EXECUTIVE SUMMARY: In this report the Overall work of Corporate Social Responsibility of CBs in Bangladesh will be focused and described. To know the details about Mercantile Bank and CSR activities of CBs in Bangladesh I interviewed some Bank Officer of MBL and other information were collected and gathered with the help of the internet.
The company overview was collected both from internet and bank which I used in my report. The report will talk about the Corporate Social Responsibility in Bangladesh perspective and CSR activities of Mercantile Bank and other Bank in Bangladesh, how my supervisor helped me to make the report, what I have learned from this dissertation and how my supervisor assessed me on my work.
In this report, I have tried to give a comparative picture of corporate social responsibilities (CSR) of CBs in Bangladesh. I also defined what corporate social responsibilities and tried to show how important it is in this 21st century.
The report has been segmented into seven parts. The first part focuses on introduction, scope of the report, objectives, methodology, and limitations. The second part includes information about Mercantile Bank. The third part of the report gives the definition of CSR. This part also includes historical definition of CSR. The fourth part gives the position of CSR in global and Bangladesh context. This part also gives some commercial Banks CSR activities in Bangladesh.
The fifth part gives CSR activities of Mercantile Bank Ltd. The sixth part shows the Comparison of CSR activities (Mercantile Bank with Other Banks). Last part of the report concluded with conclusion and some constructive recommendation regarding good practice.
I have taken all the reasonable care to ensure the quality of the report and I hope that it has included all the necessary information which is in the scope of my ability.
I would like to express that my effort for this report will provide you a better picture regarding the CSR activities of CBs in Bangladesh.
Social responsibility is a concept well known in the corporate world and beyond that. Business all over the world have practiced only profit making actions at past but not for long as the enterprise started to develop complexities and wideness in size and actions so was their reach getting bigger and bigger. As every person has his own social responsibilities towards the society so does the business firms. The idea is that, the business has social obligations and above and beyond making a profit is corporate social responsibility. However, it is regretful that though internationally it is being practiced widely, Bangladesh is still lagging behind.
Bangladesh is a developing country. Because of global competitiveness and demand, the CSR practices and standards are being implemented in Bangladesh. But we are yet go a long way. There are challenges to implement CSR properly in Bangladesh. Ultimately CSR practices should be better practiced in Bangladesh for better and enhanced performance.
Jamuna Bank believes that Corporate Social Responsibility (CSR) is integral and inseparable part of the long term business and sustainable growth and success, which plays an important role in promoting values both locally and internationally. The bank integrates all social, environmental and socio-economical issues in the time of its decision making. Contribution in CSR programs is always supported and encourage by the Board of Directors of the Bank. The management reports to the Board on CSR activities and is responsible to implement a specific line of approving authority, control and monitoring for financial support to such activities.
Objective of the Study
Following were the objectives of the study—
The primary objective of the study is to meet the partial requirements to fulfill the BBA degree from IBAISUniversity under Accounting Department and to enhance the practical knowledge about the specific area of the CSR activities of private Bank sector in Bangladesh.
To attain the broad objective following specific objectives were pursued:
- To attain the knowledge about CSR activities of Bangladesh.
- To have better idea about CSR in Private sector of Bangladesh.
- To find out the major problems relating in CSR activities of Private sector of BD.
- To acquire in depth knowledge about the CSR activities position around the world.
- To identify the Strengths, weaknesses, opportunities and threats and acceptability of this sector to the society.
- To observe and analyze the total contribution of CSR activities of private bank sector in BD.
- To know the rules of Bangladesh Bank about CSR.
In conducting the study I shall follow an exploratory approach. In collecting and analyzing data I will follow a deductive approach. I will present my findings in both theoretical and graphical by making a comparison of CSR activities in some private bank of Bangladesh. All the private of BD earn a huge profit, according with their profit how much they spend for CSR, I analyzing it. What type of problem or opportunity are present in CSR activities, I analysis the total issues. I will use some statistical tools like as Correlation, Regressions, Central Tendency and some other methods.
Scope of the Study
This report will give a clear idea about “CSR Activities of CBs in Bangladesh” How organization do their CSR activity? What types of CSR they do for the society? Does their CSR activity is effective for the society? How much amount they spend for CSR? To have answers of all these questions, it is tried to go through the CSR position around the world; with three months working experience in Jamuna Bank and had discussions with officials of different wings.
To make this report I used five Banks CSR activities. These are:
- Jamuna Bank Ltd.
- Dutch-Bangla Bank Ltd.
- Southeast Bank Ltd.
- Prime Bank Ltd.
- Bank Asia Ltd.
Limitation of the Study
Product and Service:
Financial Product and Services
The Bank has launched a number of financial products and services since its inception. Among these, Monthly Savings Scheme, Family Maintenance Scheme, Double Benefit Deposit Scheme, Quarterly Benefit Deposit Scheme, 1.5 Times Benefit Deposit Scheme, Advance Benefit Deposit Scheme, Consumer Credit Scheme, Small Loan Scheme, Lease Finance Scheme, Overseas Employment Loan Scheme, Car Loan Scheme, Home Loan Scheme and SME Loan have received wide acceptance among the people.
Monthly Saving Scheme
It is our significant product; introduced to attract small savers for building up their habit of savings and thereby build up a healthy capital base for the economy. The monthly installments are in various sizes and one can adopt the schemes for a period of 05 years, 08 years or 10 years. Investor gets a lump sum (principal plus interest) at the maturity of the scheme. Installment amount should be deposited within the first 10 days of each month. In case of failure, 5% of monthly installment will be charged as late payment fee which will be added with the installment amount. In case of premature encashment, interest will be paid at Savings rate. The incumbent depositor can get a loan facility of maximum 80% of his deposited amount. At the end of 2009, BDT 13.58 billion was deposited against that of BDT 9.79 billion in 2008 recording 38.71% growth in this scheme.
Monthly Benefit Deposit Scheme
Under this scheme, depositor will get a certain sum of money in each month proportion to his/her deposit during the entire tenure. Benefit starts right from the first month of opening an account under this scheme and continues upto five years. On maturity, the principal amount is paid back. Objectives of this scheme are: help the retired persons for investing their retirement benefits, create investment opportunities for Non-Resident Bangladeshi, etc. Minimum deposited amount is BDT 50,000 or its multiples and the tenure is Five (05) years. This scheme is also known as “Family Maintenance Deposit Scheme (FMD)”. Under this scheme total amount of BDT 1.86 billion was deposited upto the end of 2009.
Double Benefit Deposit Scheme
Under this scheme, deposited amount will be double in a tenure of Seven and Half (7.5) years. Minimum deposited amount should be BDT 10,000 or its multiples. In case of premature encashment interest will be paid on Saving A/c Rate. Loan may be granted up to maximum 80% of the deposited amount, but minimum principle amount must be BDT 20,000. At the end of 2009 total amount of BDT 6.93 billion was deposited under this scheme.
Quarterly Benefit Deposit Scheme
The ‘Quarterly Benefit Deposit Scheme’ will be maintained for a period of 3 (three) years and the minimum amount of deposit is BDT 50,000.00 (fifty thousand) or its multiples. Interest will be paid on quarterly basis. Benefit starts right from the first quarter of opening the account. On maturity, principal amount will be paid back. Savings account is needed to maintain this scheme. Loan may be granted up to maximum 80% of the forced encashment value on the date of loan processing. During the period of continuation of loan, quarterly benefits will be credited only to the loan account. Deposit under this scheme increased to BDT 229.40 million in 2009 from BDT 145.35 million in 2008.
1.5 Times Benefit Deposit Scheme
Under the ‘1.5 Times Benefit Deposit Scheme’ a deposit of minimum BDT 50,000.00 (fifty thousand) or its multiples will be received for a period of 4.25 years. On maturity, 1.5 times of the deposited amount will be paid back to the account holder. In case of premature encashment interest will be paid on Saving A/c Rate. However, no interest shall be paid if premature encashment takes place before expiry of 1 (one) year. Loan may be granted up to maximum 80% of the deposited amount. Total amount of Deposit under this scheme increased significantly to BDT 233.67 million from just 139.37 million at the end of 2008.
Advance Benefit Deposit Scheme
Under this Scheme, one can deposit a certain amount of money for two years. The depositor will receive the benefit on yearly basis. The benefit amount of first year will be received in advance at the time of deposit. On maturity, the depositor will get back the principal amount with the benefit amount of second year. That is Interest is paid in two phases, first phase paid initially BDT 9,500 and second phase paid BDT109,520 after maturity against BDT 1,00,000. Loan may be granted up to maximum 70% of the deposit. This is Also known as “Agrim Munafa Amanat Prokolpo (AMAP)”. BDT 76.92 million was deposited under this scheme at the end of 2009.
Consumer Credit Scheme
Consumer Credit Scheme is one of the popular areas of collateral-free finance of the Bank. People with limited income can avail of credit facility to buy household goods including computer and other consumer durables. Total exposure under this scheme was BDT 49.83 million at the end of 2009.
