1 Mazumi

Assignment On Corporate Social Responsibility In Bangladesh Female

Introduction

Social responsibility is a concept well known in the corporate world and beyond that. 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 that is corporate social responsibility. However, it is regretful that though internationally it is being practiced widely, Bangladesh is still lagging behind. The difference between the world standard and the practice in Bangladesh shows the lacking here and the scope for development. This report has been prepared as a requirement of the Project work. The report was based upon the CSR practices of different banks in Bangladesh. CSR is a means of discussing the extent of any obligations a business has to its immediate society; a way of proposing policy ideas on how those obligations can be met; as well as a tool by which the benefits to a business for meeting those obligations can be identified.

Corporate Social Responsibility is not only an act for humanity but also to provide good working environment to an organization’s employees, to pay just remuneration, to give regular leave, to care as a human beings and to care environment of the society. Business organizations in the society are accountable to implement different socially desirable activities not only for stakeholders concern but also for different external parties. CSR reporting can be a significant part in the financial reporting while it provides information to different stakeholders and as an additional part social report would provide information relating to whole environmental concern to society. The system of providing information may vary from company to company, country to country but the common media of providing information is financial statement. However, there does not exist a universally accepted theoretical framework for corporate social and environmental reporting. Corporate social responsibility is not the only ethical dilemma that financial institutions face in an atmosphere of corrupt corporate practice but also these institutions are concerned with commitment for sustainable development but execution of such development procedural function’s through compliance with CSR guidelines is difficult. Currently in Bangladesh, CSR is a matter of self-interest for the corporate. There is a crying need for an in-depth study into the quality, quantity of corporate social disclosure and identification of areas for future improvement so that transparency can be ensured. Corporate Social Responsibility (CSR) reporting focuses vary by business, by size, by sector and even by geographic region. The area of CSR reporting is quite big and it includes all the good practices that increase the business profitability and can preserve interest of all stakeholders. Bangladesh is a developing country and thus compared to global competitiveness and demand, the CSR practices and standards are being implemented in Bangladesh poorly. We are yet go a long way and is still lagging behind. For better and enhanced performance CSR rules and reporting implementation is thus now need, not merely demand.

In the contemporary globally competitive market companies must portray themselves as socially responsible companies. Through globalization companies pursue growth, and active involvement in socially beneficial programs provides competitive advantages to the company in pursuing such goals. Companies operating in multiple nations are often required to play a significant role in social issues of the respective nations, otherwise government regulations, environmental restrictions, labor exploitation issues and more can cost companies millions of dollars. Under these circumstances, Corporate Social Responsibility (CSR) can increase both long-term profitability and sustainability of the company as well as enhance the reputation of the organization. The last three decades have seen a mounting pressure on companies to engage in CSR. Among most global companies, some simply view CSR as a costly hindrance, while a few have managed to use CSR methodologies as a strategic tactic to obtain public support for their presence in the global markets. Nevertheless, this helps the companies to sustain a competitive advantage by using their social contributions. Researchers around the world, over the past few decades, have reported positive, negative, mixed and neutral impact of CSR on Corporate Financial Performance (CFP). Building upon this premise, the objective of this study is to draw a conceptual framework for examining the direction of the linkage between corporate social responsibility and corporate financial performance and apply the framework on the banking sector in Bangladesh in order to examine the impact of CSR on CFP in this sector.

Corporate organizations are playing an important role in social development through sharing their profit for many benevolent and philanthropic activities under the rubric of Corporate Social Responsibility (CSR). CSR has become a common word highly discussed and prioritized by the national and international organizations, development sectors, professionals and scholars, and global business partners. Generally, social responsibility means the works, which will bring about the overall betterment of the mass people in the society. In this context, CSR concept has a promising humane future as it addresses and captures the most important concerns of the public regarding business and society relationships. Business in a capitalistic world is all about making profits. CSR, however, challenges such corporate attitude and push them to be more humanistic and oblige them not to forget the social responsibilities to fighting many odds at the societal level. As every person has his own social responsibilities towards the society so does the business firms. Business is an inseparable and embedded part of the society. Besides conducting business activities and pursuing economic gains, business houses also have several other roles and responsibilities towards society such as the social and environmental responsibilities and business contributions that would benefit the society at large. It is mandatory for companies to conform to the legal responsibilities as prescribed by law. So, organizations have no alternative but to comply with the basic law of the land. The idea is that, above and beyond making a profit, the business has social obligations that must be carried out through corporate social responsibility. It has been generally accepted that corporate social responsibility is an inevitable matter, which was adopted globally to ensure sound development of the world. Sustainable development is not possible without evenhanded support of corporate world. Hence, corporate society has a linchpin role to open up a lion share opportunity in every pros and cons of any society. It is regretful, however, that although CSR activities are forcefully implemented internationally, Bangladesh is still lagging behind. Although private banks like Dutch-Bangla Bank Limited& others in Bangladesh is a pioneer organization which is contributing to ensure its social responsibility from the beginning to present day, suspicions prevails that they depart from the spirit of the concept of CSR today. To them, it is a business tool or policy or an advertisement, which ensures maximum productivity, reorganizations, benefits and other facilities of their organizations.

In order to achieve the objectives of this study both qualitative and quantitative research methods have been used. Data from both primary and secondary sources were collected. Secondary sources include reports, documents, magazines, books, journals, various newspapers, and subject related websites and research documents. Literature review covered various issues such as definition and nature of corporate social responsibility, business ethics, organizational mission and vision, various social and environmental responsibilities and sustainable development, respect for human rights, health and professional safety in Bangladesh. Primary data were collected through conducting surveys from the target respondents such as beneficiary groups and different stakeholders of BKB.

Objectives of the Study:

Objectives of the studies are also to examine current status of prevailing laws/rules and how far these are being implemented and reported in the annual report of Banks in Bangladesh with major focus on BKB’s CSR activities. Besides this,the objectives regarding this paper are to find out the scenario regarding the CSR practice in the banking sector of Bangladesh with major focus on Bangladesh Krishi Bank.

1.To throw light on the concept of CSR.

2.To find out CSR practice of banking sector in Bangladesh with major      focus with major focus on Bangladesh Krishi Bank

3.To recommend some necessary steps to boost CSR activities and their reporting.

Scope of the Study:

The scope of this study was based on the information available from the direct interview of employees engaged in BKB as well as other banks. The analysis and interpretation prepared in this report was conducted on the executive of banks. The analysis included all the statistical analysis and their interpretations. Vertical and horizontal analysis was also included to show the overall condition of CSR and its relation with different variables. Some suggestions and recommendations were also made in this report, as this was the part of our study. To analyze and evaluate this paper I have concentrated on different CSR activities of BKB as well as other banks through the employees of different banks.

Methodology

The study is exclusively a descriptive research on corporate social reporting practices of Bangladesh Krishi Bank based on a small sample size. Thus, the study is purely based on the information from secondary data sources. The data collected for the purpose of the study involves the examination of annual reports for the year 2011 of Bangladesh Krishi Bank. In order to understand CSR disclosure by banking companies, annual reports are considered appropriate documents for analysis. Annual reports are a common and popular means of communication to stakeholders and they command the actual situation of the company. To analyze the extent of social responsibility reporting by Bangladeshi Banking companies, annual reports constituted the main primary source. Guthrie and Parker (1990), Gray, Owen and Adams (1996), Deegan and Rankin (1997) and other scholars studied corporate social reporting practices using annual reports as the key source of information. Additionally, it is documented that annual report is the most widespread and accepted document for corporate communication with different parties in Bangladesh.

Limitations:

There are some limitations that I have faced in preparing this report.  Basically I faced difficulties in collecting data from the different sources.  To collect primary data some individual showed no interest in interviewing them.  For secondary data, I faced problem of unorganized record of documents keeping by different sources. Preparing the report I faced some difficulties which are

  • Lack of proper information in the websites of the Banks.
  • Lack of necessary information in the official publications of Bank companies.
  • Inexperience and time constraint are the other limitations.
  • Secondary data were collected from the Annual Reports which may contain biased information.
  • This project has been prepared with limited resources. Due to this reasons the justifications stated may not reflect the actual scenario.

Corporate   Social   Responsibility: Definitely social responsibility includes the responsibility of social people, groups, societies, and business organization. Here raises the question: why is there more interest in, and debate about the social responsibility of business than about the social responsibility of the other institutions? It is of course legitimate to raise the issue of social responsibility of business. But we hear rather less about the social responsibility of, say, the churches, the media, trade unions, the professions, universities, or even the government. When people collectively organize themselves in organizations of one kind or another, do those impersonal legal entities really acquire social responsibilities, which differ from those of other collective entities? Many people are uneasy about the profit motive, suspecting that profits emerge only from exploitation. They fear that free enterprise encourages greed and selfishness. They are reluctant to accept the logic of Adam Smith’s famous theory of invisible hand, which holds that business people the general interest more effectively by pursuing their own interests than by directly trying to ‘do good’. I suggest that, this is why we are here little about the social responsibilities of churches, charities and so on. Business, in contrast, is assumed to have a problem about its social responsibilities because it is driven by profit-motives. So it can be said that, Corporate Social Responsibility (CSR) means that companies integrate social and environmental concerns in their business operations and in their interaction with business relevant groups on a voluntary basis. In general, CSR is characterized by the following aspects:

•        Voluntary initiatives going beyond legislative requirements and    contractual obligations
•        Activities to benefit the employees, business relevant groups (including the society as such) or the environment
•        With a positive contribution to the individual target group while minimizing negative effects on other (including environment)
•        Regular activities rather than one-time-events (i.e. related to business strategy vs. ad hoc) CSR is not only about fulfilling a duty to society; it should also bring competitive advantage. Through an effective CSR program, companies can:
•        Improve access to capital
•        Sharpen decision-making and reduce risk
•        Enhance brand image
•        Uncover previously hidden commercial opportunities, including new markets
•          Reduce costs
•        Attract, retain and motivate employees

The origin of CSR

The history of CSR is almost as long as that of companies. Concerns about the excesses of the East India Company were commonly expressed in the

Seventeenth century. There has been a tradition of benevolent capitalism in the UK for over 150 years. Quakers, such as Barclays and Cadbury, as well as socialists, such as Engel’s and Morris, experimented with socially responsible and values-based forms of business. And Victorian philanthropy could be said to be responsible for considerable portions of the urban landscape of older town centers today.

