CORPORATE Social Responsibility (CSR) activities carried by the businesses are meant for the benefits of the society. But the CSR expenditure of the state-owned banks sparked huge controversies that provoked Bangladesh Bank to take moves to streamline monitoring on the CSR activities of the banks. Misuse of bank funds in the name of CSR has become a huge media matter during the last couple of days. Facts at field level justify demand to scan out any misuse of funds and initiated a move to make a comprehensive guideline. The BB move in monitoring mechanism in scheduled banks hopefully will not put any barrier to CSR activities.
In a bid to ensure accountability and transparency in CSR activities, the central bank has make it mandatory for banks and financial institutions to keep the details of the CSR activities including the identity of the recipients. The Finance Ministry has also banned the CSR activities of the four state-owned banks until further notice, as it found evidences corruption and misuse. The imposition surfaced as the four banks increased CSR activities manifolds which put pressure on the banks’ capital ratio. For instance, the board of a state-owned bank in a single meeting approved Tk 20 crore for CSR spending, while a private bank spent a considerable sum in the name of CSR to get membership to an upscale club.
However, the ‘Big -bosses’ of the banks are not happy with the central bank’s stand on CSR Issue. The central bank has asked all commercial banks to forward the detailed information regarding their CSR spendings between January and June, amounting to Tk 5 lakh and above; and also the four state-owned banks to send the same information but for the last five years. In 2013, the four banks spent about Tk 50 crore in total on CSR, with Janata Bank alone accounting for Tk 42.68 crore. Janata’s CSR expenditures this year is Tk 35 crore; in the first eight months, the bank’s board approved Tk 28 crore.
As the CSR funds have become the main agenda of the many state-owned banks’ directors who are appointed mainly on political consideration, BB is close to drafting a comprehensive CSR policy. The commercial banks and financial entities spend CSR funds mainly on education and health sectors. But in the NCBs, such expenditures are mainly incurred at the directives of the board members or the top brasses mainly for ‘image building’ or toeing particular political lines (of which they are the beneficiaries). In an effort to combat corruption, is it wise to impose a ban or limit CSR activities of such institutions?
