An Assignment On

CSR Activities of Banks

Subject: Accounting Principles (1102)

Submitted To

Kazi Zahidul Haque

Lecturer, Accounting

Department of Business Administration

Dhaka City College

Submitted By

Ambitious

15th Batch

Section: E

Group No: E-4

Date of Submission: 30 May 2013

Group Members

Name ID No

Rony Paul 301

Marzia Afrose 302

Samia Alam 303

Mahia Islam 304

Ayesha Siddiqua 305

Reazul Islam 306

Khaleda Akter Toma 307

Nusrat Jahan 308

Nahid Hasan 309

Jannatul Fardous Joty 310

Aysha Siddika 311

Bank

Finance is the life blood of trade, commerce and industry. Now-a-days, banking

sector acts as the backbone of modern business. Development of any country

mainly depends upon the banking system.

What is a Bank?

The term bank is either derived from Old Italian word banca or from a French

word banque both mean a Bench or money exchange table. In olden days,

European money lenders or money changers used to display (show) coins of

different countries in big heaps (quantity) on benches or tables for the purpose

of lending or exchanging.

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.

Oxford Dictionary defines a bank as "An establishment for custody of money,

which it pays out on customer's order."

There’s some authors definition about banking:

Author Definition

Justice Atkin

"The bank undertakes to receive money and to collect

bills for its customer's account. The proceeds so

received are not to be held in trust for the customer,

but the bank borrows the proceeds and undertakes to

repay them. The promise to repay is to repay at the

branch of the bank where the account is kept, and

during banking hours. It includes a promise to repay

any part of the amount due against the written order

of the customer addressed to the bank at the

branch..... Bankers never do make a payment to a

customer in respect of a current account except upon

demand."

The Privy Council

(England)

“ A company which carries on as its principal

business the accepting of deposits of money on

current account or otherwise, subject to withdrawal

by cheque, draft or order is called a Bank.”

Characteristics / Features of a Bank:

1. Dealing in Money

2. Individual / Firm / Company

3. Acceptance of Deposit

4. Agency and Utility Services

5. Profit and Service Orientation

6. Banking Business etc.

Functions of Bank:

Banking Sector 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), 28 local private

commercial banks, 12 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 regulates and supervises the activities of all banks. The

Bangladesh Bank is now carrying out a reform program to ensure quality

services by the banks.

The banking sector of Bangladesh compared to its economic size is moderately

bigger than many other economies of equal level of development and per capita

income. There are forty-seven commercial banks operating in this small

economy. Although over the last thirty years, the country achieved noticeable

success regarding the access to banking services, in 1972 population per branch

was 57,700 and in the year of 2010, it was 20,162 per branch. The statistics

indicates that getting banking services is not a significant problem for the

country. Being the central bank of the country, Bangladesh Bank is responsible

to regulate, monitor and supervise all the banks operating in the country.

Bangladesh Bank perform both onsite and offsite supervision of banking

operation. For offsite supervision, Bangladesh Bank has to rely on various

financial statements and other documents as specified by Bangladesh Bank sent

by all the scheduled banks.

Types of Bank in Bangladesh:

The banks of Bangladesh are different in types and functions. They are:

1.Central Bank, (Bangladesh Bank)

2.Foreign Commercial Banks, (HSBC, Standard Chartered Bank, City Bank etc)

3.Private Commercial Banks, (BRAC Bank Limited, Agrani Bank Limited,

Islami Bank Bangladesh Ltd etc)

4.State-owned Commercial Banks, (Rupali Bank, Sonali Bank, Janata Bank etc)

5.Specialized Development Banks. (Grameen Bank) etc.

Corporate Social Responsibility

What is CSR?

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:

Companies need to answer to two aspects of their operations. 1. The quality of

their management - both in terms of people and processes (the inner circle). 2.

The nature and quantity of their impact on society in the various areas.

Outside stakeholders are taking an increasing interest in the activity of the

company. Most look to the outer circle - what the company has actually done,

good or bad, in terms of its products and services, in terms of its impact on the

environment and on local communities, or in how it treats and develops its

workforce. Out of the various stakeholders, it is financial analysts who are

predominantly focused - as well as past financial performance - on quality of

management as an indicator of likely future performance.

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.

Benefits of CSR:

Consumers increasingly don't accept unethical business practices or

organizations who act irresponsibly. Advances in social media (giving everyone

a voice) mean that negative or destructive practices quickly fuel conversations

online. Organizations are accountable for their actions like never before.

1. The Business Benefits of CSR:

CSR should not be viewed as a drain on resources, because carefully

implemented CSR policies can help your organization:

Win new business.

Increase customer retention.

Develop and enhance relationships with customers, suppliers and

networks.

Attract, retain and maintain a happy workforce and be an Employer of

Choice.

Save money on energy and operating costs and manage risk.

Differentiate yourself from your competitors.

Generate innovation and learning and enhance your influence.

Improve your business reputation and standing.

Provide access to investment and funding opportunities.

Generate positive publicity and media opportunities due to media interest

in ethical business activities.