In terms of activism aimed at companies perceived as acting against the general interest: The first large-scale consumer boycott? England, in the 1790s over slave harvested sugar. (It succeeded in forcing the importer to switch to free-labor sources.)In 1612, English jurist Edward Coke complained that corporations “cannot commit treason, nor be outlawed or excommunicated, for they have no souls.”

Corporate Social Responsibility (CSR) is a worldwide-accepted development on how companies can manage their business processes to produce an overall positive impact on society and environment. CSR represents care for social and environmental issues with a profitable business perspective: the so-called ‘People – Planet – Profit’ philosophyDefinition of CSR

CSR is a concept whereby financial institutions not only consider their profitability and growth, but also the interests of society and the environment by taking responsibility for the impact of their activities on stakeholders, employees, shareholders, customers, suppliers and civil society represented by NGOs the process of communicating the social and environmental effects of organizations’ economic actions to particular interest groups within society and to society at large.

 Views of Social Responsibility:

There are two views of social responsibility. Those ar

• The Classical View
• The Socio economic view

The Classical View

The view that management’s only responsibility is to maximize profits.

The Socioeconomic View

This is the modern view of today’s global business and economy. In this view management’s social responsibility goes beyond making profit to include protecting and improving society’s welfare.

The  major occupation of the people of Bangladesh is “Krishi”. Krishi is a Bengali word which means “Agriculture”. About 85% of the population depends directly or indirectly on agriculture which contributes a significant portion to GDP.

Bangladesh Krishi Bank (BKB) has been established under the Bangladesh Krishi Bank order 1973 (President’s Order No 27 of 1973). BKB is a Banking Company under the Banking Company Act-1991. Its Head Office is located at Krishi Bank Bhaban,83-85 Motijheel Commercial Area, Dhaka-1000, Bangladesh.

The primary objective of BKB is to provide credit facilities to the farmers for the development of agriculture and entrepreneurs engaged in development of agro-based and cottage industries.

Bangladesh Krishi Bank was established under BKB Order`1973 with the objective of strengthening rural economy by extending credit support to agricultural and agro-based sectors. In consideration of the importance of Micro-Credit and with the objective of generating employment as well as encouraging social development BKB has undertaken several Micro-Credit programs of its own and also in collaboration with local and foreign agencies. The programs have been designed to cover all segments of poor population whether skilled or unskilled such as small and marginal farmers, landless labourers, destitute women, disabled, unemployed youth and rural artisans etc.  About 1417047 beneficiaries have been provided with Tk. 14469.90 million since its inception (upto 30 September,2011).

Considering the needs of the target groups since late seventy’s BKB has been implementing a series of Micro-Credit programs out of which 10 programs have recently been completed and 31 programs are in operation at present. These diversified micro-credit programs are being implemented by BKB.

Despite a long term trend of decline of share of agriculture sector in GDP, the sector still accounts for about 48 percent of the total employed persons calling for greater institutional and policy supports. Besides, the recent global food crisis on account of natural calamities, increased demand for food, use of crops to produce bio-fuel in the developed countries and protectionist policy adopted by the food exporting countries highlights the urgency of increasing domestic food production and attaining food security through increased investment in this sector and, timely and adequate supply of agricultural inputs including agricultural credit. Keeping in view, the importance of credit for ensuring sustainable growth in the agriculture sector, annual program based indicative disbursement targets of credit by the lending banks are designed. The banks themselves taking into consideration expected demand for credit for the year, previous years’ disbursement and the availability of fund set yearly targets of disbursement.

In recent time, agricultural and rural finance program seems to have boosted up as the private commercial banks began to participate along with the State-owned Commercial Banks (SCBs). The private and foreign banks came forward in distributing agricultural credit through their branch network in collaboration with NGOs, in addition to the regular agricultural credit disbursement by state owned banks and organizations.

 We understand that when a person is poor, they are poor for a whole number of reasons that compound the disadvantages they face – a poor landless family struggles to secure an income against rising food costs, frequent natural disasters and the threat of ill health and malnutrition. They also lack access to markets and decent supplies, credit, savings and insurance, safe water and sanitation, and a quality education for their children. Bangladesh Krishi bank work with those people and work for economic profit maximization for the country rather than earn financial profit for their own.

CSR Pillars:

“CSR Pillars” were used to benchmark the state of CSR in a country. Each parameter was further assessed against globally acknowledged standards, evaluation tools, evolving CSR definitions and indicators, as well as learning through interaction with international banking business and CSR banks

“ CSR Pillars”

CG    Corporate Governance of Banks:

BE     Banking Business Ethical Principles

EC     Environmental Compliance

SC     Social Compliance

DR    Discloser and Reporting

EP     Product Integrity

CC    Giving and Community investment

SH     Stakeholder involvement

FP     Financial Performance

SS     Supply Chain security

Corporate Governance of Banks:

The Bank is guided in accordance with the policies and principles of the Government of the Peoples Republic of Bangladesh. BKB has an authorized capital of Tk. 15,000 Million (Taka Fifteen thousand  Million) only and paid up capital of Tk. 9000 Million (Taka Nine thousand Million)  only which is fully paid by the government. The Bank started commercial functioning since 1977 to generate more loanable fund from the idle rural and urban savings and invest them for the betterment of our economy.

The Bank operates its function through its 998 branches (except Rajshahi Division) of which 858 are rural and 140 are urban. It has 15 foreign exchange (Authorized dealer) branches. In the field level the Bank has 8 Divisional,21 Chief Regional and 30 Regional offices  for close supervision of the branch activities. For smooth operation, s a part of internal control and compliance system, the bank has also 56 field level audit offices of which 5 at Divisional and 51 at Regional levels. In the Head Office the Bank has 4 Divisions headed by General Managers and 28 Departments including Local Principal Office and Training Institute headed by  Deputy General Managers. The existing strength of Bank’s manpower is 10275 against the approved strength of 13680  as on 31 December, 2012.

The Bank has a Board of Directors comprising of 11 members. The Board is headed by a Chairman. The Directors represent both public and private sectors and are appointed by the government. The Board Chairman is generally an experienced professional/ex-professional who has wide acceptability and rapport.

The Managing Director is the Chief Executive of the Bank. He is appointed by the government.

The Bank has two posts of Deputy Managing Directors and are appointed by the Government.

The Bank has 14 posts of General Manager. They are also appointed by the Government.

In the Head Office there are 4 Divisions each headed by a General Manager. The divisions are:

  • Administration Division
  • Planning & Operation Division
  • Accounts Division and
  • Loan Recovery Division

Under the control and supervision of the above four divisions 28 departments are working in the head office headed by Deputy General Managers.

Banking Business Ethical Principles:

The code of conduct is offered as a guideline for the activities of bank officials (agents. attorneys, directors, officers and employees) of Bangladesh Krishi  Bank That will promote, train andencourage adherence in business and personal affairs to a high ethical standard. And follow the SSR 2008 (Services rules for the bankers) . Reward and punishment is given to them according to rule and regulations stated in  the SSR 2008

  •  General Ethical Standards:

                   A. Gifts and Gratuities,

                   B. Exceptions to the Prohibition of Accepting Gifts

                   C. Confidential Information

                   D. Preferential treatment

                   E. Community Involvement

                   F. Political Involvement

                   G. Personal Conduct

                   H. Advertising

A.   Gifts and Gratuities:

1. Prohibit from offering, giving, seeking, or accepting anything of value for themselves or a third party with the intent to corruptly influence or reward .
2. Records of offerings or value from the customers shall be disclosed before higher officials.

 B. Exceptions to the Prohibition of Accepting Gifts :

– Gifts based on family or personal relationships independent of business of the bank.
– Benefits which would be paid the bank
– Loans from banks or financial institutions
– Advertising or promotional material of reasonable value
– Discounts or rebates on merchandise or services that do not  exceed those available to others.
– Civic, charitable, educational, or religious organization awards for recognition of service and accomplishment.

C.   Confidential Information:

–         Such information obtained by Bank officials should be kept confidential and should be shared only with those who have a legitimate right and need to know.

– Information shall not be used for the purpose of advancing any private interest or of making personal gain.

– Special care shall be exercised to prevent the misuse of confidential information between departments

Preferential treatment:

– Such information obtained by Bank officials should be kept confidential and should be shared only with those who have a legitimate right and need to know.

– Information shall not be used for the purpose of advancing any private interest or of making personal gain.

– Special care shall be exercised to prevent the misuse of confidential information between departments.

E. Community Involvement :

1.  The Bank’s continued success is dependent upon involvement in worthwhile community affairs, and the Bank encourages its Officials to participate actively in all matters directed to the public interest.

2.   Among the areas in which the Bank can make a valuable and needed contribution to the genera! welfare is that of charitable contributions. The Bank is dedicated to the making of charitable contributions in such amounts and to such charitable organizations as shall be determined from time to time.

F. Political Involvement:

It is the Bank’s policy to adhere strictly to the law affecting its participation in political processes. The gift or the gratuitous use of the Bank’s funds, property, equipment, supplies, and facilities, directly or indirectly, to or for the benefit of any political party, candidate, or political committee is absolutely prohibited.

G.       Personal Conduct

 The Bank’s image and reputation can be no better than that of its Officials and the Bank expects all of its people to conduct their personal lives in such manner as not to bring discredit upon the trust and respect of the bank. The

reputation that the Bank will enjoy will be attributable in large part to the fair-dealing, friendliness, and moral rectitude of the Bank’s people.

