatment of

kidney patients to BIRDEM.

10. ONE BANK LIMITED:

The bank is setting up ONE Bank Foundation to undertake CSR more proactively by taking planned initiatives and serve the needy and distressed community at large.

Disaster relief:

The bank undertook the tasks of assisting poor in various forms such as helping victims of natural disaster by providing food, shelter and self employment where possible.

Contributed to the Prime Minister’s Relief.

Environment:

The bank vowed to be environmentally and socially responsible within the organization by focusing on the well-being and sustained development of the people working in the bank as well as their aspirations, efforts and achievement and further capacity building.

The bank has been keeping watch on the environmental and social impact of proposed undertakings. The Bank takes confirmation of compliance by clients by way of Clearance Certificate from Department of Environment to the effect that concerned projects will not have any adverse impact on environment.

Sports:

Donated vehicles for development of sports like cricket. Sponsored JMB (Jamuna Multi-purpose Bridge) Cup Football Tournament (2008 &

2009) on the occasion of National days.

Social Welfare:

Stipends to poor but meritorious students, adult schools, vocational training centers as well as building infra-structures etc.

Sponsored billboards containing the Citizen’s Charter at different Police stations & provided raincoats & umbrellas for policemen and road barriers & traffic canopies.

Sponsored painting exhibition at Shilpokola Academy.

Arranging free eye camps an d other health related assistance. Donations to initiatives of Civil Society Organizations (CSOs), NGOs and institutions

involved in health, education and cultural sectors for social and environmental improvement including nutrition, health and education in the disadvantaged population segments.

Introduced School banking to promote the savings habit among the children.

11. SOCIAL INVESTMENT BANK LIMITED:

Disaster relief:

During the winter time SIBL staffs give warm clothes to the poor people.

Health:

Helping the poor patients suffering from cataract & low vision, cleft lip/palate & acid burning etc. by arranging camps at their door steps in different places of the country.

Distributing spectacles among the poor patients suffering from cataract & low vision during Holy Ramadan since 2005.

Executives and Officers spontaneously participated in the Voluntary Blood Donation Program jointly organized with Sandhani during 2006 and Bangladesh Thalassaemia Hospital during 2007.

Social welfare: Financial support has been extended to different Mosques, Madrashas, Orphanages &

Voluntary Social Organizations (e.g., Center for Rehabilitation of the Paralyzed, Sight Savers International, Kidney Foundation, Bangladesh Cancer Foundation Hospital, Jatiya Andho Kalyan Samity, Comilla, and Mosabbir Cancer Care Centre).

12. SOUTHEAST BANK LIMITED:

Education:

Sponsored 9th International Conference on Computer & Information at Independent University Bangladesh.

Sponsored 44th Convocation Ceremony of Dhaka University. Sponsoring Golden Jubilee program of Azimpur School & College. Donation to Dhaka University Alumni Association. Sponsored NSU All Asian Inter-varsity Debating Championship. Donation to Abbas Uddin Khan Model College.

Social welfare:

Sponsored International Conference on Global Climate organized by DU. Donation to 30th Commonwealth journalists Association, Pathak Samabesh, Rotary

Club of Dhanmondi, Islamic Banks Consultative Forum. Donation for constructing a brick house to Disahri Foundation. Donated to Society for Assistance to Hearing Impaired children. Donation to Bangladesh Thelassaemia Hospital. Donation to Autistic Children Welfare Foundation Bangladesh. Donation to Bangladesh Amateur Boxing Federation.

13. UNITED COMMERCIAL BANK LIMITED:

As part of its CSR, United Commercial Bank Ltd. is continuing donations to different organizations which support social welfare.

Disaster relief:

Donation to Prime Minister’s Relief Fund for Tornado victims in 2004, and ‘Aila’ victims.

Donation to Victims of Landslide, Chittagong.

Health:

Donation to Riverboat Hospital project. Donation to ORBIS. Donation to ‘Chattagram Maa O Shishu Hospital’. Donation to SIED Trust for providing physiotherapy support to underprivileged

children. Sponsored Immunization Campaign.

Social welfare:

Donation to Election Commission for preparing Voter & National ID. Sponsored New Voter Campaign. Donation to TRY Foundation. Arrangement of job fair. Donation to Monga affected people. Sponsored Tree plantation program for maintaining ecological balance.

14. STANDARD CHARTERED BANK:

Standard Chartered Bank (SCB) has been implementing social and philanthropic programs to help disadvantaged people of the country. Healthcare, Sports, creation of social awareness, rehabilitation of distressed people to mitigate human sufferings are some of the important areas where the bank carries out its social and philanthropic activities.

Health:

Seeing is Believing (SiB), a global initiative to help tackle avoidable blindness, is a partnership between Standard Chartered Bank and the International Agency for Prevention of Blindness (IAPB). Through SiB, Standard Chartered Bank has pledged to invest USD one million over five years in the Dhaka Urban Comprehensive Eye Care project (DUCEC) that will serve over 270,000 visually impaired people.

SCB organized six seminars titled “Confronting AIDS Challenge in the 21st Century: The student Community” to educate over 1,000 students from six different universities in Dhaka to spread awareness about HIV/AIDS amongst the younger generation.