Small Loan Scheme
This scheme has been designed especially for the businessmen longing for credit facility for their business and can’t provide tangible securities. Total amount of BDT 15.40 million was deployed under this scheme at the end of 2009.
This scheme has been designed to assist and encourage the genuine and capable entrepreneurs and professionals for acquiring capital machinery, medical equipments, computers, vehicle and other items. Flexibility and term and conditions of this scheme have attracted the potential entrepreneurs to acquire equipments of production and services and repay gradually from earnings on the basis of “Pay as you earn.” Total exposure under this scheme was BDT 356.50 million at the end of 2009.
Doctors’ Credit Scheme
Doctors’ Credit Scheme is designed to facilitate financing to fresh medical graduates and established physicians to acquire medical equipments and set up clinics and hospitals and thereby make the medical facilities upgraded and available to the mass people. BDT 7.06 million was disbursed under this scheme till the end of 2009.
SME Loan Scheme
Small and Medium Enterprise (SME) Loan Scheme has been introduced to provide financial assistance to new or experienced entrepreneurs to invest in small and medium scale industries with a comparatively low rate of interest as the same is assisted by the Bangladesh Bank with refinancing facilities. Exposure under this scheme experienced significant growth of 44.39% and amounting to BDT 983.39 million at 2009 end from that of BDT 681.08 million at the end of 2008.
Personal Loan Scheme
Personal Loan Scheme has been introduced to extend credit facilities to cater the needs of low and middle-income group for any purpose. Government and semi-government officials, employees of autonomous bodies, banks and other financial organizations, multinational companies, reputed private organizations and teachers of recognized public and private schools, colleges and universities are eligible for this loan. Total Loans and Advances under this scheme increased to BDT 364.38 million upto 2009 from that of 279.78 million at the end of 2008.
Car Loan Scheme
Car Loan Scheme has been introduced to enable middle-income people to purchase Cars/SUVs/Jeeps. Government and semi-government officials, employees of autonomous bodies, banks and other financial organizations, multinational companies, reputed private organizations, teachers of recognized public and private universities and businessmen are eligible for this loan. Total amount of BDT 201.98 million was disbursed under this scheme upto December 2009.
Home Loan Scheme
To meet the growing need of housing for middle and lower-middle income people, MBL has introduced Home Loan Scheme. We also support the Bangladesh Bank’s Home Loan Refinance Scheme. The Scheme will also boost up the growth of housing sector. Such loan shall be available for purchase or construction of new apartments for self-residing purpose.
Overseas Employment Loan Scheme
Overseas Employment Loan Scheme is designed to facilitate the Bangladeshi youths seeking employment abroad but unable to meet the expenses to reach the workplace from their own sources. The ultimate objective of the scheme is to promote skilled -skilled manpower to different countries across the world as well as to provide support to Government Policy considering priority of this sector. By availing loan under this scheme, the active youths of middle and lower middle class can get overseas employment by avoiding borrowing from the illustrious class or village ‘mohajon’ at a very high cost or selling their paternal properties. The scheme will also help fetching foreign currency for the country as well as fulfill the Bank’s commitment to encourage Micro-lending for poverty alleviation, improve the quality of life and thereby contribute to socio economic development of the country.
Mercantile Bank Limited
Balance Sheet as at December 31, 2009 & 2010
|PROPERTY AND ASSETS|
|Cash in hand (Including Foreign Currencies)|
|Balance with Bangladesh Bank and Sonali Bank Limited (Including Foreign Currencies)|
|Balance with Other Banks and Financial Institutions|
|Money at Call and Short Notice|
|Loans and Advances|
|Loans, Cash Credit, Overdraft etc.|
|Bills Purchased and Discounted|
|Fixed Assets Including Premises,Furniture and Fixtures|
|LIABILITIES AND CAPITAL|
|Borrowings from other Banks, Financial Institutions and Agents|
|Deposits and other Accounts|
|Current Accounts and Other Accounts|
|Savings Bank Deposits|
|Deposits Under Schemes|
|Capital/ Shareholders’ Equity|
|Surplus in Profit & Loss Account|
|Total Shareholders’ Equity|
|Total Liabilities and Shareholders’ Equity|
|OFF BALANCE SHEET ITEMS|
|Acceptances and Endorsements|
|Letters of Guarantee|
|Irrevocable Letters of Credit|
|Bills for Collection|
|Other Contingent Liabilities|
|Documentary credits and short term trade related transactions|
|Forward assets purchased and forward deposits placed|
|Undrawn note issuance and revolving underwriting facilities|
|Undrawn formal standby facilities, credit lines and other commitments|
|TOTAL OFF-BALANCE SHEET ITEMS INCLUDING CONTINGENT LIABILITIES (A+B)|
Profit and Loss Account
For the year ended December 31, 2009 & 2010
|Less : Interest Paid on Deposits, Borrowings etc.|
|Net Interest Income|
|Commission, Exchange and Brokerage|
|Other Operating Income|
|Total Operating Income|
|Salaries and Allowances|
|Rent, Taxes, Insurance, Electricity, etc.|
|Postage, Stamps, Telecommunication etc.|
|Stationery, Printings, Advertisements etc.|
|Chief Executive’s Salary and Fees|
|Depreciation & Repair of Fixed Assets|
|Total Operating Expenses|
|Profit before Provision|
|Provision against Classified Loans|
|Provision against Unclassified Loans|
|Total Profit before Taxes|
|Provision for Taxation|
|Net Profit after Taxation|
|Retained Surplus brought forward from previous year|
|Earning Per Share (EPS)|
Corporate Social Responsibility
Business for Social Responsibility (America’s largest organization devoted to CSR)
Business decision making linked to ethical values, compliance with legal requirements, and respect for people, communities, and the environment around the world.
Prince of Wales Business Leaders Forum
Open and transparent business practices that are based on ethical values and respect for employees, communities, and the environment. It is designed to deliver sustainable value to society at large, as well as to shareholders.
A concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment.
Historical definitions of CSR
While the term CSR may appear to be relatively new to the corporate world, the literature reveals that the evolution of the concept itself has taken place over several decades. The fact that the terminology itself has changed over this time also suggests that the meaning ascribed to concepts such as CSR will continue to evolve in tune with business, political and social developments. The impact of globalizations and mass communication also means that while definitions will reflect local situations, they will also be strongly influenced by global trends and changes in international law.
1920s – 1950s
It has been suggested by Windsor that ‘business leaders have since the 1920s widely adhered to some conception of responsibility and responsiveness practices’ (Windsor 2001, p. 229). Others have argued that the genesis of CSR was in the 1930s with the debate between AA Berle and E Merrick Dodd over the role of managers (Post 2003 ; Turner 2006). Merrick Dodd contended ‘that the powers of corporate management are held in trust for the entire community’ (Boatright in Post 2003, p. 31). In 1953, Bowen conceptualised CSR as social obligation – the obligation ‘to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society’ (Bowen in Maignan & Ferrell 2004, p. 4). Carroll has described Bowen as the modern ‘Father of Corporate Social Responsibility’ and believes that his work marks the beginning of the modern period of literature on CSR. (Carroll 1999, p. 270) Bowen took a broad approach to business responsibilities, including responsiveness, stewardship, social audit, corporate citizenship and rudimentary stakeholder theory. (Windsor 2001, p. 230)
Peter Drucker was one of the first to explicitly address CSR, including public responsibility as one of the eight key areas for business objectives developed in his 1954 book, The Practice of Management. While Drucker believed that management’s first responsibility to society involved making a profit, ‘he felt it was also most important that management consider the impact of every business policy and action upon society’ (Joyner & Payne 2002, p. 302).
The literature of the 1990s has not so much expanded the definition of CSR, but used the CSR concept ‘as the base point, building block, or point-of-departure for other related concepts and themes, many of which embraced CSR-thinking and were quite compatible with it. CSP, stakeholder-theory, business ethics theory, and corporate citizenship were the major themes that took center stage in the 1990s’. (Carroll 1999, p. 288)
An important contribution to the literature was made by Wood in 1991 when she revisited the CSP model and ‘placed CSR into a broader context than just a stand-alone definition. An important emphasis in her model was on outcomes or performance’. (Carroll 1999, p. 289) The CSP framework developed by Wood and the pyramid of responsibilities developed by Carroll, with economic responsibilities at the base and philanthropy at the apex, are discussed in depth in the literature, including Carroll (1999) and Windsor (2001).
Swanson (1995) suggested that there were three main types of motivation for CSR:
i. The utilitarian perspective (an instrument to help achieve performance objectives);
ii. The negative duty approach (compulsion to adopt socially responsible initiatives to appease stakeholders); and
iii. The positive duty view (businesses self-motivated regardless of social pressures) (Swanson in Maignan & Ralston 2002).