H. Advertising :

Policy is to employ advertising media in such a manner that assertions and claims will be honest, truthful, and in keeping with fundamental ethical principles.

                   A. General Statement

                   B. Self Dealing

                   C. Outside Employment

                   D. Outside Business Interest

                    E. Outside Directorship

                   F. Individual Transaction with Customer

                   G. Conflicts Between Customers

                   H. Appearance of conflict

A. General Statement:

The Bank expects every Official to be constantly vigilant to perceive the dangers inherent in situations that give rise to a conflict of personal interests with those of the Bank. Perfect avoidance of all conflicts is not possible, but the Bank expects the kind of loyalty and ethical consciousness that will motivate an Official to recognize a conflict of interest when it occurs, and if it cannot be reasonable avoided, to disclose it and endeavor to bring about its satisfactory resolution.

B.    Self Dealing :

The Bank, in its own non-fiduciary right, shall not buy or sell any property or services from or to a Bank Official without the expressed approval of the Bank’s highest authority. This prohibition shall not apply to regular transactions conducted on comparable terms with those accorded other customers of the Bank

C.   Outside Employment :

1.   Except as otherwise agreed employment by the Bank of an officer or employee shall be deemed to be “full-time”. The Bank recognizes the fact that an officer or employee may be justified under some circumstances in accepting casual outside employment to be performed after working hours if no conflict with the Bank’s interest is involved.  However, Managing Director should make the determination of the policy of such outside employment through the employee s Supervisor. Under no circumstances may an officer or employee work for another bank of financial services company.

2.  No Bank Official shall own directly or indirectly an interest in any business or enterprise if such ownership would tend to influence adversely any decision of said Official on behalf of the- Dank. Ownership by the spouse- or unanticipated child of the Official shall be doomed to be an indirect ownership by the Official.

3.  No Bank Official shall accept or engage in an activity, business or employment, either during or after working hours which would conflict with the Bank’s interest or diminish the ability of the Official to render to the Bank the full, loyal and undivided service which is contemplated in his/her employment by the Bank.

D. Outside Business Interest :

Bank Officials are prohibited from self-dealing or otherwise trading on their position or accepting from one doing or seeking to do business with the Bank, a business opportunity not available to other persons, or that is made available because of such Official’s position with the Bank.

E.Outside Directorship:

Bank Officials are prohibited from taking or otherwise trading on their position or accepting from one doing or seeking to do directorship outside.

F. Individual Transaction with Customer :

Bank officers and employees should avoid lending or borrowing personal funds from non-lending institution customers of the Bank, not only because of the potential influence on an officer or employee’s judgment and decisions, but also because the grant or denial of a loan request imposes an unfair burden on the customer. Accordingly, borrowing by an officer or employee from a customer of the Bank shall be limited to recognized lending institutions, except with the prior approval of the Chief Executive Officer.

G.Conflicts between Customers :

The Bank cannot control or prevent conflicts between its customers; however, the Bank’s policy is to maintain awareness, to the extent possible, of known conflicts between customers and of the inherent dangers of participating therein.

  •  Implementation of policy :

                   A. Supervision and control

                   B. Dissemination of Statement

                   C. Monitoring

Implementation of Policy

A. Supervision and Control :

The adoption and implementation of all Bank policies stem from the authority of the Board of Directors. The Board has authorized the Bank’s Executive Committee to perform the functions of an Ethics Committee to interpret the provisions of this Code, to make any necessary changes therein from time- to time, to monitor compliance therewith, to advise the staff of any apparent conflicts of interest and to do all other things helpful to the effective administration of this Code on a continuing basis.

B. Dissemination of Statement

Since the regulations of the Bank Bribery Law require it, and since a statement of policy and ethics can be no better than the knowledge and. awareness of it by those to whom it’ is directed, a copy of this Code of Conduct shall be made available to every Bunking Official. The Official shall acknowledge and agree to the Code in writing. A copy shall be available to every new Official upon his/her employment or affiliation with the Dank, and a written acknowledgment and agreement shall bo obtained from him/her at that time.

C. Monitoring

The Bank urges all its Officials to cultivate an awareness of circumstances that affect the banking industry and the need to define standards of conduct that contribute to the well-being of the Bank and assist the Bunk in     complying with occupied rule and conduct and applicable as requirements.

Environmental Compliance

Environmental compliance means that the bank makes health, safety and environment considerations priority in its banking business decision-making and process. BKB followed Environmental Compliance while taking any decision of business.

Social Compliance

BKB to achieve the following objectives:

*        To create employment opportunities through income generating                  activities.
*          To empower the rural women to establish their own rights.
*          To improve the living standard of the rural people.
*          To alleviate poverty of the poor people.
*          To make easy access to institutional credit facilities and resources.
*          To mobilize rural savings.
*          To make optimum utilization of rural resources.
*          To engage inactive human resources of the rural areas in productive   economic activities.
*          To engage rural people in development process of the country.
*          To eliminate exploitation done by the moneylenders.

Crop Loan

Out of total annual allocation of Loan portfolio, 60% is earmarked for Crop financing. The Credit program covers all the seasonal crops produced in the country.

The loan is disbursed as per norms set by the Bangladesh Bank. The rate of interest for this sector is 8%. The rate of interest may however, vary from time to time.

Both the landowner and sharecroppers are normally the target group for this loan. Marginal farmers are also eligible for the loan.

  • Crop loan is sanctioned on annual basis.
  • Credit passbook is issued to each borrower.

Horticulture & Fruit Production:

  • Nursery development ( fruits, useful trees, flower, unbury culture, spices etc production & marketing )
  • Banana, papaya, guava, pineapple, melon, water melon, beetle nut etc
  • Mushroom cultivation
  • Aromatic and fine rice
  • Lettuce, capsicum, broccoli, French bean & other vegetables and promotion of export market
  • Spices (onion, garlic, ginger, turmeric etc)
  • Baby corn
  • Fruit production (mango, jackfruit, litchis, lemon, guava, pineapple, banana etc )
  • Floriculture (import substitutes & exportable rajanigandha, ganda, rose, glandules, orchid, Christmas tree, bonsai etc)
  • Import alternative fruit production (orange, grapes etc)

Tea :

Tea is one of the major exportable items of the country. BKB is the exclusive financing institution providing credit to this sector. The Bank generally provides two types of loan – Tea production loan and Tea development loan.

  1. Production Loan is for short-term basis. Rate of interest is 12%.
  2. Development loan is term loan. Rate of interest is 11%.
  3. Trading loan – Short term loan. Rate of interest is 13%.

 

Rubber plantation

BKB is the premier financial institution for rubber plantation.
This is one of the import substitute products.

DR   Discloser and Reporting:

Reports are used as means of management (creating and documenting systems). The main benefits that come out as a result of maintaining a reporting system is the case of comparability of the Banks Social and environmental performance. Like Banking ethics Principles, reports also reduce conformance cost by providing quick views on operational procedures and their out comes and also to monitor on going progress. BKB maintaining full discourser and reporting to the concern authority and to the public. BKB maintaining a Web site as well.

A Salient feature of BKB on going Micro-Credit Programs under poverty alleviation is given below:

1. Credit program for the landless and Marginal Farmers: This program has been launched with BKB`s own fund in 1992-93 financial year through its all branches. Landless and marginal farmers get short-term credit under this program. Persons/ Peasants having not more than 1.50 acres of cultivable land and annual income of highest Tk 25000/- are eligible for getting credit under this program. After formation of groups and obtaining training the group members get credit without any collateral security. But they have to hypothecate the goods and assets created by the loan. In lieu of collateral they have to take responsibility as guarantor for the recovery of loan within the group. The present Interest rate is 10%.   52 equal weekly installments are fixed and the recovery will be taken place accordingly. About 474181beneficiaries have been provided with Tk. 4698.40 million since its inception (upto 30 September,2012).

2.Beef fattening Joint Program:

  This is a bank`s own financed program. Bank launched this program in 1994. The main objective of this program is to fill up the deficiency of animal protein in the country as well as creation of self-employment for poor and unemployed people living in the villages. Under this program a person can get a loan amounting up to Tk.25000/- for 5 calves against guarantee of a bank official / local elite. The rate of interest is 10%. The loan is to be repaid with interest in one installment within one year. About 89025 beneficiaries have been provided with Tk.1481.30 million since its inception (up to 30 September, 2012).

3.Swanirvar Credit Program: Bank has been implementing swanirvar credit program without collateral security since 1979. Employment creation for the landless and marginal farmers, increasing their standard of living, creation of social and ethical values, eradication of illiteracy, providing creation of health and family planning services etc are the objectives of this program .The beneficiaries under the program are landless, rural poor & destitute having maximum 0.40 acres of cultivable land and maximum annual income is Tk.20,000/-. 212 branches of 31 districts (regions) are involved in this program. The beneficiaries have to form groups (each Consisting 5 members) and a center (consisting 5 groups). BKB & Swanirvar Bangladesh is operating this program jointly. The credit is collateral free but Group guarantee for each other is needed. Maximum loan amount is TK.15,000/- per beneficiary. It is Short term credit(to be recovered in 52 equal weekly installments within one year). Disbursement of loans to the beneficiaries is made duly recommended by Swanirvar staffs. Swanirvar Bangladesh is responsible for group formation, giving training to the beneficiaries and recovery of loan. Rate of Interest is 16%. (6% Service charge for Swarnivar, 10% Interest for BKB). About 274115 beneficiaries have been provided with Tk.1577.80 million since its inception (upto 30 September,2012).

