Banks’ CSR spending doubles

The banks’ spending on corporate social responsibility (CSR) has doubled in the first half of this year compared to the same period of 2019.

According to Bangladesh Bank (BB) data, the scheduled banks spent Tk 5.17 billion in January to June this year, up from Tk 2.40 billion in the same period last year.

The rise in CSR spending comes after the central bank earlier issued an instruction regarding banks’ CSR. 

The banks were instructed to spend 60 percent of their CSR fund for the health sector. But the banks spent Tk 0.96 billion or 18.85 percent of their CSR fund in the health sector in January-June this year.

Although the Association of Bankers Bangladesh suggested the banks to stop CSR spending after the coronavirus outbreak began in the country.

The country has been combating the coronavirus outbreak since March 8 this year.

As per the BB data, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, ICB Islami Bank, Padma Bank, Shimanto Bank and Commercial Bank of Ceylon did not spend any fund for the CSR in the first half of the year 2020.

Agrani Bank, BASIC Bank, BDBL, Probashi Kallyan Bank, Bangladesh Commerce Bank, Modhumoti Bank, SBAC Bank, Standard Bank, Trust Bank, Uttara Bank, Citibank NA, National Bank of Pakistan and Woori Bank did not spend any money for the health sector.

First Security Islami Bank’s CSR spending for the health sector was the highest Tk 120 million.

The second highest of Tk 80 million was spent by United Commercial Bank, followed by Dutch-Bangla Bank’s Tk 75.3 million, Prime Bank’s Tk 70.3 million and Union Bank’s spending of Tk 70.03 million.

Of the CSR expenses, the banks spent the highest Tk 1.53 billion on disaster management and environmental purposes.

The amount accounts for 29 percent of their total CSR spending, violating the BB guidelines on CSR expenditure that does not allow the banks to spend more than 10 percent of the CSR allocation on a single sector.

For the education sector, the banks spent Tk 63.8 million which is 11.38 percent of their entities’ total CSR budget.

Bankers said that the banks spent the amount either through their own channels or through donations to the Prime Minister’s Relief and Welfare Fund.

The banks get tax rebates on spending under their CSR programmes but they will not enjoy the tax rebate if they spend beyond the limit, said a senior BB official. 

The non-banking financial institutions’ CSR spending stood at Tk 117.1 million in the January-June period this year.