2. Social Benefits From CSR:

The voluntary corporate commitment of companies has been increasingly

moving for over a decade both nationally and internationally into the spotlight

of politicians. All over the world, governments and societies are facing major

economic, social and environmental challenges. Climate change, demographic

trends, the scarcity of resources and an increasingly globalised economy and

labor market are changes which need to be addressed within the context of

sustainable development. Neither politics nor business or any other social group

can overcome these challenges alone. Owing to the looming financial limits of

state action, politicians, the public, consumers and investors are expecting

companies to take an active and responsible role in shaping social progress.

Entrepreneurial CSR activities cannot, however, simply replace the

responsibility of the lawmaker. The first objective of a company is to be

successful in its core business. This success is the basis for the social activities

of a company and therefore also the prosperity and employment of national

economies.

Corporate Social Responsibility is the way to accomplish this. In its most basic

definition, CSR is a business entities contribution to the development of a

society. According to the International Institute for Sustainable Development,

key areas that CSR addresses are environmental protection and the wellbeing of

employees, the community and civil society in general, both now and in the

future.

When a company takes it upon itself to commit to a certain responsible

investment, it effectively communicates to its stakeholders “Investors,

employees, suppliers, creditors, trade unions, community members, consumers,

government agencies, concerned non-governmental organizations and the public

sphere” that it recognizes the importance of social welfare and can be counted

on to be part of the solution, make ethical decisions and do the right thing.

Society at large benefits greatly with different CSR efforts by being ensured of

product safety and quality, having access to corporate-sponsored community

education, employment, housing and anti-poverty programs, being beneficiaries

of employee volunteer outreach activities and receiving charitable contributions.

Other Benefits:

1. Increased employee loyalty and retention;

2. Gaining legitimacy and access to markets;

3. Less litigation

4. Increased quality of products and services;

5. Bolstering public image and reputation and enhanced brand value;

6. Less volatile stock value;

7. Avoiding state regulation; and

8. Increased customer loyalty;

CSR Activities of Banks

1. Mutual Trust Bank.

2. National Bank.

3. National Credit & Commerce Bank.

4. One Bank.

5. Premier Bank.

Mutual Trust Bank

Limited

MUTUAL TRUST BANK LIMITED

Mutual Trust Bank Ltd. firmly believes that the stakeholders of the bank are not

only its sponsors, shareholders, depositors and other customers of the bank, but

also the common people of the country including the less privileged and special

people. As such, the bank plays an important and participative role, whenever

any natural crisis befalls the nation. MTB regularly contributes to the

development efforts of the government and other recognized agencies including

charitable, educational and healthcare institutions, throughout the country,

manifested through donations, sponsorships etc. MTBL plays an important and

participative role, whenever any natural crisis befalls the nation. MTBL

regularly contributes to the development efforts of the government and other

recognized agencies including charitable, educational and healthcare

institutions, throughout the country, manifested through donations, sponsorships

etc.

Disaster relief:

Donated Tk. 1 million for the cyclone ‘Aila’ affected people to the Prime

Minister’s Relief & Welfare Fund.

Education:

MTB distributed scholarships in 2008 to 54 poor but meritorious students

of the University of Dhaka.

The bank extended financial assistance to East west University,

University of Dhaka History Society.

Social welfare:

The bank also extended financial assistance to Bangla Academy,

Disabled Foundation, Lion’s Club District 315B, Rotary Club of Dhaka

Central, IBA Alumni Association, Bhawaiya Sangeet Shilpi etc.

Sponsored International Theatre Festival, Annual Sports of Glorious

School, International Symposium on Climate Change, Seminar on Food

Security in South Asia organized by the University Of Dhaka & Ohio

State University.

Chart: CSR of Mutual Trust Bank Ltd

0

2000000

4000000

6000000

8000000

10000000

12000000

Social Welfare Education Relief Fund

10270000

300000

1250000

National Bank

Limited

NATIONAL BANK LIMITED

The National Bank LTD is the first private sector fully owned by Bangladeshi

entrepreneurs. At present, NBL has been carrying on business through its 149

branches spread all over the country. Alongside, banking activities, NBL is

actively involved in sports and games as well as in various Socio-Cultural

activities.

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.

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.

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.

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.

Chart: CSR of National Bank Ltd

0

1000000

2000000

3000000

4000000

5000000

6000000

Education Employment Relief Fund Social Welfare Sports

6000000

2700000

1400000

650000 560000

National Credit &

Commerce Bank

NATIONAL CREDIT & COMMERCE BANK LIMITED

NCC Bank 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. NBL

has always given due importance to its responsibility to the society. In order to

institutionalize its duty to the society, the bank has established a foundation.

Established NCC Bank Foundation in 2007 devoted to the cause of charity,

social welfare and other benevolent activities towards the betterment of the

society. The Board of Directors of the bank has pledged to contribute 1% of

operating profit to this Fund every year.

Disaster relief:

• Distributed blankets to the destitute people of southern part of the country.

• Donation to Aila affected people.

Education:

• Scholarship to 5 meritorious student of faculty of Business studies (DU).

• Sponsored a science fair at Vikarunnessa Noon School.

