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 Rony Paul Marzia Afrose Samia Alam Mahia Islam Ayesha Siddiqua Reazul Islam Khaleda Akter Toma Nusrat Jahan Nahid Hasan Jannatul Fardous Joty Aysha Siddika ID No 301 302 303 304 305 306 307 308 309 310 311

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." Theres some authors definition about banking: Author Definition "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."

Justice Atkin

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. 2. 3. 4. 5. 6. 7. 8. Increased employee loyalty and retention; Gaining legitimacy and access to markets; Less litigation Increased quality of products and services; Bolstering public image and reputation and enhanced brand value; Less volatile stock value; Avoiding state regulation; and 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 Ministers 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, Lions 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.

12000000 10270000 10000000 8000000 6000000 4000000 2000000 0 1250000 300000

Social Welfare

Education

Relief Fund

Chart: CSR of Mutual Trust Bank Ltd

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 Ministers 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.

6000000 6000000 5000000 4000000

3000000
2000000 1000000 0 Education

2700000

1400000 650000 560000

Employment

Relief Fund

Social Welfare

Sports

Chart: CSR of National Bank Ltd

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 Countrys northern part.

4000000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 Education Sports Social Welfare 550000 600000

Chart: CSR of NCC Bank Ltd

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 selfemployment where possible. Contributed to the Prime Ministers 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.

5000000 5000000 4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 200000 500000 1000000

0
Relief Fund Sports Environment Social Welfare

Chart: CSR of One Bank Ltd

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.

2500000 2100000 2000000

1500000

1000000

800000

750000

500000

0 Sports Social Welfare Health

Chart: CSR of Premier Bank Ltd

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