Wood also identified three main types of processes used by businesses to implement their CSR motivational principles: environmental management, issues management and stakeholder management. ‘Once implemented throughout the organization, these processes help the firm to keep abreast of, and to address successfully, stakeholder demands’ (Wood in Maignan & Ralston 2002). However, this may be a somewhat simplistic view of CSR and relationships with stakeholders. It is also a view that was overtaken in the 90s by a broadening discussion of the concept of stakeholder, and whether ‘the first priority of a corporation is to its shareholders’ (Nahan in Ryan, 2002) or whether policymakers should develop ‘a flexible multistakeholder approach to promoting CSR’, as Aaronson suggests has occurred in Britain in response to concern about global corporate responsibility (Aaronson 2003, p. 312).
Even within the group that O’Rourke has described as the ‘primary’ stakeholders – the shareholders – ‘the boundary zone of CSR is currently being negotiated’ with companies (O’Rourke 2003, p. 228). O’Rourke writes that:
A trend also noteworthy in the late 1990s was that of shareholder activists linking their environmental or social issue to financial performance and/or risks faced by the company. By claiming that environmental and social issues have a direct effect on shareholder value, shareholder activists are moving the rhetoric of their activism out of the realm of “ethics” or good versus bad behaviour, and into that of traditional issues of profitability, risk and shareholder value. (O’Rourke 2003, p. 230).
An example of shareholder activism is the group BHP Shareholders for Social Responsibility, which was formed in 1994 as a result of shareholder concerns about environmental damage done by the company in Papua New Guinea. The group has concerns about environmental, social and economic issues and has actively engaged BHP Billiton management about its concerns (BHP Shareholders for Social Responsibility). Similar advocacy groups have been formed in Australia for shareholders of Boral Green, Gunns, and PaperlinX.
Global influences on CSR continued in the 1990s as the roles of business and government continued to blur. In 1997, Solomon wrote that ‘now that businesses are often the most powerful institutions in the world, the expanse of social responsibility has enlarged to include areas formerly considered the domain of governments…The more powerful business becomes in the world, the more responsibility for the well-being of the world it will be expected to bear’ .(Solomon in Joyner & Payne 2002, p. 303)
Writing in 1999, as the new millennium approached, Carroll suggested that, ‘the CSR concept will remain as an essential part of the business language and practice, because it is a vital underpinning to many of the other theories and is continually consistent with what the public expects of the business community today’. (Carroll 1999, p. 292)
Corporate Social Responsibility in the 21st Century
If the issue of CSR came to public prominence as a result of highly-publicised events such as the collapse of Enron and the James Hardie asbestos scandal in Australia, how have these concerns been addressed in the literature of the new century? The debate about the place of CSR in the global economy continues, with writers such as Scherer and Smid echoing Solomon’s opinion that multinational corporations ‘should take responsibility for the improvement of world-wide social and environmental conditions’. (Scherer and Smid in Windsor 2001, p. 245) Windsor takes this point further by investigating examples of Western oil production projects currently operating in a number of war-torn, impoverished African states that are noted for corruption and human rights abuse. James Buckee, the CEO of one of these companies, is quoted as saying that ‘it is socially responsible for a corporation to invest in certain places that some elements of popular opinion find objectionable’. (Buckee in Windsor 2001, p. 246) Clearly this illustrates Windsor’s conclusion that ‘There are fundamental differences of opinions and values in the global economy’. (Windsor 2001, p. 246) Oketch’s simplistic contention that ‘there is need to ensure that the global market operates according to a certain set of rules and institutions that a majority of people see as being legitimate’ raises more questions than it answers. (Oketch 2004, p. 18)
Corporate Social Responsibility in Australia
While Australia is a relative latecomer to the discussion about CSR, the corporate sector, particularly in the resources field, has shown its commitment for more than a decade, and many of the major companies regularly report their activity. The extensive body of literature on CSR is now beginning to see the results of Australian studies undertaken in recent years.
A common theme in the Australian literature is the need for corporations to move away from the ‘pat-a-poor-person’ philanthropic approach to CSR towards a broad, holistic approach in which the philosophy of CSR becomes part of core business. (Duncan & Richardson 2005; Schwartz 2005) In a survey of the top 100 companies in Australia in 2001, Zappala and Cronin examined the extent and nature of corporate community involvement (CCI). They found that the most predominant form of corporate-community partnership was cash donations rather than true partnerships with a long-term, co-operative and holistic base. “So, although some companies speak of a new style of CCI, practice still needs to evolve” (G Zappala & Cronin 2003).
In 2006, the Parliamentary Joint Committee on Corporations and Financial Services undertook an inquiry, Corporate Responsibility: Managing risk and creating value. The Committee recognised that ‘Corporate responsibility is emerging as an issue of critical importance in Australia’s business community’ and sought to examine this more fully by inviting submissions and receiving evidence in a series of public hearings.(Parliamentary Joint Committee on Corporations and Financial Services 2006, p. xiii)
Of the Committee’s final 29 recommendations, many were in the form of encouragement or suggestions, and commendations for the increasing work being undertaken by Australian organisations in terms of CSR. However, probably the most important for the business sector were Recommendation 1, that there is no need to amend the Corporations Act 2001 regarding directors’ duties, and Recommendation 5, that sustainability reporting in Australia should remain voluntary. The Committee’s view was that ‘mandatory approaches to regulating director’s duties and to sustainability reporting are not appropriate’, despite its acknowledgment that ‘corporate Australia lags behind many other developed countries in its rate of sustainability reporting (Parliamentary Joint Committee on Corporations and Financial Services 2006, p. 104) It has been suggested that while the Committee’s 15 report has been well received by business groups (Allens Arthur Robinson 2006 ; Anonymous 2006b), CSR interest groups believe that though a positive step, it does not go far enough. (Allens Arthur Robinson 2006)
While the Parliamentary inquiry is significant in that it provided an opportunity for public discussion about a wide range of CSR issues, it remains to be seen what long-term impact it will have on business and the community in Australia. One corporate observer has commented that the inquiry ‘has attracted little attention despite several recent high-profile corporate collapses and scandals’ (Allens Arthur Robinson 2006). Others have pointed out that the Committee appeared ‘to be making one core assumption: that corporations will start to act in socially and environmentally responsible ways as this is likely to lead to long-term growth of the enterprise’ (Mathewson & Standen 2006). The authors also suggest that perhaps the Committee should ‘reassess these issues within five years, as perhaps at that stage Australia will be ready to take the next steps in relation to sustainability’ (Mathewson & Standen 2006). As the Committee’s report was only released in June 2006, in-depth analysis of the report and its implications in the literature is still limited. However, two issues which could perhaps be debated further are whether the Committee’s ‘core assumption’ is correct, and whether Australia can afford to wait five years before advancing to the next step of CSR.
CSR Applications -The Context of Bangladesh
CSR concepts and practices in Bangladesh have a long history of philanthropic activities from the time immemorial. These philanthropic activities included donations to different charitable organizations, poor people and religious institutions. Till now, most of the businesses in Bangladesh are family owned and first generation businesses. They are involved in the community development work in the form of charity without having any definite policy regarding the expenses or any concrete motive regarding financial gains in many instances. Moreover, most of the SMEs fall under the informal sector having low management structure and resources to address the social and environmental issues. These limitations drive the top management of local companies to think only about the profit maximization rather than doing business considering the triple bottom line: profit, planet and people (CSR definition of Lotus Holdings). The discussions on CSR practices in Bangladesh in its modern global terms, are relatively new, but not so for the concept itself. Because, being a part of the global market, it is difficult to ignore CSR standard specifically in the export sector. In general, it is true that in Bangladesh, the status of labor rights practices, environmental management and transparency in corporate governance are not satisfactory, largely due to poor enforcement of existing laws and inadequate pressure from civil society and interest groups like Consumer Forums. Globally, as CSR practices are gradually being integrated into international business practices and hence is becoming one of the determining factors for market accesses, it is becoming equally instrumental for local acceptability . A focus on CSR in Bangladesh would be useful, not only for improving corporate governance, labor rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialization and ensuring global market access. Since, CSR entails working with stakeholders it is important to work from within and diagnose the stakeholders; concerns so that CSR is truly embedded in the companies. By now, many CSR dimensions are practiced in Bangladesh. The SMEs largely depend upon export. The US and EU buyers set guidelines to RMG industry to ensure the standards. The 1992 Hrkin’s Bill and subsequent consumer and industry boycott of RMG products by USA and the consequent remedial moves by local RMG sector is one example. Moreover, some buyers from EU visited the sites of recently collapsed garments factories. A temporary ban was also imposed on Shrimp export to the EU on health and hygienic standard and appropriate remedial action followed in that instance too. But, some of the exporters found difficulty in convincing the US/EU buyers to have positive attitude towards Bangladesh due to inadequate CSR practices,
Lack of enforcement of Industrial Laws and Regulations, weak unions, absence of consumer rights groups and high level of corruption within the regulatory bodies make CSR violation rampant in Bangladesh. Two most significant foreign exchange sources is the RMG sector and the overseas manpower export. Unbelievably low compensation, working hours, health/hygiene/sanitation conditions, fire safety and various types of abuse are so common and to the extent of inhumanity that wild shock any conscientious individual to the core. Recently, the RMG sector employees have embarked on a industry wide movement to establish their rights.
