Monday 21 August 2017

A Study on Corporate Social Responsibility in the top sustainable banks in India


Ms.S.Suruthi,III BBA and Ms. A. Hussnaara, II BBA
CTTE College for Women
ABSTRACT:
The idea that if companies use resources that belong to society, as an ethical duty, this application should be returned to society transformed into benefits. Various initiatives have been developed in recent years that induce the companies to be more systematic, progressive and visible in corporate social responsibility. The governent has also recommended the firm to invest 2% of their net profit towards CSR activities. In the light of above, the present study is aiming at studying the CSR Initiatives and practices in Banking sector and how this sector respond to the social demands of the society while involving in their core business. The primary objective of the study is to study the various CSR initiatives by various banks and also to identify best practices of banks with respect to CSR practices.
Key Words: CSR, Sustainable banking
INTRODUCTION
            CSR, also known as Sustainable Responsible Business (SRB), or Performance, is a form of corporate self-regulation integrated into a business model. Industrialization and commercialization of service sector have explored vivid avenues of progress to a nation. In developing nations, there is a lack of focused and effective actions to the current need. In addition to this a very limited research work has been done to investigate the CSR practices in developing and emerging nations. CSR studies conducted so far were in the context of developed countries such as Western Europe, the USA and Australia and we still know too little about practices in smaller and emerging countries. Bowen also provided a preliminary definition of CSR: “it refers to the obligations of businessmen 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”.
            The World Business Council for Sustainable Development defines Corporate Social Responsibility as, “Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.”
            In India, the CSR gained momentum when Companies Act 2013 was drafted with provision for corporates to spend 2% of the profits towards Corporate Social Responsibilities (CSR). The CSR provisions within the Act is applicable to companies with an annual turnover of 1,000 crore INR and more, or a net worth of 500 crore INR and more, or a net profit of five crore INR and more.
Objectives:
The primary objective of the paper is to study the best CSR practices and initiatives in banking sector in India with reference to top Sustainable banks.
Research Methodology:
The study is based on the secondary data collected from the annual reports of the banks.On the basis of the Sustainable report 2016 published by Future scape and IIM, Udaipur, 6 banks were selected for the study from the top 100 sustainable companies,2016.
Limitations:
The study is based on secondary data and the annual reports of banks were studied to understand the CSR practices and primary data was not used for the study.
Review of Literature
            Eliza Sharma & Dr. Mukta Mani, 2013: Banks are usually judged from the point of view of their financial performance but this study has explored a new dimension for analysing the performance of banks. the study that certain banks like ICICI bank, HDFC bank and State Bank of India which are top performers in terms of profitability and growth are not at the top in CSR activities.
            Mrs.V. Carolin Juliya Pushpam,  Dr.R. Karthi, Ms.B. Asha Daisy, 2015: Banking sector in India is showing interest in integrating sustainability into their business models but its CSR reporting practices are far from satisfaction. There are only a few banks which report their activities on triple bottom line principles.As a matter of fact, the standards for rating CSR practices are less uniform in comparison to that for financial rating. This leads to problem in comparison of corporate houses and determining the CSR rating
            Sarita Moharana, 2013:Most banks use CSR as a marketing tool to spread the word about their business, Generally speaking, most banks seem either unaware or dont monitor their CSR. Special training needs to be given to business managers in working with social issues and Participation of small and medium business should be encouraged... The concept of CSR has failed to some extent to take deep root in India because of lack of  coordination between the banks, government, and non-government organizational efforts.
CSR in Banking Sector:
The CSR in Indian Banking Sector is aimed towards addressing the financial inclusion, providing financial services to the unbanked or untapped areas of the country, the socio-economic development of the country by focusing on the activities like, poverty eradication, health and medical care, rural area development, self employment training and financial literacy trainings, infrastructure development, education, and environmental protection etc. 
Among the top 100 companies for Sustainibility and CSR, the following banks were ranked on four main criteria, Governance, Disclosure, Stakeholders and Sustainability.
CSR Initiatives by the top Sustainable banks:
CSR Initiatives of HDFC Bank Ltd (Ranked 44 in Sustainable Practices,2016)
Empowering through sustainable livelihood initiatives:
training for enhancing occupation skill, credit counselling, financial literacy, market linkages.
Financial literacy and inclusion
financial literacy amongst various segments such as students, senior citizens and others in the communities, directly or through implementing partners
Promoting education:
banks interventions aims at mainstreaming children and improving the quality of education they receive.
Skill training and livelihood enhancement:
training and capacity development of youth and women from economically weak sections of society