Swanirvar Credit Program:

Small Farmers & landless Labourers Development Project (SFDP)

BARD is implementing this project jointly & BKB from 1995 through 21 branches under 6 Regions (districts) of Bangladesh Krishi Bank. The objectives of the project are to increase production, employment creation and increase income of the small landless farmers & labourers through formation of small groups, generation of own capital and provision for capital support for undertaking various income generating activities. Under this project Tk. 19.80 million has been disbursed to 2710 beneficiaries on average per year and recovered Tk. 15.80 million per year. Cumulative recovery rate is 97%. The beneficiaries under this program are small farmers having maximum 0.50 acres of cultivable land & landless labourers having 0.51-1.50 acres of cultivable land. Selection of target family, group formation, supervision of group activities, supervision of loan utilization and all kinds of field works are done by BARD. Opening of group account, sanctioning and disbursement of loan & maintaining savings account etc. are done by BKB. Bank provides credit from its own source after formation 5-10 members group. The loan is collateral free, but assets and goods derived from credit are hypothecated. Lien of group savings & group pressure replace the collateral. Loan is disbursed for any recognized items which is accepted by bank & identified by members of group. Interest rate is 15% of which 10% for BKB, 5% for BARD. Chairman or secretary of the group recovers the loan. Loan is recovered in weekly/fortnightly/monthly installments within maximum 18 months. About 28266 beneficiaries have been provided with Tk.215.20 million since its inception (upto 30 September, 2012). This program terminated on 30th June,2006.

South Asia Poverty Alleviation Program:

This program was launched on the basis of Dhaka conference of SAARC countries in 1993. This is a joint venture program with UNDP. But it is banks own financed program. UNDP organizes the beneficiaries, trains them and recommends the loan. The responsibility of credit realization lies with the managers of village organizations. This is an area based credit program. Only Kishorganj ( a district) sadar upazilla is the command area of this program. The maximum credit limit is Tk. 25000/- per beneficiary. 25 beneficiaries form a group. Rate of interest is 15% (BKB 10% and the manager of village organization 5%).The loan is collateral free and is recovered in weekly installments within one year. About 53723 beneficiaries have been provided with Tk.445.70 million since its inception (upto 30 September, 2012).

United Nations Capital Development Fund(UNCDF):

This program started in 1983 with the objective of financing rural & cottage industries. Now it is running on revolving fund. This is a joint venture program with BKB, BSCIC & UNCDF. UNCDF provides one third of fund while BKB provides two thirds. BSCIC selects borrower and provides extension services. The program covers 29 districts. BKB provides credit from joint fund and maintains account. Rate of interest is 10% – 14%. This is a collateral free credit. Raw materials, finished goods and capital asset created out of credit are kept as hypothecation against credit provided to the beneficiaries. About 24837 beneficiaries have been provided with Tk.136.70 million since its inception (upto 30 September,2012).

Rural Women Employment Creation Project ADB Loan No 1067 BAN(SF):

This is a joint project started in 1993 for experimenting with the idea of co-participation of government Organizations  (GOs) and Non-Government Organizations (NGOs) aiming at employment creation for poor women in the rural areas. Department of women Affairs (DWA), 19 NGO`s in 12 thanas (upa-zilla) and BKB jointly implementing the project. NGOs organizes individuals into groups, train them under the supervision of DWA and recommends for credit  funded by ADB. This is also a collateral free credit. Interest rate is 12%. About 67402 beneficiaries have been provided with Tk.154.70 million since its inception (upto 30 September 2012). This program terminated on 30 th June,2007.

BKB-NGO Micro Credit Program:

This program is a replication of Rural Women Employment Creation Project (RWECP).NGOs organizes individuals into groups, provides them training and recommends for credit . BKB provides credit from its own fund. This is also a collateral free credit. Interest rate is 12.5% . About 16636 beneficiaries have been provided with Tk. 136.00 million since its inception (upto 30 September 2012).

Credits Under National Poverty Alleviation Program through Goat Rearing:

This program has been introduced in 2002 aiming to eradicate poverty through goat rearing. Directorate of livestock provides with extension service while BKB provides credit from its own fund for a period of 4 years term. This is a collateral free credit provided from all branches of BKB. Interest rate is 10% . About 24354 beneficiaries have been provided with Tk. 236.50 million since its inception (upto 30 September 2012).

Milking Cow Credit Program for the Women:

The program launched in the year 1997. The main objectives of the program were proper utilization of the unemployed women increasing milk production and helping the up-lift of the condition of the women folk. Under this program one village of a branch area is selected. One woman from each family of the selected village is eligible to get this credit facility. An applicant gets maximum Tk. 10,000/- to purchase a calf. Interest rate is 8%. The loan is realized within one year in weekly installments. This is a collateral free supervised credit. An officer or field worker of the branch is engaged in supervising the credit under the direct control of the branch manager.  Livestock officers help the beneficiaries in treatment and rearing the cow. About 612 beneficiaries have been provided with Tk. 8.20 million since its inception (upto 30 September 2012).

Special Micro Credit Program for the Disabled:

This program has been introduced in 2002 aiming to income generation & development of socio-economic condition through employment creation for the disabled persons. Department of Social Welfare and Disabled Foundation provides extension services. This is a collateral free credit provided from all branches of the bank. Interest rate is 10%. About 530 beneficiaries have been provided with Tk. 5.60 million since its inception (upto 30 September 2012).

Monipuri Small Traders Credit Program:

This program have been introduced in 2003 aiming to provide working capital to handloom industry operated by the Monipuri women living in the greater Sylhet areas. Bank officials organize the Monipuri women having handloom and training/education/experience of operation. Eligible women are organized into 5 member groups. This is also a collateral free credit provided from the bank`s own fund. Interest rate is 10% . About 684 beneficiaries have been provided with Tk.21.50 million since its inception (upto 30 September 2012).

Special Credit Program for the Rakhains under the district of Cox`s Bazar:

This program has been launched in 2003 aiming to provide working capital credit for producing handloom and cottage Industrial products and marketing. The loan is disbursed to the Rakhain community living in the district of Cox`s Bazar. Bank officials organize Rakhains into 5 member groups. This is a collateral free credit program from banks own fund. Interest rate is 10% . About 469 beneficiaries have been provided with Tk. 15.10 million since its inception (upto 30 September 2012).

Tree Plantation Programs: In 2002 and 2003 BKB has launched 8 Tree Plantation Programs-viz:

i)     All types of tree nursery including herbal,
ii)     Horticulture Development,
iii)    Fruit and forest tree plantation,
iv)    Bamboo production,
v)     Herbal gardening,
vi)    Coconut gardening,
vii)   Patipata (a plant used in making mat) production,
viii)  Cane production.

These programs have been introduced in all branches of the bank to grow more and more trees aiming to eradication of poverty, proper use of fallen land, increase of tree production facilitating herbal treatment and development of environment. Credit under these programs is collateral free upto Tk. 25,000/-. Interest rate is 8%. About 20043 beneficiaries have been provided with Tk 203.50 million since its inception (upto 30 September 2012).

Establishment of Breeding Farm of Black Bengal Goat Program:

This program has been taken to ensure supply of kids of Black Bengal Goats in order to support the national program of poverty alleviation through goat rearing. Under this program a farm comprising 50 she goats is considered as a small farm and a farm comprising 51-200 she goats is considered as a big farm. The loan is medium term. Credit limit is Tk. 30,000/- for a small farm consisting of 10 she goats ( with a he- goat). This credit limit is calculated for making up goat-shed, purchasing of she-goats & he-goat and initial feed cost. This limit is proportionated for a small farm having upto 50 number of she-goats. For a medium farm credit limit is to be calculated deducting the cost of goat shed. This cost is borne by the entrepreneur. About 304 beneficiaries have been provided with Tk 14.60 million since its inception (upto 30 September 2012).

Community Based Resource Management Project:

This project started in 2003-04 fiscal year. It is a joint venture project of BKB, IFAD and Dept. of LGED of GOB. The project is to be implemented in all of the 10 upa-zillas of Sunamgonj (a district) at 3 phases within 11 years. The project has five components such as: (1) Infra -structure Development, (ii) Development of Fisheries, (iii) Crop and livestock Development, (iv) Grass Roots Institutional Development and (v) Small Credit Bangladesh Krishi Bank deals with “small credit“ component of the project. LGED organizes the target people into 30 member groups. Bank Provides short and medium term loan. Maximum loan limit is Tk. 14,000/- to each member as short term and Tk. 27,000/- to each member as Medium term. The loan under this project is collateral free. Rate of interest is 15%. 1508 credit organization (each credit organization consists of maximum 30 beneficiaries) have been provided with Tk 190.35 million since its inception (upto 30 September 2008).

Poverty Alleviation through Production and Improvement of Sheep:

This is a government directed program which has been launched in the last part of the fiscal year 2004-05. Primarily this is to be implemented throughout the selected 22 upazillas under selected 11 districts of BKB`s jurisdiction. Directorate of livestock provides with extensive services while BKB provides credit from its own fund. Under this program credit amount upto taka 50,000/- is collateral free. Interest rate is 8%. This loan is to be repaid within four years in 6 equal installments including one year grace period. About 360 beneficiaries have been provided with Tk 3.80 million since its inception (upto 30 September 2012).

Annual Agricultural Credit Program

 Despite a long term trend of decline of share of agriculture sector in GDP, the sector still accounts for about 48 percent of the total employed persons calling for greater institutional and policy supports. Besides, the recent global food crisis on account of natural calamities, increased demand for food, use of crops to produce bio-fuel in the developed countries and protectionist policy adopted by the food exporting countries highlights the urgency of increasing domestic food production and attaining food security through increased investment in this sector and, timely and adequate supply of agricultural inputs including agricultural credit. Keeping in view, the importance of credit for ensuring sustainable growth in the agriculture sector, annual program based indicative disbursement targets of credit by the lending banks are designed. The banks themselves taking into consideration expected demand for credit for the year, previous years’ disbursement and the availability of fund set yearly targets of disbursement.