Overseas workers are mostly exploited by recruiting agencies whereas these rural and mostly illiterate people have to sell all their belongings becoming paupers of lend money at very high interest. Owing to cheating by the recruiters and unlawful behavior by the overseas employers, many of them get compelled to come back as beggars, some after long confinement in overseas jails. Hardly any remedy is available from the law enforcing agencies.
Many industrial units run with half-century old machinery producing fatal air, soil and water pollutions. More modern factories also don’t care to install Effluent Treatment Plants.
Starting from FMCGs, vegetables, fruits and all other conveyable goods, adulteration, abnormal ripening at times with poisonous elements, keeping fish fresh with applying deadly Formalin and all other malpractice is rampant and carefree. Good Governance and efficient law enforcing agencies can only solve these plights.
The National Board of Revenue (NBR) CSR Rules:
The National Board of Revenue (NBR) is yet to receive any application seeking tax benefit for Corporate Social Responsibility (CSR) activities so far this fiscal year (FY) even though the government expanded the areas of CSR for tax relief in the budget for FY 2010-11, officials said.
The government had offered special tax benefit for companies on deployment of funds for public welfare-oriented activities under its CSR scheme but it failed to attract big corporate houses as none of them applied for availing the facility in the last two years.
Under the facility, corporate bodies could get 10 per cent tax benefit on the amount of fund spent on CSR activities. Companies have to take prior permission from the NBR before utilizing funds for CSR activities.
Prospects and Future of CSR in Bangladesh
Bangladesh is a developing country. Because of global competitiveness and demand, the CSR practices and standards are being implemented in Bangladesh. But we are yet go a long way. There are challenges to implement CSR properly in Bangladesh. Ultimately CSR practices should be better practiced in Bangladesh for better and enhanced performance. In the publication “Good Governance and Market-Based Reforms: A Study of Bangladesh, Fara Azmat and Ken Coghill relates Good Governance with CSR by discussing the good governance indicators of regulatory quality, rule of law and control of corruption in the context of Bangladesh and analyses how lack of good governance indicators affects the success and sustainability of reforms and contributes to the lack of business ethics and CSR in Bangladesh.
Good Governance and CSR in Bangladesh
CSR has been defined in general terms as ‘the obligation of the firm to use its resources in ways to benefit society, through committed participation as a member of society, taking into account the society at large and improving the welfare of society at large independent of direct gains of the company’ (Weile et al., 2001: 288). In this article, CSR, as related to the problems of the agricultural input sector of Bangladesh, is used to explain the need of the businesses to be socially responsible and focus on economic, social, legal, ethical and environmental issues. Farmers are being cheated into buying underweight, low quality inputs sometimes at higher prices, which do not benefit yields. The contaminated inputs also cause damage to soil fertility, which eventually results in decreased yields. While the economic aspect is represented by the resultant effect of a price hike on the farmers, the social impact is due to the decrease in farmers’ income. The legal and ethical components are represented by the private sector not complying with the laws and rules and not meeting the obligations placed on them by the state and the society. Finally, the environmental consideration is also important because of the effect of contaminated and unbalanced inputs on the soil and on soil fertility.
As discussed above, lack of effective good governance in Bangladesh has resulted significantly in lack of business ethics and poor CSR culture. According to Wilson (cited in McIntosh and Thomas, 2002: 7), the key idea behind CSR and corporate citizenship is that responsible behavior makes good business sense. In Bangladesh the private sector seems to focus on earning profits in the short term, ignoring the issue of responsible behavior and the desirability of earning the trust of consumers which are important for the long-run success of their operations. The incidence of selling adulterated low quality products at high prices and with underweight and above all, hoarding to reap dishonest profit, all confirm this. In the absence of a socially responsible behaviour in the private sector, there is need to enhance capacity-building on the part of the state to intervene and implement sanctions effectively to enforce compliance. CSR does not develop and is not sustained independently of the context in which business operates. Importantly, the context includes the legal infrastructure created by the state and the enforcement effort imposed by the state. In the absence of an effective state intervention in the public interest, private entrepreneurs are less constrained to behave in the public interest and in conformity with CSR. Thus lack of capacity or lack of will, or both, by the state weakens the incentives for private sector entrepreneurs to practice CSR.
In addition, private sector entrepreneurs lack expertise and are not efficient and competent enough to take advantage of the open economy. The government has recognized the need for educating the private sector and is undertaking some programmes. However, this is not done on a large scale and nor is the potential exploited sufficiently for NGOs to be involved to educate the private sector on business ethics and issues of corporate social responsibility.
CSR Perceptions of Business Community in Bangladesh
AT a Roundtable organized by CSR Center of Bangladesh Enterprise Institute, held on Thursday, 23 February, 2006, speakers identified dearth of expertise, poor accountability as major obstacles to obstacles to practicing CSR in Bangladesh. They elaborated that lack of expertise and poor accountability of corporate houses are obstacles to implementation of CSR in Bangladesh. The speakers also said many CSR activities by Bangladeshi corporate houses are centered mainly around publicity and short-term implications. The BEI roundtable on CSR titled ‘Corporate Social Responsibility Practices and Challenges in Bangladesh’ was a part of its ‘Dialogue Series on CSR in Action’.
Sanjiv S Mehta, chairman and managing director of Unilever Bangladesh Ltd, Mohammad Abu Musa, deputy managing director of Dhaka Bank Ltd, and Mohin Khan, executive assistant (Board Affairs) of BRAC, spoke at the discussion.
BEI President Farooq Sobhan said corporate entities should understand what CSR is and
why it is important. The private sector enterprises will remain weak unless and until they practice CSR in their ventures, the BEI president said, adding that when it comes to adopting good corporate governance, Bangladeshi companies are lagging far behind those in India, Pakistan and Sri Lanka. “Properly implemented CSR programmes help the companies meet legal and societal expectations and benefit governments, employees, citizens and businesses,” noted Farooq. On the other hand, poorly implemented CSR programmes are nothing but public relations exercises, he mentioned.
Representatives of Unilever Bangladesh, Dhaka Bank and BRAC briefed the roundtable about their CSR activities. Around 20 high-level executives from local and international corporate houses and donor agencies participated in the roundtable.
CSR Activities of Some CBs in Bangladesh
CSR Activities of Dutch-Bangla Bank Ltd.
DBBL as a responsible corporate citizen is fully aware of its responsibilities about how its operational activities impact its stakeholders, the economy, the society, its staff and the environment. Conducting business in an ethical way, creating opportunities for business and economic growth, empowering people to fulfill their aspirations, ensuring protection of environment while financing businesses and supporting the distressed people of the society are at the heart of corporate social responsibility policy of DBBL. In DBBL, they take this responsibility and believe that responsible conducts are directly correlated with economic and social development of the country.
Contribution to economy
Primarily DBBL business strategies are based on goodwill and trust of the customers and other stakeholders. Their CSR programs help strengthen this trust. DBBL conducts its activities in a responsible way to maximize value for its customers, stakeholders and the economy.
Making technology affordable for masses to facilitate seamless transaction and socio-economic development
DBBL being the most technologically advanced Bank has established the largest ATM network of the country with a huge investment which is not at all financially rewarding. Yet DBBL has taken these initiatives as part of its CSR programs to reach the benefits to the customers enabling them to make seamless transaction 24 hours a day across the country. To widen and spread the benefit of the ATM network DBBL is allowing customers of other banks to use the ATMs at nominal cost. DBBL is committed to spread the network even further to maximize socio-economic benefits of the country though it is not cost-effective for the Bank.
Commitment to rural area and supporting SMEs
DBBL has opened 5 SME centers in rural areas to support SMEs and to bring relatively low income group under financial intermediation to help them become self-reliant and unleash the potential of economic growth in rural area. The centers also facilitate quick transfer of fund from home and abroad to rural people through ATMs at free of cost.
Taking responsibility to protect the environment
DBBL complies with environmental standard while financing industrial projects. Projects with likely adverse impact on environment are strongly discouraged by DBBL. We are trying to incorporate sound environmental management process in business operations of projects financed by us that can ensure healthy and sustainable enviornment for our future generations. DBBL introduced a guideline demanding assessment of environmental and social impacts of the projects to ensure that operations of the projects would be eco-friendly.
DBBL has financed CNG refueling stations and CNG run public transports under Dhaka Clean Fuel Project
DBBL has financed 13 CNG refueling stations and 60 public transports under Dhaka Clean Fuel Project with refinancing from Rupantarita Prakritik Gas Company Limited.
