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 don‟t 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
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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'
|
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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
Sharma
.C.A. (2012).Corporate
Social Responsibility in Indian Banking Industry
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/
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