In recent time, agricultural and rural finance program seems to have boosted up as the private commercial banks began to participate along with the State-owned Commercial Banks (SCBs). The private and foreign banks came forward in distributing agricultural credit through their branch network in collaboration with NGOs, in addition to the regular agricultural credit disbursement by state owned banks and organizations.

Total Agricultural Credit Disbursement

YearBKBTotalBKB contribution in %Others

2004

13.5

30.2

44.70%

55.30%

2005

15.63

29.55

52.89%

47.11%

2006

17.65

32.8

53.81%

46.19%

2007

19.6

40.48

48.42%

51.58%

2008

22.8

49.57

46.00%

54.00%

2009

26.64

54.96

48.47%

51.53%

2010

31.5

52.93

59.51%

40.49%

2011

32.96

61.67

53.45%

46.55%

2012

38.24

69.92

54.69%

45.31%

Average

51.33%

48.67%

Stakeholder involvement

Government, Employees, Farmers, general people are the main stakeholders for BKB. BKB deals in retail way. Now, opening deposit account for the farmers at the beginning balance of 10 taka without any other maintenance cost.

Supply Chain security

Government, Employees, Farmers, general people are the main stakeholders for BKB. BKB deals in retail way. It’s the duty of all to secure the supply chain.

Recent CSR activities of Bangladesh Krishi Bank

  1. Blanket distribution among the poor: The winter season of this year brings severe cold wave all over the country. This cold wave acts as a curse to the poor people who have not enough protection against these natural phenomena. The poor people living in the streets, in the slums, rail station, pavement etc. have lack of warm cloth to fight against this freezing temperature. Many poor old people living in the remote rural areas died because of this year’s severe cold. The temperature is about 4 degree centigrade in the northern regions of the country. BKB’s honorable Chairman and Managing director have t6aken initiatives under the CSR program to distribute blanket among the poor people living in the remote areas of Bangladesh. First, they have distributed blanket among the poor people of Gopalgonj district. After that our managing director has distributed blanket in Madaripur, Manikgonj, Jamalpur districts etc. About TK. 4.00 Lac was involved in this blanket distribution program among the poor people in various districts of our country by the management of BKB under the CSR program.

(BKB’S honorable Managing Director Mr. Abdus salam distribute balnket among the poor villagers  at Gopalgonj district

2. Employees Benevolent Fund: About TK.25.00 lac was already spent during this from this fund under CSR program. BKB’s Management gave crest and monthly scholarship among the children of BKB officials who have got excellent academic result in PSC, JSC, SSC, HSC examinations. Besides this, BKB’s Managing Dierector has got the financial power of sanctioning TK.50000/- at a time for any BKB official as a support against sudden serious illness, accident etc. under BKB’s CSR activities.

3. Employees Welfare Fund: A lump sum amount has been given to all employees of BKB after retirement as a token of support from the Employees Welfare Fund.

4. Island Beautification Program: BKB has also spent a handsome amount of money under this program in the roads and highways of Dhaka to help enhancing the beauty of this mega city.

Banking Sector of Bangladesh

The commercial banking system dominates Bangladesh’s financial sector. Bangladesh Bank is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The banking system is composed of four state-owned commercial banks, five specialized development banks, thirty private commercial Banks and nine foreign commercial banks. The Nobel-prize winning Grameen Bank is a specialized micro-finance institution, which revolutionized the concept of micro-credit and contributed greatly towards poverty reduction and the empowerment of women in Bangladesh.

Specialized Development Banks

Out of the specialized banks, two (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank) were created to meet the credit needs of the agricultural sector while the other two Bangladesh Development Bank Ltd. (BDBL) are for extending term loans to the industrial sector. These two have been merged to create Bangladesh Development Bank Ltd. The Specialized banks are:

•    Grameen Bank
•    Bangladesh Krishi Bank
•    Bangladesh Development Bank Ltd
•    Rajshahi Krishi Unnayan Bank
•    Basic Bank Ltd (Bank of Small Industries and Commerce)
•    Bangladesh Somobay Bank Limited(Cooperative Bank)
•    Ansar VDP Unnyan Bank

CSR in Banking Sector of Bangladesh

Highlights of recent engagements of banks in CSR practices:

Out of forty nine scheduled banks in Bangladesh, forty six had engagement in CSR practices in some form or other from 2009.

• In terms of direct monetary expenditure, engagements of banks in CSR initiatives are increasing, particularly following issuance of BB guidance

Year  2009          2010           2011.

CSR expenditure (Million Taka)       226.4                    10.7            553.8

• CSR expenditures of banks have thus far largely been in the form of passive grants and donations. Banks were particularly responsive to emergency support needs of population groups affected in natural and manmade disasters.

• Apart from one-off grants and giveaways, some banks have engagements in longer term continuing support commitments, in areas of education and healthcare.

• Besides the passive engagements by way of grants/donations banks are now getting actively engaged in socially responsible business operations,

by way of increased lending to under-served economic sectors like agriculture and SMEs, towards fuller _inancial inclusion and faster poverty eradication.

• Banks are yet to adopt practices of prior stakeholder consultations (an important element indicated in BB’s guidance circular) in drawing up their CSR programs.

• Some banks have reported embracing commitment for environmental sustainability in own and client businesses. Their actions have not however gone beyond compliance with relevant government laws and regulations. Proactive initiatives of helping arrest environmental degradation, like adoption of more energy efficient, and harmful emission/effluence reducing internal practices and processes have been largely absent in the CSR initiatives, even of branches of foreign banks with such practices in their

home offices.

• Banks are yet to adopt separate reporting of their CSR activities in comprehensive formats such as the GRI.

B. CSR practices in banks : an analytical review

CSR expenditures by banks

The banking sector of Bangladesh has a long history of involvement in benevolent activities like donations to different charitable organizations, to poor people and religious institutions, city beautification and patronizing art & culture, etc. Recent trends of these engagements indicate that banks are gradually organizing these involvements in more structured CSR initiative format. The June 2008 BB Guidance circular suggested that banks could begin reporting their CSR initiatives in a modest way as supplements to usual annual financial reports, eventually to develop into full blown comprehensive reports in GRI format. Information on CSR expenditure available from annual reports of banks, compiled together, bring up the following picture of sectoral patterns:

Sectoral pattern of CSR expenditure reported by banksTaka in million
Segments Segments 2009Segments 2010Segments 2011
Disaster relief127.758.6125.1
Education14.330.594.8
Health68.6112.1245.5
Sports02.749.81.2
Arts & Culture0.00.80.3
Others13.1158.986.9
Total226.4 410.7 553.8

Following are some notable features observed from the CSR activities carried out by the banks :

1.  In a natural calamity-prone area like Bangladesh, there remains an existing and distinctive CSR agenda focused on the business contribution to tackling social crises in the affected area. Disaster relief and rehabilitation became the segment where the highest number of banks participated to help ease the sufferings of the affected people. In the current context, a desired move from the traditionally popular fields of education or health.

2. In the education segment, more and more banks have taken long-term or renewable scholarship programs for under-privileged but meritorious students for the persuasion of their studies instead of providing one-time recognition awards to good performers.

3.Some banks choose to provide continued financial support for maintaining operating costs of health care organizations. A bank undertook a continuous program called ‘Smile Brighter Program’ to perform as many operations possible per year on cleft-lipped boys and girls to bring back smile on their face.

4.Several banks have taken steps and introduced investment schemes to cater the needs of self-employment and poverty alleviation under which micro-finance is channeled to the target groups, such as poor farmers, landless peasants, women entrepreneurs, rootless slum people, handicapped people, etc.

5. A few banks have taken steps to introduce Interest-free Education Loan to poor and meritorious students to help bear monthly educational expenditure including food, accommodation etc. The loan is distributed to the selected students in monthly installments till their completion of studies up to the Masters Degree level.

6. A good number of banks have created separate Foundation/Trusts as non-profitable, nongovernmental organization, solely devoted to the cause of charity, social welfare and other benevolent activities towards the promotion CSR objectives. These banks are providing a certain percentage of the pre-tax profit/net profit each year towards its CSR activities.

Institutionalizing CSR at corporate level

The BB guidance circular suggested embracing of CSR with decisions taken at the highest corporate level (board of directors of the bank), and to choose action programs and performance targets through consultative processes involving the internal and external stakeholders concerned. As seen in the following table, 12 PCBs and 3 FCBs reported to have embraced CSR with decision at the highest corporate level, none of the SCBs and DFIs reported to have done anything in this regard. A total of 16 out of 30 PCBs and 1 out of 9 FCBs have formed separate Foundations or Trusts as non-pro_itable, non-governmental organization, solely devoted to the cause of charity, social welfare and other benevolent activities towards the promotion CSR objectives. These banks have also resolved to provide a certain percentage of the pre-tax profit/net profit each year towards its CSR activities. However, none of the banks reported to have adopted action programs and performance targets through consultative processes involving the internal and external stakeholders concerned as suggested in the guideline of June 1, 2008.

Institutionalizing CSR at corporate level
Compliance issue

SCBs

(4 Nos.)

DFIs

(5 Nos.)

PCBs

(30 Nos.)

FCBs

(9 Nos.)

Embraced CSR with decision at the highest corporate level (board of directors)

0

0

12

3

Set up separate   body/ division/unit in order tomainstreaming CSR activities

0

0

16

1

Adopted action programs & targets through consultative processes involving internal andexternal stakeholders

0

0

0

0

Ingraining CSR practices within the organization & Client Businesses

Against the suggestion in the BB guidance circular for ingraining environmentally and socially responsible practices within the organization, only four banks (1 DFI and 3 PCBs) reported having taken steps for adoption of socially and environmentally responsible practices in their own internal operations. The DFI mentioned that they have taken actions towards providing a modern, healthy and safe workplace and creating an environment conducive to learning and development. Regarding reducing the environmental impact as a result of their operation and business activity, 1 DFI and 3 PCBs reported to have taken positive actions towards it.