DBBL has sanctioned first waste recycling project of the country
The Bank has snctioned EURO 2.0 million in equivalent BDT to finance country’s first ever and World’s first waste recycling based Clean Development Mechanism Project. A EURO 12.0 million joint-venture project, WWR Bio Fertilizer Bangladesh Limited involves cross border financing from FMO and High Tide of the Netherlands. When implemented, the project would recycle the city’s waste into fertilizer and generate CER through carbon trading.
Employees-unleashing the hidden potential
Human resource is the most valuable assets of DBBL. Accordingly how human resource is recruited, trained, developed & motivated has far reaching implication on long-term sustainable growth of the Bank. Customers‟ perception and satisfaction ultimately determine relative or absolute success or failure of an organization. In turn we need a competent, well trained, committed and motivated team of human resources with positive and sincere attitude towards customers that can build, maintain and strengthen trust and confidence in our customers that is crucial for our success. Accordingly, the Bank’s strategy is to attract, retain and motivate the most talented people in the industry. The Bank’s policy is to look after people who want to make a long-term career with the Bank.
DBBL attaches utmost importance to the development of its employees through continuous training so that DBBL executives can have competitive advantage in the market. The training need of individual employees including training need for introducing new products, services and technology is evaluated on a continuous and systematic way. DBBL executives are encouraged to attend high quality training at home and abroad to develop and broaden existing knowledge and skills and to acquire new skills and expertise.
We imparted training to 528 officers in 68 different courses during 2009. The training programs were organized by our own training institute. We also nominated 75 executives/officers to undergo different training programs/courses arranged by different organizations like BIBM, Bangladesh Bank Training Academy (BBTA) and other similar organizations. In addition, 12 executives/officers were sent abroad for attending overseas training and workshop.
Supporting the Society at large
Since inception, as a responsible corporate body, Dutch-Bangla Bank Limited has been playing a pioneering role in implementing social and philanthropic programs to help disadvantaged people of the society. A number of sectors are on the priority list of the Bank. Education, health-care, rehabilitation of distressed people and such other programs to redress human sufferings and to improve quality of life are some of the important areas where the Bank carries out its social and philanthropic activities.
Brief description of CSR activities of DBBL directed toward the various sectors in 2009 & 2010 is given below:
Education is a pre-requisite for the overall development of the country. Keeping this view in mind, Dutch-Bangla Bank Limited has been giving priority to assist the education sector by providing Scholarship, Fellowship, infrastructural development etc. some of which are enumerated below:
i). HSC level: Dutch-Bangla Bank Limited awards new scholarships every year for the meritorious and needy students of this level along with the continuation of existing awardees. The students, who have been studying at H.S.C. level after passing S.S.C. examination in the current year, are eligible to apply for scholarship of this level. The scholarships are renewable for the entire academic period of H.S.C. level. Already 853 scholarships have been awarded in this level of which 108 new scholarships were awarded in the year 2010.
ii). Graduation level: Every year DBBL awards new scholarships for the meritorious and needy students of this level along with the continuation of existing awardees. The students, who have been studying at graduation level after passing H.S.C. examination in the current year, are eligible to apply for scholarship of this level. The scholarships are renewable for the entire academic period of graduation level. Already 993 scholarships have been awarded in this level of which 114 new scholarships were awarded in the year 2010.
Under this program a scholarship awardee is provided with the following benefits:
|Sl#||Level of Study||Duration of Scholarship||Amount of Scholarship per month(tk)||One time grant annually for purchasing books||Total Grant per year for each awarded(tk)|
|1||H.S.C Level||2 Years||1000||2500||14500|
|2||Graduation Level||2-5 Years||2000||5000||29000|
2. Fellowship Program
Dutch-Bangla Bank Limited has been awarding fellowship for pursuing M.Phil, Doctoral & Post Doctoral degree since 2006. This fellowship is awarded to those researchers engaged in research in various fields like Social, Biological, Medical, Agricultural and Natural Sciences and also Engineering at different public universities of Bangladesh in M.Phil., Ph.D. & Post Doctoral Levels. Every year fellowships are awarded to the researchers for the entire period of research work as required by the university curriculum. Already 159 fellowships have been awarded. Under this program a fellowship awardee is provided with the following benefits:
|Sl#||Level of Study||Amount of Fellowship per month(Taka)||Total Grant per year for each awaedee (taka)|
3. Educational Infrastructural Development
- DBBL donates taka 24,700,000 to EKMATTRA society for establishing a fully residential academy at Haluaghat under Mymensingh district for the disadvantaged children.
- DBBL donated taka 19,889,933 to BSMMU for complete repair and renovation of the auditorium.
- DBBL donated taka 200,000 to Najirpur Pragati Maddayamik Biddalaya for reconstruction of the school building.
- DBBL donated taka 200,000 to RangpurMedicalCollegePublic School for construction of the school building.
- DBBL donated taka 100,000 to SenaShohayakSchool, Bogra to purchase necessary equipment for smoothly running the activities of the school.
- DBBL donated taka 100,000 to DaraniparaHigh School, Tangail to purchase necessary equipment for the vocational trade courses for underprivileged students.
- DBBL donated taka 200,000 to R.C.C.IPublic School, Rangpur.
- Taka 50,000 was donated to Begum Shahida Molla Brahmongaon Meftahul Jannath Shishu Sadan, Gazipur.
- DBBL provides 10 computers at a cost of taka 362,200 to Dhaka Cantt. GirlsSchool and College and 3 computers at a cost of taka 79,050 to KabiNazrulHigh School, Manikganj.
4. Other Activities to Facilitating Education
- Donation of taka 200,000 was made to Mohammad Abdul Kayyum, National Franchise/ Country Director, UCMAS Bangladesh Inc.
- Donation of taka 490,000 was made to Dr. Ayesha Begum, Professor, Dept. of Islamic History and Culture, University of Dhaka.
- Donation of taka 300,000 was made to SherinJahanMemorialGirlsHigh School.
5. Dutch-Bangla Bank-Prothom Alo Gaint Utasb
DBBL has been sponsoring this prestigious Ganit Utsab for the last six years. In 2010 taka 4,700,000 was given for Ganit Utsab.
1. Smile Brighter program for cleft-lip patients
Cleft-lip is far more a social set back than a health problem. Boys and girls cursed with cleft-lips face numerous problems in everyday life ranging from disruption of formal education, attending social ceremonies and impediment at the time of getting married. Considering the gravity of the situation, DBBL has taken the initiative to bring back smile on the face of the boys and girls with cleft-lip through plastic surgery at free of cost since 2003. More than 4,710 numbers of poor cleft-lipped boys & girls have so far been successfully operated upon across the country under the “Smile Brighter” banner. Besides, special camps were arranged under this
‘Smile Brighter’ program in Dhaka, Savar, Tangail, Mymensingh, Kishoregonj, Sirajgonj, Pabna, Rajshahi, Naogaon, Bogra, Rangpur, Dinajpur, Lalmonirhat, Sylhet, Comilla, Noakhali, Feni, Chittagong, Cox’sBazar, Faridpur, Khulna, Jessore, Kustia, Shatkhira, Barisal, Bhola, etc. As a continuous process, the cleft-lipped boys & girls are being treated across the country for restoration of hope and dignity in their lives.
2. Cataract operation for underprivileged blind people
Visual impairment is an immense social problem in our country. Cataract is the major cause of blindness. 80% of the affected people can resume vision through cataract operation. A large number of rural poor people are deprived of the opportunity to cure the problem. Keeping their sufferings in mind, Dutch-Bangla Bank Foundation started the program of operating 12,000 underprivileged blind people by providing sophisticated cataract surgery (Intra Ocular Lens) throughout the country in phases since 2008. Up to the year 2009, about 1,750 cataract operations have been completed successfully in different regions of the country. In 2010 another 200 operation were done.
3. Medi-Care Services for the rural people
DBBL has established RuralMedi-CareServiceCenter at its rural branches of Shimrail, Dania, Gazipur Chowrasta, Board Bazar, Savar Bazar, Baburhat, Patherhat and Hathazari Branch to render free medical services to the rural and destitute people of the adjoining areas especially for the women and children.
4. Health Infrastructure development
4.1. Donation to OGSB Hospital
Obstetrical and Gynaecological Society of Bangladesh (OGSB) is working with poorest of the poor women and children of our country. They have established a four storied Hospital having 20,000 sq. ft. in each floor along with an academic Institute at Mirpur, Dhaka. To meet the increasing demand for services for women and children, the OGSB authority has planned to construct another floor (4th floor, measuring 20,000 sq. ft.) of the hospital which will be solely used for neonatal care for the sick and vulnerable children. Financial support of Taka 20,000,000 was approved in favour of OGSBHospital and Institute of Reproductive & Child Health, Mirpur, Dhaka for construction of 4th floor of the above mentioned OGSBHospital at Mirpur, Dhaka.
