Banks' CSR spend sees sudden rise
Private banks' spending on corporate social responsibility (CSR) schemes for disaster management purposes witnessed a whopping 162 percent year-on-year rise last year.
The expenditure aimed at distributing blankets and warm clothes for winter-stricken people hit Tk 480 crore in 2017-18, up from Tk 183 crore in 2016-17, according to Bangladesh Bank data.
Banks had spent the amount either by own channels or through donations to the Prime Minister's Relief and Welfare Fund.
The higher expenditure for disaster management fuelled the total CSR spend in the second half of 2017 and in the first half of 2018, according to the central bank's half-yearly report on philanthropic activities of banks.
The banking sector's total CSR expenditure almost doubled to Tk 1,045 crore in the last fiscal year, from Tk 541 crore a year ago.
In April last year, the Bangladesh Association of Banks, the forum of directors of private commercial banks, donated Tk 163 crore to the PM's relief fund.
In the first half of 2018, banks spent Tk 247 crore for disaster management, the second highest after education among the eight sectors where CSR money could be spent.
The amount was 39.36 percent of the entire CSR expenditure of Tk 627 crore, BB data showed.
The expenses for the same purpose were Tk 93.97 crore from January to June of 2017 and Tk 235.36 crore in the next six months to December.
“The expenditure figure for the disaster management purpose is a bit unusual,” said Khondkar Ibrahim Khaled, a former deputy governor of the central bank.
He added: “It is difficult to say whether the CSR money is used properly as the central bank has no handle on it.”
Anis A Khan, managing director of Mutual Trust Bank, says CSR spending has increased as banks distribute blankets in the areas where branches are located.
“And we have social responsibility to spend for the poor,” he added.
Islami Bank Bangladesh, the largest private lender in the country, spent the highest—Tk 64.77 crore—for disaster management in the first half of last year while Exim Bank became second with Tk 25.60 crore.
Among other banks, National Bank expended Tk 18.60 crore, First Security Islami Bank Tk 12.20 crore, Premier Bank Tk 11.60 crore, and United Commercial Tk 10.59 crore.
Banks can spend for the philanthropic purposes from their net profits and there is no limit on expenditure, according to the guideline that BB issued in December 2014 on CSR expenditure.
Banks can spend 30 percent of their profit for education, 20 percent for health and 10 percent for climate risk. The expenditure will be participatory, not mandatory, said the guideline.