SCB organized six seminars titled “Confronting AIDS Challenge in the 21st Century: The student Community” to educate over 1,000 students from six different universities in Dhaka to spread awareness about HIV/AIDS amongst the younger generation.

Standard Chartered built an operation theatre and a children’s ward at Islamia Eye Hospital, organized workshops to build mass awareness in prevention of HIV/AIDS.

Sports: In 2009, 11th SCB National School Chess Tournament saw 263 youngsters including

12 from India and 4 from Nepal participate in this annual event, in partnership with Bangladesh Chess Federation.

SCB is sponsoring the Young Learners Club of the British Council for the last 10 years, the diverse contests and programs organized by YLC facilitate children not only to recognize their hidden talent but also to nurture them.

1st SCB National School Kabaddi Tournament ’09 saw participation from 24 schools from across the country.

SCB sponsored the National Marathon Team, to participate in The Greatest Race on Earth 08/09, a challenging marathon relay series which run across four of the world’s most exotic cities-Nairobi, Singapore, Mumbai and Hong Kong.

SCB contributed to the development of youths with projects such as Standard Chartered Young Tigers School Cricket and Standard Chartered School Chess tournaments.

Social welfare:

SCB collaborated with The United Nations World Food Program (WFP) and other partners in 2008 and 2009 for ‘Fight Hunger: Walk the World’-the largest and most visible public demonstration in support of ending child hunger worldwide.

SCB joined Helen Keller International to create awareness amongst the local ethnic community about National Vitamin-A plus Campaign-2008 and 2009.

Formed the ‘Standard Chartered-Financial Express Corporate Social Responsibility Award Trust’ in 2005 to promote CSR among entrepreneurs and businesses.

Supported Acid Survivor’s Foundation Ball 2008 in raising awareness to prevent acid violence in Bangladesh, Sponsored the UNAIDS Media Awards 2007; to recognize media professions for an exceptional contribution to society either through writing or reporting on HIV and AIDS in a socially responsible manner and motivating journalists to increase awareness about the deadly disease.

Disaster relief: Donated Tk. 9 Lac to Red Cross & Red Crescent Societies, Bangladesh to help ease

the sufferings of the flood affected people. The bank contributed US $ 50,000 to the British Business Group for the

reconstruction and rehabilitation of Majhir Chor area.

15. UTTARA BANK LIMITED:

As part of its CSR, the bank contributes to the nourishment of the country’s arts, culture and sports and to combat natural calamities.

Disaster relief:

UBL donated Tk. 10.0 million to Prime Minister’s Relief Fund for severely affected people in the year 2007.

Financial Inclusion:

The bank introduced a scheme named “Women Entrepreneurship Development Scheme” to encourage women entrepreneurs in SME sector in 2008.

Besides, the bank continued to disburse loans for income generating activities and poverty alleviation.

Environment:

Under beautification of Dhaka City program, the bank financed in the sculpture of national bird “Doel” which is known as “Doel square” in front of Karzon Hall of Dhaka University.

5.3. Disbursement in case of CSR practices by Banks:

Name Cost in TakaSoutheast Bank Ltd. Tk.14.82 million (Donation)

Pubali Bank Ltd. 40 million (Donation)

Eastern Bank Ltd. Not Disclosed

One Bank Ltd. 7.21 million (Donation)18 million (Sports)

National Bank Ltd. 6.12 million (Donation)Islami Bank Ltd. 5 million ( Benevolent Fund)

10 million (Superannuation Fund)

EXIM Bank Ltd.19.3 million (Scholarship Program)

BRAC Bank Ltd. 9.86 million (Donation)United commercial Bank Ltd. Not Disclosed

Social Investment bank Ltd. 2.5 million (Donation)

Dutch-Bangla Bank Ltd. 30 million (Donation)Bank Asia Ltd. 7.21 million (Donation)

AB Bank ltd. Not Disclosed

Table 11: Disbursement in case of CSR practices by Banks.

Chapter-6

Conclusion

CSR has meant different things to different people. Its real impact that connects back to the organization is not properly understood. This lack of understanding is an opportunity and threat at the same time. Apart from the benevolent social services by banking firms, the new concept of CSR is an emerging one. Banking businesses are driven by government, public and privates. Globalization has made CSR practice an imperative for Bangladesh business. CSR concentrates on benefits of all stakeholders rather than just the stockholders. Awareness and sense of necessity for practicing CSR is becoming more and more pronounced as the country has to adapt itself to the

process of globalization Because of global competitiveness and demand, the CSR practices and standards are being implemented in Bangladesh. But we are yet go a long way. There are challenges to implement CSR properly in Bangladesh. Ultimately CSR practices should be better practiced in Bangladesh for better and enhanced performance. Lack of Good Governance, absence of strong labor unions or consumer rights groups, and inability of the business community to perceive CSR. Finally, CSR has strong societal ramifications in Bangladesh where at least forty percent of the people live in poverty. In order for CSR to gain momentum in Bangladesh, some of the following ideas may be incorporated by banks- CSR must be clearly defined and invite banks to build more innovative CSR practice, CSR education has to be ongoing to keep aware corporate Bangladesh, Banks may support in solving some persistent social issues that may ultimately buy-in the commitment to champion other partnership projects, Banks may introduce CSR newsletters to potential clients, slowly building their interests, Promote CSR through local trade bodies and people's organization.