4.2. Donation to ICDDR, B
There is now growing concern about blood safety, equitable access to safe blood and blood products and their safe and rational use in the third world countries. According to the recommendations of WHO, the Bangladesh Government has initiated a strategy to make provision for safe blood transfusion in order to contain the transmission cycle of transfusion associated infections. In this connection, ICDDR, B authority has planned to set up an international standard blood transfusion unit. The Board of Trustees of DBBF approved financial support of Taka 11,476,800 to ICDDR, B Dhaka for setting up of the blood bank with all modern facilities of international standard.
4.3. Donating 03 (three) Baby Warmer costing Taka 159,900 to Paediatrics Department, Dhaka Medical College Hospital, for treatment of under weight neonatal patients.
4.4. Donating a PC-less multimedia projector costing Taka 61,000 to Department of Paediatrics, Bangabandhu SheikhMujibMedicalUniversity, Dhaka for better dissemination of knowledge.
4.5. Donating a PC-less multimedia projector costing Taka 61,000 to Department of Paediatric Gastroenterology & Nutrition, Bangabandhu SheikhMujibMedicalUniversity, Dhaka for better dissemination of knowledge.
5. Donation for medical treatment
5.1. Financial assistance of Taka 100,000 to Md. Abul Kalam, of Comilla, for operative treatment of his son.
5.2. Financial assistance of Taka 100,000 to Bir Sresthho Matiur Rahman Foundation for providing free health services to poor freedom fighters and their school going children.
5.3. Financial assistance of Taka 50,000 to Nahid Anjum, for treatment of cancer.
5.4. Financial assistance of Taka 15,185 to Putul Biswas, of Department of Development Studies, DhakaUniversity, for treatment of her father.
5.5Donation of ambulance to Mosabbir Cancer Care Centre
Dutch-Bangla Bank has donated an ambulance at a cost of Taka 1,760,000 (Taka one million seven hundred sixty thousand) only to Mosabbir Cancer Care Centre for it’s Palliative Cancer Care unit. The center is working with the goal to relieve sufferings and to improve quality of life for people facing serious and complex life limiting illness due to cancer at any stage of their disease.
5.6 Donation of ambulance to BAU medical center
Dutch-Bangla Bank has donated an ambulance at a cost of Taka 1,576,000 (Taka one million five hundred seventy six thousand) only to the medical center of Bangladesh Agricultural University (BAU) with a view to providing better health care facilities to the students, teachers and staff of the university.
Contribution to Disaster Management
Support program to the victims of Natural Calamities
Dutch-Bangla Bank Limited (DBBL) stands by the distressed people at the time when natural calamities like cyclone, flood, tornado, land slide, river erosion, devastating fire etc. occur. DBBL provides support to the affected people in cash and kind for their rehabilitation. The donation in kind includes food, medicine, water purifying tablets, blankets, GCI sheets etc. Contribution of DBBL in this sector in 2010 given below:
DBBL stands by the victims of Nimtoli Fire & Begunbari building collapse
DBBL donated Taka 2,500,000 (Taka two million five hundred thousand) only
favouring ‘Prime Minister’s Relief and Welfare Fund’ as financial assistance to the bereaved family members of the victims of the devastating blaze at Nimtali and building collapse at Begunbari in Dhaka.
Donation on different issues
Donation to Bangabandhu Memorial Trust Fund
Jatir Janok Bangabandhu Sheikh Mujibur Rahman Memorial Trust was created in 1994 by the surviving heirs of Bangabandhu Sheikh Mujibur Rahman & Begum Fazilatunnessa Mujib. The Memorial Trust needs sufficient fund to set up, maintain and run a MemorialMuseum on the life and activities of Bangabandhu Sheikh Mujibur Rahman and to initiate and continue other philanthropic activities. Dutch-Bangla Bank has donated Taka 20,000,000 (Taka twenty million) only to Bangabandhu Memorial Trust to fulfil its objectives.
Donation to Liberation War museum
Liberation war museum (Muktijuddha Jadughar) is an archive of our glorious liberation war. The museum authority has taken a project to rebuild and modernize it with all latest technological facilities for collecting, preserving and displaying the historic documents. Dutch- Bangla Bank appreciates this noble initiative and provided financial assistance of Taka 5,000,000 (Taka five million) only to ‘Muktijuddha Jadughar Nirman’ project.
Contribution in Sports sector
Sponsoring 11th South Asian Games
DBBL sponsored the prestigious ’11th South Asian Games Dhaka 2010′ which was held in Dhaka during January 29, 2010 to February 09, 2010. It was the largest sporting event in South Asia where 8 nations of South Asia participated. The games were viewed by more than a billion people worldwide.
CSR Activities of Southeast Bank Ltd.
Southeast Bank’s banking practice is based on a network of relationship with its employees, customers, suppliers, business associates, shareholders, regulatory authorities and the community. The Bank’s corporate social responsibility is about addressing the needs of all the stakeholders in a way that advances its business and makes a positive and meaningful contribution to the society.
The Bank’s business is dynamic and growing. This dynamism and growth comes from its skilled and experienced human resource that can be found at every level of the organization. The Bank offers its employees very competitive pay package and bonus that are reviewed on a continuous basis in line with the market dynamics. It provides the employees a safe and congenial work environment. It also offers its employees handsome retirement benefits by way of Contributory Provident Fund, Gratuity, Superannuation benefits, etc. As a consequence, Southeast Bank has emerged as a Bank with a vision; workplace of choice of many. The Bank’s rapid growth in business presents opportunities for talented employees to take added responsibilities. The employees follow the ethical and other codes of conduct as embodied in the Service Rules and Regulations of the Bank.
The need to focus on the need of customers is fundamental to banking business. Southeast bank discharges this vital responsibility by offering financial products and services that truly meet their needs. In discharging this vital responsibility, the Bank always strives to maintain the highest standard of ethics in the conduct of its business. The Bank feels proud that these efforts have earned it the trust of the customers. This trust in turn motivates the Bank to carry out every single transaction with the customers with the highest degree of commitment and transparency without any hidden cost. The Bank looks upon the customers as its partners in business and sincerely endeavours to improve its relationshipwith them for mutual benefit.
The Southeast bank is fully committed to protect the interest of its shareholders. Their constructive suggestions are implemented for the betterment of the company. It releases enough disclosures for the information of the shareholders in the Annual Reports, half-yearly financial statements, the print and electronic media and in the Bank’s website. It always endeavours to enhance shareholders value by optimizing financial performance at least cost. Since inception, the Bank has paid good dividends to the shareholders. The number of shareholders of the Bank is increasing that testifies their unshakable trust in the Bank.
The Bank’s Business Associates
The Bank continuously endeavours to create a long-lasting win-win relationship with its suppliers and business associates for mutual growth. Its relationship with them is based on mutual trust and respect. It deals with them in a fair and transparent way. Southeast Bank enjoys credit lines from Correspondents and Foreign Banks and special credit line from ADB and IFC.
The Bank continuously strives to ensure that its operations are environment-friendly and discourages financing projects contrary to it. It has extended its helping hands to initiatives of community leaders for environment protection and development. It is one of the leading participants in the beautification of DhakaCity. The beautification of the roadisland from Russell Square to Manik Miah Avenue was done by the Southeast Bank.
Southeast bank firmly believes that it is imperative to comply with the relevant laws, rules and regulations of all regulatory authorities to be a responsible corporate citizen. The Bank’s business practices are transparent and are appreciated by the regulators. The Bank operates cautiously observing the anti-money laundering practices.
Southeast Bank works to promote good community relations to foster a relationship of understanding, trust and credibility. It has a long history of support for charitable causes. In 2009, Southeast Bank has spent Tk.24.75 million as donations for education, sports, art, culture, health-care, community development, relief operations etc. and 2010 they donated tk. 2.37 million.
Our credit policy has been redesigned to avoid concentration of Bank’s credit in major cities and to encourage distribution of credit in priority sectors particularly in Agriculture and SMEs.
A senseless killings of valiant army officers was committed by the misguided BDR personnel at BDR Headquarters, Peelkhana, Dhaka on February 25, 2009. It widowed and orphaned innocent people and catapulted the affected families in distress and uncertainty. Southeast Bank pioneered and propagated an idea to stand by the affected families which won it wide appreciation at different levels.