• Distributed teaching materials to poor students of Dahagram and Angorpata

enclaves.

• Donation to construct a semi-paka building at Darul Ulum Debahata Kaumi

Madrasa & Orphanage.

• Donation to construct 1st floor at Feni South East College.

• Donation to construct class room at Mahbubul Haque High School,

Mohammadia Hefzakhana, Orphanage, Nurani Islami Kindergarten.

• Donation to construct academic building at Nurunewaz High school.

• Donation to construct a semi-paka building at Nurpur Khaeria Ebtedai

Madrasha.

Sports:

• Sponsored Bank Inter district Volleyball Tournament 2007.

• Sponsored NCC Bank Vatiary Golf Tournament & DU convocation since

2007.

• Published attractive souvenir regarding ICC World Cup Cricket & World

Cup Football.

• Sponsored Bangladesh Cycling Federation.

Social Welfare:

• Through NCC Bank Foundation subsidy has been extended to a City

Hospital.

• Extended credit facilities under flexible terms for cultivating maize in the

Country’s northern part.

Chart: CSR of NCC Bank Ltd

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

Education Sports Social Welfare

4000000

550000 600000

One Bank Limited

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. 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 Fund for ‘Aila’ victims.

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 take 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 painting exhibition at Shilpokola Academy.

• Arranging free eye camps and other health related assistance.

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

• Payment of remuneration of Tk. 20,000/- per month to a doctor for

extending medical service to the poor of Joypara, Dohar, Dhaka.

• Distribution of 3000 pieces blankets among destitute people in Noakhali

and Gokil, Bogra amounting to Tk. 7.50 lac

• Contribution of Tk. 5 lac to the FBCCI Foundation for their “Employment

Project” under name and style “One Business One Family”.

Chart: CSR of One Bank Ltd

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

5000000

Relief Fund Sports Environment Social Welfare

5000000

200000500000

1000000

Premier Bank

Limited

PREMIER BANK LIMITED

The bank is earnestly committed to its Corporate Social Responsibilities and out

of these responsibilities it is conducting various charitable, social welfare and

development activities

Health:

• Sponsoring National Vitamin A + Campaign conducted by the Government

in May, 2008.

• Sponsoring Breast Feeding Week: 01-07 August, 2008 conducted by

Breastfeeding Foundation.

• Sponsoring Bangladesh Physiotherapy Association on occasion of 3rd

National Conference of the organization in November 2008.

Sports:

• Sponsoring 03 national events to Bangladesh Basketball Federation for Tk.

15.00 lac.

• Sponsoring Bangladesh Sports Writers’ Association for Tk. 6.00 lac on the

occasion of Annual Award Giving Ceremony of the organization in November

2008.

Social welfare:

• Sponsoring International Day against Drug Abuse and illicit trafficking

2008.

• Sponsoring Fisheries development Campaign-2008 organized by Dept.

Fisheries, Bangladesh in September 2008.

• Donation to Birshrestha Motiur Rahman Foundation, ‘Kendrio Khelaghar

Asor’.

Chart: CSR of Premier Bank Ltd

0

500000

1000000

1500000

2000000

2500000

Sports Social Welfare Health

2100000

800000 750000

Recommendation 1. Mutual Trust Bank contributed BDT. 1 crore for the tragedy of Savar to

the Prime minister’s Relief fund as their Corporate Social Responsibility.

The other banks such as, Premier Bank and National Bank should come

forward increase to this fund.

2. In the education sector Premier bank should more contribute to the poor

and scholar students and One Bank should also develop this sector.

3. Our country has a great performance in sports sector. Premier Bank

contributes to develop this performance. If the other Banks contribute in

this sector, it will develop more the sports sector in our country.

4. In health sector Bangladesh has least opportunity. Premier bank have

contributes in this sector. So all other Banks should contribute to this

sector.

Conclusion

It is concluded that CSR is about business, government and civil society

collaboration with the bottom line is the achievement of win-win situation

among the three entities. From the social point of view, CSR should benefit

community because the latter has a very complex structure as it consists of

individuals with various levels of control of resources physically and intangibly.

The analysis on the theories allows the understanding of CSR that goes beyond

its traditional meanings; therefore, CSR necessitates a multidisciplinary

approach in its perspective and practice. Since the current meaning of CSR is

complex, knowing the theories allows scholars to have a better understanding

about corporation-society relations, in which theories and practices of CSR are

influenced by numerous economic and non-economic as well as internal and

external forces.

Appendix:

Books & Articles:

1. Corporate Social Responsibility And Its Role In Community

Development: An International Perspective By Maimunah Ismail.

2. CSR review of Banks By Bangladesh Bank.

3. Report on the CSR of Banks of Bangladesh.

4. Corporate Social Responsibility and the Society By: Saheli

Chakraborty.

Websites:

1. google.com

2. alibaba.com

3. reportbd.com

4. bangladesh-bank.org

5. onebank.com.bd

6. www.nccbank.com.bd

7. premierbankltd.com

8. www.nblbd.com

9. www.mutualtrustbank.com

10. wikipedia.com

11. Wikiask.com