BSS, Dhaka :
Bangladesh Bank (BB) on Monday issued guidelines to check malpractices in the CSR (Corporate Social Responsibility) programmes of banks and financial institutions (FIs).
The guidelines, which will be effective from December 23, 2014, has been issued against the backdrop of allegation about various misconducts in running the CSR programme by of the country’s banks and FIs.
Allegation were there that some banks were channeling CSR fund for upgrading working conditions, health and safety measures and gender fairness for their own employees that are covered by relevant labour laws and regulations.
Directors of few banks were also allegedly used CSR fund in the programmes or areas those were connected to the board and senior management of banks. The new guideline prohibited such funding from the CSR.
“The guidelines are intended to cover only the CSR support initiatives in the communities outside the banks and financial institutions; not those to do with upgrading of working conditions, health and safety measures, gender fairness for own employees that are covered by relevant labor laws and regulations,” the BB said.
The CSR programme should also be free from insider interests connected to the members of the boards and senior managements, the central bank said. The guidelines list the priority sectors and areas for running the CSR programme. These include: education, healthcare, emergency disaster relief, promoting adoption of environmentally sustainable output practices and lifestyles, promoting artistic, cultural, literary, sports and recreational facilities for the underprivileged, upgrading facilities and lifesavings equipments in emergency rescue services like the fire brigades; and infrastructure improvement for disadvantaged communities in remote areas.
According to the guidelines, all banks should establish a dedicated CSR unit at their head offices or a foundation in case of running larger programme. The unit and the foundation will be under oversight of BB’s CSR and supervision departments, besides their own internal audit and internal controls.
The unit or the foundation will propose the annual budget for the CSR programme and will place it before the board for approval. The board will approve allocations by appropriations from annual post tax net profits. “The proposals for board approval must scrupulously avoid any allocation in favor of any entity directly or indirectly connected with directors, senior management members of the bank/financial institution or with the trustees of its CSR foundation,” the guidelines said.
The banks and FIs with no post-tax net profit surplus may postpone making fresh CSR program expenditure commitments but should continue previous commitments like educational scholarship for a student’s educational course period.
The CSR engagements in priority sector lending like agricultural, SME and green financing should also remain undiminished scale. “Every bank and financial institution shall exercise utmost care in ensuring that the CSR support allocations do not end up aiding of abetting financing of militancy and terrorism,” BB said, suggesting that any suspected event of such abuse of CSR assistance must be reported to law enforcement authorities with stopping the CSR assistance immediately.
“Failure to do so will attract penal proceedings under AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) laws and regulations,” the BB said.
Initiated by BB in 2008, the CSR campaign in the financial sector has inspired all banks and FIs into a broad range of direct and indirect CSR programmes including humanitarian relief and disaster response and widening of advancement opportunities for disadvantaged population segments with support in areas of healthcare, education and training; ‘greening’ initiatives arresting environmental degradation.
Bangladesh Bank (BB) on Monday issued guidelines to check malpractices in the CSR (Corporate Social Responsibility) programmes of banks and financial institutions (FIs).
The guidelines, which will be effective from December 23, 2014, has been issued against the backdrop of allegation about various misconducts in running the CSR programme by of the country’s banks and FIs.
Allegation were there that some banks were channeling CSR fund for upgrading working conditions, health and safety measures and gender fairness for their own employees that are covered by relevant labour laws and regulations.
Directors of few banks were also allegedly used CSR fund in the programmes or areas those were connected to the board and senior management of banks. The new guideline prohibited such funding from the CSR.
“The guidelines are intended to cover only the CSR support initiatives in the communities outside the banks and financial institutions; not those to do with upgrading of working conditions, health and safety measures, gender fairness for own employees that are covered by relevant labor laws and regulations,” the BB said.
The CSR programme should also be free from insider interests connected to the members of the boards and senior managements, the central bank said. The guidelines list the priority sectors and areas for running the CSR programme. These include: education, healthcare, emergency disaster relief, promoting adoption of environmentally sustainable output practices and lifestyles, promoting artistic, cultural, literary, sports and recreational facilities for the underprivileged, upgrading facilities and lifesavings equipments in emergency rescue services like the fire brigades; and infrastructure improvement for disadvantaged communities in remote areas.
According to the guidelines, all banks should establish a dedicated CSR unit at their head offices or a foundation in case of running larger programme. The unit and the foundation will be under oversight of BB’s CSR and supervision departments, besides their own internal audit and internal controls.
The unit or the foundation will propose the annual budget for the CSR programme and will place it before the board for approval. The board will approve allocations by appropriations from annual post tax net profits. “The proposals for board approval must scrupulously avoid any allocation in favor of any entity directly or indirectly connected with directors, senior management members of the bank/financial institution or with the trustees of its CSR foundation,” the guidelines said.
The banks and FIs with no post-tax net profit surplus may postpone making fresh CSR program expenditure commitments but should continue previous commitments like educational scholarship for a student’s educational course period.
The CSR engagements in priority sector lending like agricultural, SME and green financing should also remain undiminished scale. “Every bank and financial institution shall exercise utmost care in ensuring that the CSR support allocations do not end up aiding of abetting financing of militancy and terrorism,” BB said, suggesting that any suspected event of such abuse of CSR assistance must be reported to law enforcement authorities with stopping the CSR assistance immediately.
“Failure to do so will attract penal proceedings under AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) laws and regulations,” the BB said.
Initiated by BB in 2008, the CSR campaign in the financial sector has inspired all banks and FIs into a broad range of direct and indirect CSR programmes including humanitarian relief and disaster response and widening of advancement opportunities for disadvantaged population segments with support in areas of healthcare, education and training; ‘greening’ initiatives arresting environmental degradation.