In accordance with our devised formula, the Bank, in collaboration with the Government of Bangladesh, selected the following 7 (seven) bereaved families of the Shaheed Army Officers who embraced martyrdom at the carnage at BDR Headquarters to stand by them. Each family is being given Tk.40,000.00 (Forty Thousand) only per month totaling Tk.4,80,000.00 (Four Lac Eighty Thousand) only in a year and the contribution will continue for 10 (ten) years.
|Sl. No||Name of the Shaeed Army Officers||Monthly Contribution||Yearly Contribution||Widow of Shaeed Army Officers|
|1||BA 1892 Brig. General Md. Abdul Bari||Tk. 40,000.00||Tk. 480,000.00||Ms. Farhana Bari|
|2||BA 1480 Col.Md. Mojibul Huq||Tk. 40,000.00||Tk. 480,000.00||Ms. Nehrin Ferdousi|
|3||BA 2324 Col. Mohammad Mashiur Rahman||Tk.40,000.00||Tk.480,000.00||Ms. Zobaida Begum|
|4||BA 2409 Col. Kudrat Elahi Rahman Shafiq||Tk.40,000.00||Tk.480,000.00||Ms. Loby Rahman|
|5||BA 2605 Maj.Md. Abdus Salam Khan||Tk.40,000.00||Tk.480,000.00||Ms. Mahbuba Begum|
|6||BA 2806 Lt. Col.Md. Lutfur Rahman||Tk.40,000.00||Tk.480,000.00||Ms. Munmun Rahman|
|7||BA 3716 Maj.Md. Mahbubur Rahman||Tk.40,000.00||Tk.480,000.00||Ms. Rita Rahman|
First year’s contribution for Tk.33,60,000.00 (Thirty Three Lac Sixty Thousand) only was paid to the widows of the Shaheed Army Officers at the Prime Minister’s Office (PMO) on April 01, 2009.
Apart from the above, Southeast Bank also donated Tk.25,00,000.00 (Twenty Five Lac) only to the Prime Minister’s Relief Fund on 15 June, 2009 for relief operations amongst Cyclone Aila and other natural calamity victims.
The second year contribution of tk.3.36 million was paid to the widows of the Shaeed Army Officers at the PMO vide pay orders dated February 02, 2010.
Apart from the above Southeast Bank also donated tk.2.50 million only to the Prime Minister’s Relief Fund on 16 June, 2010 for relief operations amongst victims of fire incident at Neemtali and building collapse of Begunbari of Dhaka City.
Southeast Bank also donated tk.5.00 million on 26.07.2010 towards establishment of Muktijuddha Jadugar to uphold national heritage for posterity.
Boxing is a neglected sports areas, Southeast Bank came forward for improvement of boxing in the country. The Bank donated total tk.2.26 million to Bangladesh Amateur Boxing Federation for the purpose.
Southeast Bank donated tk.5.00 million on 11.01.2010 to Bangladesh Olympic Association in co-sponsoring the 11th SA games Dhaka-2010.
Southeast Bank donated tk.0.50 million on 05.04.2010 to Bangladesh Hand Ball Federation in sponsoring the IHF Challenge Trophy, Bangladesh-2010.
Southeast Bank has directly employed 1402 people in the service of the Bank. We have also generated employments for thousands of men and women in the projects and industrial ventures established with our finance. The credit policy of the Bank has also been so designed as to promote trade, commerce and industry which will ultimately contribute to the growth of national economy. It will also help creation of employment opportunities. By mobilizing deposits for the Bank, we have contributed to the formation of capital of the country. We have collected tax on interest/profit earning of the depositors for the public exchequer. Our Bank has been a conduit for bringing foreign remittance from Bangladeshi expatriates living abroad and thereby contributed to the overall foreign exchange reserve of the country. We contributed handsome amounts to the national exchequer in the preceding years as corporate tax.
Southeast Bank Foundation
The Bank has also established the Southeast Bank Foundation to participate in social work in a more organized manner. To meet corporate social responsibility, Southeast Bank Foundation has designed an educational program to support meritorious students in the secondary education level of poor and low income families.
To begin with, a stipend program has been initiated for meritorious students who passed SSC examination in 2009. Applications have been invited through newspaper announcement. A number of 2746 students from all the Boards applied and only 230 of them have been qualified for stipend this year. They will receive Tk.1500 per month for the academic session (2009-2011) along with a lump sum of Tk.4000 to purchase books and accessories.
The Foundation has also started a stipend program for the schools near and around the Southeast Bank Branches of rural and semi urban areas. The concerned branches will act as the focal points. The selected students will receive stipends while schools will receive necessary support to impart quality education. As many as 260 students have been selected from the schools around 19 branches of the Bank. For students of class VII and VIII, the stipend is Tk.600 per month along with a lump sum of Tk.1500, while Tk.1000 per month is the amount of stipend for students of class IX and class X; the lump sum for these classes is Tk-2500 only. The branch executives will liaise with the schools and students regarding the stipend program. Minor revision in the in- built infrastructure will be made to make environment of schools more student friendly. Gradually competent teachers of English and Mathematics will be provided to respective schools to ensure quality education.
CSR Activities of Prime Bank Ltd
Prime Bank Foundation
Prime bank foundation has continued to engage in a range of activities that are benefiting priority target groups throughout the country with increased access to higher education, affordable values-oriented quality primary level English medium education in Dhaka, and increased access to secondary level education in the country’s hard –to-reach district like Shariatpur. This Report highlights the impacts of the programmers that demonstrate how the Foundation is fully leveraging its unique capabilities to deliver value to those target people and places most in need.
Creativity, innovation and diversity are longstanding drivers of success at Prime Bank Foundation. They are vital to our future growth. It also our exchange of ideas and our ability to implement them that will continue to fuel our growth into the future, emphasizing more on long term result oriented projects/programmers. Our endeavors are more then a collection of great brands under one roof . We are passionate about investing our skills, ideas, and energy to create positive change on those target people and place most in need. It is our belief that good financial support/investment builds capacity and makes an enduring impact. PBF work strives to gain competitive advantage by collaborating, and by using our scale, expertise and abilities to drive greater impacts on those target people and place most in need.
The Foundation has the ability to respond to needs and opportunities with direct financial support. We are excited about the non-profit sector’s growing entrepreneurial approach to problem solving and its increased interest in working alongside country’s development partners.
This has been more pronounced in Foundation’s decision made in the reporting year to establish prime Bank eye Hospital, a State-of-the-ArtEyeHospital in 2011 for facility-based holistic services and community level awareness raising, and demand creation. The hallmarks of the eye hospital will quality eye care at prices that everyone can afford.
The Core principal of Prime Bank Eye Hospital (PBEH) will be that the hospital will provide service to the rich and poor alike, yet be financial self-supporting. This principle will be achieved through high quality, high volume care and a well-organized system. A unique partnership we are particularly proud of is getting Aravind Eye care System (AECS), Tamilnadu, India for our proposed eye hospital. Prime bank Foundation has already signed an MOU with AECS as its Technical and Management Assistance Partner for setting its State-of-the-ArtEyeHospital in Dhaka to provide high quality eyecare service at an affordable price.
A building at Satmasjid Road, Dhanmondi, Dhaka has already been made available for PBEH to begin with unit it is shifted to its own building on Ashulia land.
The transition of Foundation’s approach form short term to long term solutions for the problem it intends to address led us to analyze current capabilities, priorities and strategies choices including the purchase of lands needs for implementing long term project on education, health and other service delivery sectors.
Accordingly, Prime Bank Foundation, in the reporting year, has purchased a big piece of lavds at Ashulia, Saver Dhaka, only about 15 minutes drive from Uttara, Dhaka to build a complex of its long term education, health and other service delivery projects thereon.
The land is situated in a magnificent setting within the well known and highly sought-after area of Ashulia and with access directly to Ashulia highway by 350 feet facing/approach. The land being located at Ashulia occupies a prime site ripe for development and construction of physical infrastructures tailored to the needs of PBF’s long term projects on education, health and a few more service for the community.
Listed below are some of the projects Prime Bank Foundation is proud to continue to implement with direct support.
Education Support Programme
Taking education as a tool for social change, Prime Bank Foundation has continued funding educational programmes that enhance the leadership and career development for eventual careers. Accordingly, Prime Bank Foundation is swollen with pride to have the 4th year in a row of success of its Education support programme launched in 2007 to strip off the access barriers of many economic hardship-hit-commendable students to their desired level of education. As always, it is a long term, renewable scholarship programmme for underprivileged but meritorious students from across the country for persuasion of their undergrad/grad/post-grad level studies rather then providing one time recognition awards to good performers. Through this project, Prime Bank engage to build confidence and capabilities to make career, educational and life-changing journey. Throughout the reporting year, the foundation rambled on mentoring relationships needed for inspirational service for the students. With a view to keeping continuity with the success of the first year, another 196 disadvantaged but meritorious students, the second highest in one year since its inception, have been included to provide with financial support in the form of monthly stipends for the persuasion of their undergrad/ grad/ post-graduation level studies in the country’s public sector universities and medical/ engineering/ agriculture collage. Totting up of these students the total number of disadvantaged but meritorious students who are the receivers of Prime Bank Foundation stipends stood at 686.