CSR Initiatives of Axis Bank Ltd. (Ranked 57 in Sustainable Practices,2016)
Sustainable Livelihoods
promote women empowerment through such activities by providing them skills and livelihood assets which contribute to improvement in their socio-economic status. 
Financial literacy and inclusion
create awareness on personal financial management aspects through financial literacy initiatives and provide the underserved sections of society
Access to finance and entrepreneurship development
creation of sustainable income sources through micro-finance and micro-enterprise development and strengthen mechanisms for alternative livelihood
 Education and Skills Development
a. Skill development through vocational education and training
 b. Consumer education and public awareness 
Environmental Sustainability and Rural Development
a. Natural resource management, soil and water conservation
 b. Renewable energy and emissions reduction
CSR Activities of  IndusInd Bank Ltd. (Ranked 58 in Sustainable Practices,2016)
Agriculture
During the financial year 2015-16,the bank showed  50% annual increase in agricultural lending by the Inclusive Banking Group (IBG)  and a Disbursal of `16,780 million through 0.95 million accounts to poor agricultural borrowers.
Renewable Energy
The Bank has sanctioned `46,178.80 million for projects whose total MW capacity is 1497.3 MW.
Inclusive banking
More than 60% Business Correspondent loans given in ‘below average’ and ‘low’ areas of CRISIL Inclusive Index y 65% and 81% increases in loans to weaker sections (above `30,000 million) and MSMEs (above `20,000 million) respectively.
CSR Initiatives of Mahindra & Mahindra Financial Services Ltd. (Ranked 66 in Sustainable Practices,2016)           
Promoting Education:

The education initiatives are primarily implemented through Kotak Education Foundation (KEF) and the Bank’s CSR team
Enhancing vocational skills and livelihood projects
The CSR team works towards imparting vocational skills to deserving children and youth, women, elderly, and the differently-abled.
Reducing inequalities faced by socially and economically backward groups
The Bank support towards rehabilitating socially and economically backward sections of society by providing safe houses
Environmental Sustainability
The Bank sponsor for environmental sustainability activities such as tree plantation either directly or through an external stakeholder / NGO.
CSR initiatives of State Bank of India: (Ranked 68 in Sustainable Practices,2016)
Child Education:

40,000 educational kits, consisting of school bags and stationery were distributed to school going children from economically disadvantaged sections across various parts of India.

Environment:

 A barren municipal area was beautiful in Aurangabad under its project 'Green Aurangabad Clean Aurangabad'

Rural Development & Sanitation

Supported an Adivasi Community located at Karelpada, near Mumbai, by providing for basic infrastructure facilities

  Healthcare

Provided for medical facilities to ensure better care of new mothers and infants from the underprivileged and remote parts of West Bengal.

 

Major Findings:

The following are the major and notable findings regarding the top 6 sustainable banks of India:

Ø  The top banks primarily contribute towards Environmental Sustainability by adopting Green Practices, adopting afforestation through NGOs

Ø  Another important CSR focus area is Financial literacy, almost all the banks contributes through various initiatives in improving the quality of education and the literacy rate of children especially in the rural and underprivileged children.

Ø  Most of the banks contribute to rural development through their CSR initiatives to name SBI bank provides basic infrastructure to Athivasi community near Mumbai.

Ø  Banks are also concentrating in providing good health care facilities to women, children and people in weaker section.

Ø  Banks also contribute to the priority sectors like agriculture, renewable energy and MSME sectors.

Ø  Financial inclusion by providing financial products to under privileged, Economic weaker section, Rural population, Urban poor, and Migrant workers or other CSR initiatives by few banks.

Ø  Few banks are concentrating in skill training and livelihood enhancement of youth and women through various training programs.

 

CONCLUSION:

CSR in banking sector is taken seriously among the top sustainable banks in our country. The CSR activities focus on areas like Financial inclusion, improving quality of education, environmental sustainability, skill training of employability and rural development. CSR activities in the top sustainable banks are reported through their sustainability repots and are part of the business objectives and operations. They stand as a good role model for the other banks who are aiming to take up CSR initiatives in near future. CSR and Sustainable banking practices have also improved the image and good will of the banks among the stake holders.
REFERENCES:
DeepikaDhingra and Rama Mittal.(2014). CSR Practices in Indian Banking Sector
Eliza Sharma , Dr. Mukta Mani (2013) CSR an analysis of indian commercial banks
iibf.org.in/documents/Eliza_Sharma_Mukta.pdf
www.yesfoundation.in/about_us/index.html
https://www.axisbank.com/csr
IndusInd Bank - All Covers,(2016)
Kotak Mahindra Bank - Business Responsibility Report, (2014-15)
https://www.sbifoundation.in/




Wednesday 16 August 2017

Guest lecture on recent trends in HRM


The Excel Management club of the Department organized a Guest Lecture on Recent Trends in Human Resource Management by Dr.R.Thenmozhi, Professor and Head, Department of  Management Studies, University of  Madras ,Chennai on 16th August,2017. Students of Business Administration attended and gained knowledge on the concept of recent practices in HRM.