Although banks are supposed to spend 20 percent of their Corporate Social Responsibility (CSR) fund in the health sector, in reality they spent less than half of it there.
Banks spend a good amount of these funds in the education sector, and even more for disaster management — flouting the directive of the central bank.
Analysing CSR reports compiled by Bangladesh Bank(BB) over the last three and half year, it was found that banks spent nearly Tk2,400 crore in CSR funding. However, they have spent only 10 percent in the health sector, which is well below the required amount during this period.
CSR spending for health in 2018 was less than 6 percent, and was around 8 percent in 2016. Spending on disaster management during the mentioned period was the highest — nearly 41 percent of the total distribution.
According to a BB directive, banks have to give 30 percent for education, 20 percent for health and 10 percent for climate change or disaster management from their CSR budget.
Banks seem to be very interested in helping disaster affected people because half of their CSR spending went on disaster management during the first six months of the current calendar year (January to June).
This spending is five times higher than the rate fixed by Bangladesh Bank. However, banks distributed far less than the rate fixed by BB in the education and the health sectors.
BB data shows that banks spent nearly 50 percent of their CSR for disaster management, while spending on education and health stood at around 24 percent and 10 percent respectively.
The total CSR spending by banks amounted to Tk239.33 crore in the first six months of the current financial year, which is Tk38 crore more than in the last six months of the previous financial year.
A Bangladesh Bank report says: "Spending for disaster management goes towards warm clothes and blanket distribution among people affected by cold weather, relief distribution among flood affected people and fire victims. The money is mainly donated to the Prime Minister's Relief Fund."
Apart from this, banks also distribute some amount under their own respective initiatives.
Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh said that banks spend more on disaster management because Bangladesh is a disaster prone country.
"Sometimes the government also urges us to lend a hand," said Mahbubur Rahman. He added that they would prioritise health and education in the future.
Corporate social responsibility (CSR) is a self-regulated business model that makes a company socially accountable to itself, to its stakeholders, and to the people. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the economic, social, and environmental impact they are having on all aspects of society.
According to BB data, Bangladesh Commerce Bank, Padma Bank, ICB Islami Bank, Community Bank and Woori Bank Bangladesh have not allocated any funds for CSR in the last six months of the current financial year.
Besides, BDBL, Habib, State Bank of India and National Bank of Pakistan's distribution for CSR was poor.
From January to June this year, Dutch Bangla Bank spent the highest, with a disbursement of Tk46.64 crore. It distributed 63 percent for education, 20 percent for health and 14 percent for disaster management.
At the same time, 18 non-banking financial institutions spent Tk1.5 crore on CSR during the first six months of this financial year. Spending for education was the highest — 19 percent, while 16 percent was for disaster management and 7 percent for the health sector.