For awarding stipends in 2010, same processes for inviting applications from potential disadvantaged but meritorious students through advertisement in the country’s leading national dailies and their selection by the Foundations Advisory Committee were followed. The first installment of stipends of all those students selected in 2010 was handed over through a formal award giving ceremony organized on August 07, 2010 at LGED-RDEG Bhaban, Agargoan, Sher-e-Bangla Nagar, Dhaka. Dr. Atiur Rahman, Governor Bangladesh Bank embellished the award giving ceremony through his presence as chief guest and gave away the cheques of the first installment of stipends to the students wishing all the very best for their education and future career.
Prime Bank foundation, under the umbrella of its ESP, in 2010, designed and launched a five-year-long (initially) dedicatory project to provide financial support to the higher secondary level poor but meritorious students pursuing their education in the institutions located in country’s hard-to-reach districts in Bangladesh has been chosen. Under this project, each year, certain number of underprivileged but meritorious higher secondary students would be selected for awards which would be given in the form of CGPA mark (the cut off line of which be determined by the PBF’s Advisory Committee of ESP).
CORPORATE SOCIAL RESPONSIBILITY of BANK ASIA
Corporate Social Responsibility(CSR) is the continuing commitment by business to behave ethically and contribute to economic development. Also it improves the quality of life of the workforce and their families as well as of the local community and society at large. Corporate Social responsibility becomes an integral part of the wealth creation process – which if managed properly should enhance the competitiveness of business and maximize the value of wealth creation to society. When times get hard, scope of CSR increases. The basic driver of CSR consists of values that have taken place within businesses where they not only feel responsible for creation of wealth but also for social and environmental well being. We are decidedly committed to being an equal opportunity employer, protecting the environment, and finally, serving the community of which we are a part. We strive to achieve further development of balanced corporate performance in the economic, social and ecological arena. The employees are encouraged to be responsible corporate citizens and to conduct business in a manner that promotes sustainable development for both the Bank and the community it serves. A summary of the CSR activities of the year 2009 and 2010 of Bank Asia is presented below:
No Education, No Life! Just like food, water and air, education has become a basic necessity for everyone to survive in today’s world. Recognizing the importance of education in nation and society building, Bank Asia has initiated an ambitious plan titled “Bank Asia Higher Studies Scholarship” to provide assistance to those students who have merit and dream in their eyes to serve the society, but not the means to pursue higher studies. Under the scheme, the Bank awards poor but meritorious students of rural areas where the Bank has its branches for their higher studies in core subjects, namely Engineering, Medicine, Physics, Chemistry, Business, Economics, Management, Finance, Banking, etc. The scholarships are given basing on the SSC and HSC exam results and the duration of the scholarship is generally 4 to 5 years. But it may be extended depending on the course duration. Under the program, students receive Tk. 2,000.00 per month. Besides, a lump sum grant of Tk. 10,000.00 is given annually to purchase books and for payment of tuition fees. This scheme was introduced in 2005 .For the year 2009, a total of 42 students have been awarded this scholarship and presently a grand total of 215 students are enjoying benefit of this scheme. In 2010, a total of 93 students have been awarded this scholarship. The Bank spent about tk. 7.31 million for this purpose.
2. Health Care
a) Free Ophthalmological Operations
In the year 2005, Bank Asia started a program in collaboration with Bangladesh Eye Hospital (BEH) to help the handicapped and the underprivileged by providing necessary financial support for performing ophthalmological operation of children born with impaired eye vision in Bangladesh. The trained doctors of BEH conduct the operations in their modern hospital equipped with latest equipments and technology at Dhanmondi. So far, a total of 980 children have been operated. In 2010, the bank spent 1.10 million for this prupose.
b) Free Eye Camps
In addition to the ophthalmological operations, the Bank arranges free Eye Camps in the rural areas where free treatments including spectacles to a large number of school going poor boys and girls and other people of the localities concerned.
c) Donations to Hospitals
The Bank has donated an amount of Tk. 0.80 million to BangladeshEyeHospital for the operation of poor patients. Furthermore, Tk 0.43 million was donated to Marie Stopes clinic for purchasing of contraceptive. Besides, we have financially supported Center for Rehabilitation of the Paralyzed (CRP), Savar and Thengamara Mohila Sobuj Shangha (TMSS) for their hospital at Bogra and also to Acid Survivors Foundation.
d) Blood Donation Camp
The Bank also arranges voluntary blood donation campaign on various national occasions where the officers of the Bank and general people participated spontaneously. This year the bank donated Tk. 1 million for blood donation camp.
3. Computer Literacy
Computer literacy is essential to our growth and development and it needs to be spread to our rural areas. The Bank works with a philosophy to help poor students in rural areas by establishing and operating Computer Learning Centers (CLC) in different schools in providing a technological platform for students, which will help in their endeavors to a brighter future. We have taken this initiative to contribute to the promising IT sector of the country. Already 13 CLCs have been established in different rural schools and are in full operation. About 1,000 students have been enrolled so far in these CLCs out of which 900 students have already obtained certificates. Bank Asia is going to setup another 13 CLCs from where more than 3,000 students are expected to receive education in computer technology every year.
4. Natural Calamities
As a responsible corporate citizen, Bank Asia believes that it is committed to the welfare of the community at large. Whenever there is any natural calamity, the Bank responds promptly to aid the affected humanity. In 2009 the bank donated Tk 1 million to Prime Minister’s relief fund for AILA victims. We would like to declare our pledge that Bank Asia is always ready to stand by the poor disaster affected people of the country. Bank Asia donated Tk.25.00 (twenty five) lac to the Prime Minister’s Relief Fund as financial assistance to the victim families of devastating fire at Nimtoli and building collapse at Begunbarui in first week of June, 2010 that caused loss of more than hundred lives, leaving hundreds of people severely injured. Besides, the Bank donated blankets among cold-hit people in the district of Rajshahi, Pabna and Bogra districts.
During the event of South Asian Games (SAF Games) Bank Asia contributed Tk.5.00 lac for smooth organizing of the program. Bank Asia also contributed Tk.20.00 lac for purchasing car presented to cricketer/s of Bangladesh National Cricket Team for their emphatic win against New Zealand in the recent five One-Day International.
6. Dhaka City Beautification
Dhaka City Corporation has a project named “Beautification of Dhaka Metropolitan City” and Bank Asia has a spontaneous participation in this program. Under the project, the Bank has donated Tk .09 million to M/S Aruti Enterprise for 3:00 km road island beautification work from US Embassy to Natun Bazar and Kuril to Bishawa Road Railgate, Khilkhet.
7. Different Social and Cultural Programs
As a responsible corporate citizen, Bank Asia regularly arranges and participates in different social and cultural programs like celebration of Pohela Boishakh, International Mother Language Day, Independence Day, Victory Day, etc. Besides, Bank Asia also arranges Ifter Party and Doa Mahfill during holy Ramadan at different branches. People from different social levels participate there. Bank also organized several festivals like customer night to enhance customer relationship.
Bank Asia has been one of the pioneers in supporting environment friendly CNG projects by financing CNG conversion and CNG filling stations. The Bank has decided not to finance any tobacco related business or any environmentally hazardous business. Besides, all the offices of Bank Asia are declared as smoking free zone.
9. Other donation activities
As a social responsibility, Bank Asia donated Tk. 2.5 million to Prime Minister’s Relief Fund for the victim of BDR mutiny and donated Tk. 0.48 million to the family members of an martyred army officer. Bank Asia also donated to Prothom Alo for “Badle Jao Badle Dao” program and for observation of International Women’s Day.
Jamuna Bank contribute a lot of money for CSR. They donated in education, health, art and culture, sports, disaster and national economy. Like MBL other commercial banks also contribute these sectors. From the report it is clear DBBL donated more money than others. MBL gradually increase their donated amount and areas. From the comparison I see that, last two year their growth rate is better than others in education, health, sports, art and culture. Etc. Now every bank is interested to contribute in the society welfare. Last two year our country faces many disasters, like Aila, BDR mutiny, Neemtoli tragedy etc. Every commercial bank came forward to the effected people.
As a third world country Bangladesh has a lot of problems. Government often find themselves helpless when it comes to solving of these problems. As business owners of this country are considered as a part of the affluent section of the society they can contribute more meaningfully towards of the betterment of the society. If other private sector company came forward to contribute to the society like banking sector, it will help to create their social branding as well as helping the society.
In this part of recommendation, some valuable issues of Jamuna Bank are discussed. According to the report some decision can be taken.
- In education sector Jamuna Bank contribution increase every year. But their total amount is lower than others bank. So Jamuna Bank should contribute more in this sector.
- In education sector MBL donated awards to higher educated people. In our country many brilliant student can not read properly for money. If MBL donated this type of student, they are able to make bright future.
- Contribution in national economy MBL is slow from others bank. They should take necessary steps to contribute more in national economy.
- Like education sector MBL should try to increase their contribution in Health sector.
- They contribute a small portion of their profits to CSR. They should invest a good portion in CSR.
- MBL contribute only limited areas of their CSR functions. So they should contribute more areas like Technology Development, Research, Infrastructure Development, and poverty alleviation scheme. etc.
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