Corporate Social Responsibility Practices in Banking Sector of Bangladesh: Its Impact on the Socio-economic Development of Bangladesh

Abstract

Banking Sector is a strong industrial sector in Bangladesh compared to other sectors. The rate of growth and expansion of the banking industry is faster than other industries in the country. In line with the growth and expansion in economic and financial activities, corporate social responsibility is getting more and more attention due to environmental and other reasons. This is a study about the CSR practice of selected five banks in Bangladesh along with a highlight on the social and economic impacts of those CSR activities in the country. For the purpose of the study, financial and nonfinancial information about the banks have been collected from several sources and presented here with different comparisons including bank to bank, year to year information etc. The analyses based on the information about the CSR activities of sample banks have revealed that most of the banks are reluctant in conducting CSR activities unless they can exploit any benefit therefrom. Any direct or indirect benefit may encourage the banks in conducting CSR activities. As one of the strongest industries in Bangladesh, CSR activities are expected to be performed at a large scale by the banks. As a part of corporate citizenship initiatives, banks and financial sectors should also emphasise different responsibilities to the society. Due to these CSR activities, corporate entities are getting some fiscal and promotional benefits in their business.

The study encompasses five sample banks, viz., Dutch Bangla Bank Ltd (DBBL), Mercantile Bank Ltd (MBL), Bank Asia Ltd (BAL), Prime Bank Ltd (PBL) and Southeast Bank Ltd (SEBL). As per the findings on the current CSR practice of the sample banks, Dutch Bangla Bank Ltd. has achieved remarkable CSR performance. At the same time, a very poor CSR performance has been achieved by Southeast Bank Ltd. and it can be said that SEBL has rarely any interest in conducting CSR by its own initiative. Different motivation by Bangladesh Bank in conducting CSR has been found influential for the banks for their CSR activities. The periodic trend of the current GDP growth of Bangladesh and the growth of the banks’ CSR activities are positive. Moreover, the CSR beneficiaries, who require small funding and are usually not in a position to access to formal banking sector, are being directly benefitted from the CSR activities of the banks in their day- to-day livelihood and basic support for health, education, and some other areas.