Ingraining CSR practices in the banks and their client businesses
Compliance issue

SCBs

(4 Nos.)

DFIs

(5 Nos.)

PCBs

(30 Nos.)

FCBs

(9 Nos.)

Adopted socially and environmentally responsible practices in own internaloperations

0

1

3

0

Providing a modern, healthy and safe workplace and creating a learning anddevelopment environment

0

1

0

0

Reduce the bank’s environmental impact as aresult of its operation and business activity

0

1

3

0

Foster CSR in their client businesses assessingthe social and environmental impacts of the projects seeking finance

1

2

8

0

Ensuring compliance of regulatory environmental and social requirements

1

2

8

0

Engaging with clients in assessing project’s social and environmental impacts beyond the regulatory requirements

0

0

1

0

As shown in the above table, 1 SCB, 2 DFIs and 8 PCBs have taken steps to foster CSR in their client businesses in various economic sectors, assessing the social and environmental impacts of the enterprises/projects seeking finance. These banks reported that they try to ensure compliance with environmental standards while financing industrial projects, and that they

have formulated environment policies in accordance with guidelines issued by the Government, in terms of which the environmental impacts are considered at the time of conducting Credit and Lending Risks Analysis. Projects likely to have adverse impact on environment are strongly discouraged by them. Some banks have also introduced guidelines requiring assessment of environmental and social impacts of the projects to ensure that operations of the projects would be eco-friendly. It is understood that, banks in Bangladesh in general try to ensure that enterprises/projects seeking finance comply with the environmental and social requirements that are compulsorily mandated by laws and regulations. However, most of the banks did not report this in their annual reports.

Financial Involvement of Banks in Bangladesh

The CSR guidelines issued by Bangladesh Bank put special emphasis on reaching out with financial services to the less well-off population segments of the community in order to speed up financial inclusion of the large socially disadvantaged rural and urban population segments; drawing them

with appropriate financial service packages and with financing programs innovatively designed to generate new employment, output and income.

It was observed that 4 SCBs, 3 DFIs, 29 PCBs and 3 FCBs have responded positively to this call and undertaken programs for speeding up financial inclusion of the large socially disadvantaged rural and urban population segments. Out of this programs-

1. 4 SCBs, 3 DFIs, 28 PCBs and 3 FCBs were engaged in self-employment credit and Small and Medium Enterprise (SME) lending programs, taken up solo or in association with locally active Micro Finance Institutions (MFIs). These programs were mainly designed to create productive new on-farm/off-farm employment. The banks also formally recognized their philanthropic obligation towards the promotion and development of small and medium industries sector.

2. 1 DFI has financed programs for installation of biomass processing plants and for Effluent Treatment Plants (ETPs) in manufacturing establishments.

3. In order to provide support to small landholder farmers of Bangladesh who play a crucial role in the development of the country, 4 SCBs, 3 DFIs, 25 PCBs and 3 FCBs have disbursed agricultural loans mainly through their rural branches for diversified production of crops, oilseeds, spices, vegetables, fruits etc. by rural households, financing the growers directly or through suitable intermediaries in the value chain, and have provided credit support for combinations of farming activities. Concurrently, credit lines are also extended to different NGOs to support the initiatives for agricultural development and alleviation of poverty in the rural areas.

Executive Summary

Apart from the benevolent social services by some business firms, the new concept of Corporate Social Responsibility (CSR) is an emerging one. Businesses are driven by government, labor unions consumer groups and above all by considering CSR as a long time investment in PR. In the context of Bangladesh, it is more relevant for the export-oriented industry, RMG sector, Banking sector etc. Globalization has made CSR practice an imperative for Bangladesh business. CSR concentrates on benefits of all stakeholders rather than just the stockholders. Awareness and sense of necessity for practicing CSR is becoming more and more pronounced as the country has to adapt itself to the process of globalization. But the overall status of CSR in Bangladesh is still very meager. Lack of Good Governance, absence of strong labor unions or consumer rights groups, and inability of the business community to perceive CSR as a survival pre-condition in export and PR investment local market constitute some of elements undermining the evolution of CSR practices. Some untoward incident like boycott from the importer has taught the local business community about the immense importance of CSR and adoption of this modern and competitive practice is gradually increasing in Bangladesh.

Companies are facing the challenges of adapting effectively to the changing environment in the context of globalization and in particular in the Banking sector. Although Consumer Rights Movement, enforcement of government  regulations and a structured view regarding the economic importance of CRS are not yet so widespread in the corporate world in Bangladesh, companies have gradually attaching more importance to CSR in the local market as well. They are increasingly aware that CSR can be of direct economic value.  Companies can contribute to social and environmental objectives, through integrating CSR as a strategic investment into their core business strategy, management instruments and operations.  This is an investment, not a cost, much like quality management. So, business organizations can thereby have an inclusive financial, commercial and social approach, leading to a long term strategy minimizing risks linked to uncertainty.

CSR in Bangladesh can also contribute a lot to community development. The corporate house can develop the community by creating employment, providing primary education, contribution to infrastructure development like road and high-ways and addressing environmental concerns. This is more relevant for a country like Bangladesh where the government interventions in these fields being augmented by corporate alliance can go a long way in developing the economy, society and environment.

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 Banking sector.

In case of practicing CSR our selected one Bank such as Dhaka Bank always provide greater value in their running operation.

Bangladesh economy has been experiencing a rapid growth since the ’90s. Industrial and agricultural development, international trade, inflow of expatriate Bangladeshi workers’ remittance, local and foreign investments in construction, communication, power, food processing and service enterprises ushered in an era of economic activities. Urbanization and lifestyle changes concurrent with the economic development created a demand for banking products and services to support the new initiatives as well as to channelize consumer investments in a profitable manner. A group of highly acclaimed businessmen of the country grouped together to responded to this need and established Dhaka Bank Limited in the year 1995. Dhaka Bank is most widely recognized for its donations to social causes and its IT investment. However it has recently stated that it will stop expansion on its ATM network as the current numbers have exceeded demand and hence diminishing returns (if any). Although it is widely believed it is a loss-making/subsidized unit which Dhaka Bank rationalizes as quasi CSR.

Origin of the Report

Since practical orientation is an integral part of the BBA degree requirement, I was deputed by the Department of Business Administration, ASA University Bangladesh to the project work.

During this three months’ I have complete my thesis paper in Dhaka Bank. Basically I am focusing on my report, how the Dhaka Bank doing their CSR activity. I have come across with different functions of this bank. the basic function of a Dhaka Bank and giving special emphasis CSR activity and performance of the CSR activity. This report has been originated as the course requirement of the BBA program. I hope the report will give a clear idea about the activities and role of Corporate Social Responsibility in Dhaka Bank. However, apart from that in this report different CSR activity analysis of this bank have been furnished to have an inner depth of the actual scenario.

 Objective of the Study

In case of completing this assignment I have a broad objective. I think before involving any type of term paper or assignment there is certain goal and objective should be formulized. The study has been undertaken with the following objectives:

  • To analysis¬ the pros and cons of the conventional ideas about the corporate social responsibility.
  • Analyzing the selected Bank’s CSR practices.
  • Critically synchronize the result of their performance or profit after practicing CSR.
  • How Banking organization handle the CSR activities.
  • To know are they truly responsible for the society or not?
  • Finally to fulfill the requirement of the project work under BBA program.

Scope of the Report

The scope of the study concludes CSR activity in case of corporate arena. Here it is also stated about the procedure of corporate CSR reporting as per Central Bank rules, local culture, and companies’ act 1994. The experiment was occurred on the Dhaka Bank Ltd. In this report I have focused on all the qualitative and descriptive data which include director’s report, auditor’s report, newspapers, articles, magazines and periodicals. In this report I have also focused how the Dhaka Bank participated in our local culture by their CSR activity. Dhaka bank plays the vital role in our social culture by their CSR activities which I have focused in this report. I have also stated in this report to the limitation and recommendation of Dhaka Bank in case of CSR activities.

Methodology of the Report

To prepare a report one is to depend on information to make it fruitful. I am also not exception of this. To prepare my thesis paper I have collected information from my assigned topic. The information that contains in the thesis is from both primary and secondary sources. As a requirement of analysis project my report is divided into different parts. First part contains introduction and concept of the Corporate Social Responsibility. Second part contains overview of the organization. Third part contains corporate information, management hierarchy and branches of organization. Fourth part contain about the CSR activity of Dhaka Bank. Finally last part contain about the findings, recommendation and conclusion. I have taken help of secondary source of information like annual report, catalogues, website and also different periodicals and articles which contains information about Dhaka bank Ltd.

To conduct a study properly designing of the process is essential. Because reliability and validity of the outcomes of a study is depends on the reliable data and information. In this connection some activities has been carried out collect data and information.

  • Data collection method: Relevant information has been collected from the web sites of the company.
  • Data type: We will use primary and secondary data in preparing in this assignment.
  • Sources: The internal, external and personal information will be used as the secondary data sources.
  • Approach: In preparing this assignment we will adopt the approach of internationalization process of business as mentioned in the book of “Corporate Social Responsibility, Keith Devis & blomstrong”.

Primary sources:

  • Direct interview and conversation with the assistant manager of Dhaka Bank.
  • Officials records, conversation with other colleagues.
  • Scheduled survey and informal discussion with professionals
  • The CSR Centre at the Bangladesh Enterprise Institute (BEI).

Secondary sources:

  • Annual report of the organization from 2009-2010.
  • Catalogues, websites, periodicals and different articles.
  • Manuals and brochures of Dhaka Bank Ltd and different publications of Bangladesh Bank.

 Limitation of the Report

In preparing this thesis paper I have faced some problems such as-

  • Lack of adequate knowledge and conceptual framework of CSR.
  • Lack of electricity.
  • Manipulation of CSR information by management contained in the paper.
  • Lacking of auditing process which is related to time and evidences.
  • Different CSR policies and methods are maintained in different organization.
  • Lack of proper understanding about the CSR information that are needed for the society.
  • Lack of proper understanding about the quality of CSR information which are needed for the society.
  • Lack of available information about different management bodies.
  • Lack of available information about operation of this organization.
  • Lack of practicing CSR Act for this Bank.

Structure of the Report

The report has two major parts. The background of the Dhaka Bank and the CSR activities of the Dhaka Bank.   Then again if I want to understand the CSR activities of the bank I need to have a clear view of the banking activities. That’s why the other aspect consists of the description of the bank with the CSR activities analysis of the bank to find out the performance of the institution.

Part One: This is Basically Introductory part, the objective and scope of the study, limitations, and research methodology has been highlighted.

Part Two: This part contains the concept of the Corporate Social Responsibility. This part is described, when CSR was introduced and why the bank following the CSR activities. This part also described the definition of CSR.

Part Three: In this part I have mentioned the different types of corporate Social Responsibility which was maintaining the Dhaka Bank. Dhaka Bank participated in our society in many ways. Sometimes Dhaka donate huge amount of money. In this part I have also focused the Dhaka Bank participated in our government sector.

Basic concept of Corporate Social Responsibility

Introduction

Social Responsibility is a concept well known in the corporate world and beyond that. Businesses all over the world have practiced only profit-making actions at past but not for long as the enterprises 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 that business has social obligations 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. The difference between the world standard and the Practice in Bangladesh shows the lacking here and the scope for development.

What is Corporate Social Responsibility (CSR)?

Definitely social responsibility includes the responsibility of people, groups, societies, and business organizations. Here raises the question: Why is there more interest in, and debate about, the social responsibility of business than about the social responsibility of other institutions? It is, of course, perfectly legitimate to raise the issue of the social responsibility of business. But we hear rather less about the social responsibility of, say, the churches, the media, trade unions, the professions, universities, or even the government. When people collectively organize themselves in business organizations of one kind or another, do those impersonal legal entities really acquire social responsibilities, which differ from those of other collective entities?

Many people are uneasy about the profit motive, suspecting that profits emerge only from exploitation. They fear that free enterprise encourages greed and selfishness. They are reluctant to accept the logic of Adam Smith’s famous theory of the invisible hand, which holds that business people promote the general interest more effectively by pursuing their own interests than by directly trying to ‘do good’. I suggest that this is why we hear little about the social responsibilities of the churches, charities, and so on. Business, in contrast, is assumed to have a problem about its social responsibilities because it is driven by profit-motives.

Although no consensus about the definition of corporate social responsibility (“CSR”) exists at present, it may be said to encompass “a company’s commitment to operate in an economically and environmentally sustainable manner, while acknowledging the interests of a variety of stakeholders. An organization’s policy and continuous action in such areas as employee relations, diversity, community development, environment, international relationships, marketplace practices, fiscal responsibility and accountability [all help determine its corporate social responsibility].

3 History of Corporate Social Responsibility (CSR)

Three waves of development

1. Community relations and contributions responsive to local pressures/needs and CEO/Senior Management – 1960s & 1970s

2. “Corporate citizenship model” based on ethical issues (BSR) including “the new Corporate or strategic philanthropy” – 1980s & 1990s

3. “Strategic alliances” closely aligned with corporate objectives – 1999 & beyond traditionally business operated exclusively on the mantra of maximizing profits. As long as “the firm could sell its good[s] or services at prices high enough to make a profit and survive, then its social obligation was fulfilled.”

However, shortly after large companies first emerged in the 1870s, debate quickly emerged as to the appropriateness of their conduct. The 1930s, upon the heels of the Great Depression, “signaled a transition from a primarily laissez-faire economy with industrial power and might in control to a more mixed economy” with a more activist role by organized labor and the government.

The New Deal had much to do with this transition. Further, the government’s creation of various socially oriented programs to ease the country’s economic woes resulted in more socially minded Americans.

Debates as to the appropriate role of business in society sharpened after World War II. Corporate philanthropy was well established by then, but the creation of public interest watchdogs and regulatory agencies such as the American Civil Liberties Union, the Sierra Club, and the Federal Trade Commission stimulated “new interest in business ethics, the standards by which to judge corporate and individual behavior within the moral framework of business and society.”

Howard Bowen’s Social Responsibilities of the businessman, often cited as the seminal text on corporate social responsibility by those in the field, was published in 1953. According to Bowen, the social responsibilities of a businessman consisted of obligations “to pursue those policies, make those decisions, or to follow those lines of action which are desirable in terms of objectives and values to society.” Soon afterwards, all three levels of government started enacting increasingly detailed legislation conducive to socially responsible behavior by businesses. Further, the four key regulatory agencies—the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the Environmental Protection Agency and the Consumer Product Safety Commission—were established from 1969 to 1972. These developments created “a whole new world for managers… all of a sudden they are hit with four enormous regulatory agencies making lots and many demands for information and for corrective action.”

A combination of factors propelled the subject of socially responsible business to the frontlines during the 1980s. First, by way of local and national campaigns, the consumer rights movement heightened scrutiny of corporate practices. Further, the Reagan-Bush Era, in which government restrictions on businesses were loosened, caused some business leaders to contrast “what appeared to be an alarming array of crumbling institutions— including weakened federal and local government agencies once charged with protecting those institutions—with the wealth they and their shareholders had amassed over roughly the same period, and [to recognize] an inherent imbalance.” Ultimately, all of this— government’s hands-off approach, business’s growing impact, the media’s and the public’s perception of government’s role, seemingly excessive profits,” along with the unparalleled increases in drug abuse, homelessness, and countless other social ills subtly shifted the public’s perception of business.

Corporate World in Bangladesh

As similar to any other third world developing nation, Bangladesh’s economic sector is still in the infant stage. It is yet to develop fully. There are very few worthwhile industries to be named. The Bangladesh corporate world is at presents just trying to satisfy its local needs. Whatever exports are there shares a little portion of the world market. The resources available are not enough to satisfy the local needs. Hence, companies still follow the classical model of economy, trying to maximize profits and targeting short run profits. As a result, there is hardly any concern about social responsibility. But now a day this scenario is changing. Now many local companies are getting involved in CSR. It is not long since foreign investors took interest in investing in Bangladesh. Along with them, they brought the concept of social responsibility and public welfare. A list of the foreign investors in Bangladesh is as follows: Lever Brothers, British American Tobacco, Standard Chartered Bank, HSBC, Reckitt Benckiser and so on. They have contributed a lot in terms of social responsibility in Bangladesh. Along with them Dhaka Bank, Square Group, Baximco group, Acme group, Rahimafroz, NBL, those local companies have started to keep pace in CSR sector.

Promoting CSR in Bangladesh: The role of the CSR centre

An increasing number of companies and businesses in Bangladesh are engaged in corporate social responsibility (CSR), the vast majority being the multinational corporations (MNCs). Compared to these MNCs, only a handful of local companies in Bangladesh practice CSR. However, a large number of local companies are engaged in philanthropic activities, ranging from donations for religious activities, to social and community development, to setting up facilities that provide healthcare services.

In addition, the private sector plays a major part in providing relief and rehabilitation in the aftermath of natural disasters. A number of local entrepreneurs have formed their own philanthropic foundations or trusts. With more awareness of the philosophy and implementation of CSR, these local firms can find new business opportunities and expand their social impact through wider CSR adoption and practice.

The CSR Centre at BEI

In Bangladesh, the private sector often does not have the resources or the expertise necessary to act on CSR opportunities. Against this backdrop, during various consultations with key stakeholders, an expressed need was felt for an institution to champion CSR in Bangladesh. The primary role of such an institution would be to engage in CSR advocacy and in the raising of awareness and understanding of CSR among stakeholders.

With a vision to champion CSR, the CSR Centre at the Bangladesh Enterprise Institute (BEI) was established in June 2005. As envisioned, it will be a private-sector led initiative, sustaining itself through various tools and services that it will provide. It will work through networks and partnerships and provide a platform for dialogue for various stakeholders to interact and exchange views and ideas. The Centre would be both a service provider and a facilitator.

The first of the two overarching objectives of the Centre is to establish and strengthen local institutional capacity to raise CSR awareness among the stakeholders, and serve as a champion for CSR adoption and implementation. The second objective is to design and implement various CSR interventions that will lead to the development of a CSR service market in Bangladesh.

Planned activities of the Centre include formulation of voluntary principles and standards for industries that are both economically viable and operationally feasible; development of tools and applications to evaluate, implement and monitor CSR adoption and practice thus enable businesses to be more responsive to its stakeholders; providing research on policies and procedures, strategies and standards, quantifying the cost and benefits of CSR to develop a better understanding of CSR in the context of Bangladesh; and enabling informed public dialogue on all aspects of corporate social responsibility with focus on the notion of accountability to all stakeholders,through research, conferences, publications and a website that will be continuously updated withimportant information on labour practices, sustainable development, regulation and public policy.

Since its launch last year, the CSR Centre at BEI has organized 12 roundtables as part of a dialogue series on CSR in Action. Organized monthly, the roundtable serves as a platform for exchanges of views, hear the perspectives of key stakeholders, and raise awareness on CSR practices and implementation challenges in Bangladesh. At each roundtable, three speakers representing a local company, a multinational company and a development agency are invited to present their experience of CSR practice in Bangladesh. The BEI has been advocating CSR within the private sector, through these regular dialogues to highlight the existing CSR practices of local and multinational companies and NGOs in Bangladesh. Till date, the roundtables have attracted over 300 participants who had the opportunity to listen to over 30 speakers from various NGOs, and corporate houses, both local and MNC.

Besides organizing the roundtables, the Centre has developed case studies to showcase best CSR practices in socially responsible firms from various sectors and a short documentary to highlight these practices. In addition, the Centre has developed an environmentally and Socially Responsible Business (ESRB) practices guideline for the banking sector, Taking into account the relationships between banks and other financial institutions on one side, and private enterprises on the other. The Centre will continue to develop products and services to serve as advocacy tools for sector-wide CSR adoption, which in turn will help foster an enabling environment for private sector growth and development.

Development and Analysis of Corporate Social Responsibility

Development and Analysis

Business ethics is a form of the art of applied ethics that examines ethical principles and

moral or ethical problems that can arise in a business environment.

In the increasingly conscience-focused marketplaces of the 21st century, the demand for
more ethical business processes and actions (known as ethics) is increasing.
Simultaneously, pressure is applied on industry to improve business ethics through new
public initiatives and laws (e.g. higher UK road tax for higher-emission vehicles).

Business ethics can be both a normative and a descriptive discipline. As a corporate
practice and a career specialization, the field is primarily normative. In academia
descriptive approaches are also taken. The range and quantity of business ethical issues
reflects the degree to which business is perceived to be at odds with non-economic social
values. Historically, interest in business ethics accelerated dramatically during the 1980s
and 1990s, both within major corporations and within academia. For example, today most
major corporate websites lay emphasis on commitment to promoting non-economic
social values under a variety of headings (e.g. ethics codes, social responsibility charters).
In some cases, corporations have redefined their core values in the light of business
ethical considerations (e.g. BP’s “beyond petroleum” environmental tilt).

The term CSR itself came in to common use in the early 1970s although it was seldom
abbreviated. The term stakeholder meaning those impacted by an organization’s activities
was used to describe corporate owners beyond shareholders from around 1989.

Approaches to CSR

Some commentators have identified a difference between the Continental European and The Anglo-Saxon approaches to CSR.

An approach for CSR that is becoming more widely accepted is community-based development projects, such as the Shell Foundation’s involvement in the Flower Valley, South Africa. Here they have set up an Early Learning Centre to help educate the community’s children, as well as develop new skills for the adults. Marks and Spencer is also active in this community through the building of a trade network with the community – guaranteeing regular fair-trade purchases. An often alternative approach to this is the establishment of education facilities for adults, as well as HIV/AIDS education programs. The majority of these CSR projects are established in Africa. A more common approach of CSR is through the giving of aid to local organizations and impoverished communities in developing countries. Some organizations do not like this approach as it does not help build on the skills of the local people, whereas community- based development generally leads to more sustainable development.

The Responsibilities of Corporate Social Responsibility

For CSR to be accepted by a conscientious business person, it should be framed in such a way that the entire range of business responsibilities is embraced. It is suggested here that four kinds of social responsibilities constitute total CSR: economic, legal, ethical, and philanthropic. Furthermore, these four categories or components of CSR might be depicted as a pyramid. To be sure, all of these kinds of responsibilities have always existed to some extent. But it has only been in recent years that ethical and philanthropic functions have taken a significant place. Each of these four categories deserves closer consideration.

Organization Overview

An overview of Dhaka Bank Limited (DBL)

Dhaka Bank Limited is the leading private sector bank in Bangladesh offering full range of Personal, Corporate, International Trade, Foreign Exchange, Lease Finance and Capital Market Services. Dhaka Bank Limited is the preferred choice in banking for friendly and personalized services, cutting edge technology, tailored solutions for business needs, global reach in trade and commerce and high yield on investments, assuring Excellence in Banking Services.

 Background of Dhaka Bank Limited

Dhaka Bank Limited is a scheduled bank that was incorporated under the Companies Act 1994, started its operation on July 1995 with a target to play the vital role on the socio-economic development of the country. Aiming at offering commercial banking service to the customers’ door around the country, the Dhaka Bank limited established 20 branches up-to this year. This organization achieved customers’ confidence immediately after its establishment.

Within this short time the bank has been successful in positioning itself as progressive and dynamic financial institution in the country. This is now widely acclaimed by the business community, from small entrepreneur to big merchant and conglomerates, including top rated corporate and foreign investors, for modern and innovative ideas and financial solution.

 Capital Base

Authorized Capital:   BDT 1000.00 million.
Paid up Capital     :   BDT 531.07 million (as on 31.12.2003)

 Dhaka Bank appoints CRISL for Credit Rating

Credit Rating Agency of Bangladesh Limited (CRAB) has assigned “A1 rating in the Long Term and “ST2 rating in the Short Term to the Dhaka Bank Limited (DBL). Commercial Banks rated in this long-term category are adjudged to be strong banks, characterized by good financials, healthy and sustainable franchises, and a first rate-operating environment. This level of rating indicates strong capacity for timely payment of financial commitments, with low likeliness to be adversely affected by foreseeable events. Banks rated in this short- term category are characterized with commendable position in terms of internal fund generation, access to alternative source of fund and moderate level of liquidity

Mission Statement

Mission

To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver Excellence in Banking.

Vision

At the Dhaka Bank,, we draw our inspiration from the distant stars. Our term is committed to assure a standard that makes every banking transaction a pleasurable experience. Our endeavor is to offer you razor sharp sparkle through accuracy, reliability, timely delivery, cutting edge technology, and tailored solution for business needs, global reach in trade and commerce and high yield on your investments.

 Goal

Our people, products and processes are aligned to meet the demand of our discerning customers. Our goal is to achieve a distinction like the luminaries the sky. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision – Excellence in Banking

 Slogan

Excellence in Banking

Motto

The Bank will be a confluence of the following three interests:
Of the Bank           : Profit Maximization and Sustained Growth.
Of the Customer     : Maximum Benefit and Satisfaction.
Of the Society         : Maximization of Welfare.

Objectives

Be one of the best banks of Bangladesh.

Achieve excellence in customer service next to none and superior to all competitors.

Cater to all differentiated segments of Retail and Wholesale Customers.

Be a high quality distributor of product and services

Use state-of the art technology in all spheres of banking.

Strategies Objectives of DBL

Their objectives are to conduct transparent and high quality business operation based on market mechanism within the legal and social framework.

• Their greatest concerns are to provide their customers continually efficient, innovative and high quality products with excellent delivery.

• Their motto is to generate profit with qualitative business as a sustainable ever-growing organization and enhance fair returns to the shareholders.

• Establish DBL as one of the top five successful Private Commercial Banks by 2010.

• Be committed to the community as a corporate citizen and contribute towards the progress of the nation.

• Build a strong deposit base.

• Introduce new products & services and upgrade existing products & services at comparatively low cost in order to assure quick respond to the changing demands in the market.

• Promote the well being of the employees and raise their morale.

• Strengthen corporate identity and values.

• Fulfillment of their responsibility to the government by paying taxes and Abiding by other rules.

• Bring the entire system under a very advanced IT platform.

• Socialize and present the bank to the community as a corporate partner.

• Encouraging and motivating the new entrepreneurs to establish industries and business in line with development of national economy.

• Enhancing savings tendency of the people by offering attractive and lucrative new savings scheme.

• Financing the foreign trade of the country both Export and Import.

• Enhancing the mobilization of savings both from urban and rural area.

Dhaka Bank Management Overview

1 Departments of DBL

Dhaka Bank maintains the jobs in a proper and organized considering their interrelationship that are allocated in a particular department to control the system effectively. Different departments of DBL are as follows:

Human Resources Division

Dhaka Bank Limited recognizes that a productive and motivated work force is a prerequisite to leadership with its customers, its shareholders and in the market it serves. Dhaka bank treats every employee with dignity and respect in a supportive environment of trust and openness where people of different backgrounds can reach their full potential. The bank’s human resources policy emphasize on providing job satisfaction, growth opportunities, and due recognition of superior performance. A good working environment reflects and promotes a high level of loyalty and commitment from the employees. Realizing this Dhaka Bank limited has placed the utmost importance on continuous development of its human resources, identify the strength and weakness of the employee to assess the individual training needs, they are sent for training for self-development. To orient, enhance the banking knowledge of the employees Dhaka Bank Training Institute (DBTI) organizes both in-house and external training. The major responsibilities of HR are as follows:

The major responsibilities of HR are as follows:

• Employee recruitment

• Posting

• Transfer

• Increment

• Established yearly performance bonus

• Provident fund

• Confirmation

• Training

SWOT Analysis on Dhaka Bank

Strengths

Strong corporate identity

According to the customers, DBL is the leading provider of financial services identity worldwide. With its strong corporate image and identity, it has better positioned itself in the minds of the customers. This image has helped DBL grab the personal banking sector of Bangladesh very rapidly.

Strong employee bonding and belongings

DBL employees are one of the major assets of the company. The employees of DBL have a strong sense of commitment towards organization and also feel proud and a sense of belonging towards DBL. The strong organizational culture of DBL is the main reason behind its strength.

Efficient Performance

It has been seen from customers’ opinion that DBL provides hassle-free customer  services to its client comparing to other financial institutions of Bangladesh. Personalized approach to the needs of customers is its motto.

Young enthusiastic workforce

The selection & recruitment of DBL emphasizes on having the skilled graduates & postgraduates who have little or no previous work experience. The logic behind is that DBL wants to avoid the problem of ‘garbage in & garbage out’. And this type of young & fresh workforce stimulates the whole working environment of DBL.

Empowered Work force

The human resource of DBL is extremely well thought & perfectly managed. As from the very first, the top management believed in empowering employees, where they refused to put their finger in every part of the pie. This empowered environment makes DBL a better place for the employees. The employees are not suffocated with authority but are able to grow as the organization matures.

Hospitable Working Environment

All office walls in DBL are only shoulder high partitions & there is no executive dining room. Any of the executives is likely to plop down at a table in its cafeteria & join in a lunch, chat with whoever is there.

Strong Financial Position

It has been seen that the net profit has been gradually rising over the years. Furthermore, DBL is not just sitting on its previous year’s success, but also taking initiatives to improve.

Weaknesses

High charges of L/C

Presently DBL charges same rates for all types of import L/C. But for import L/C of exports-oriented industry, DBL should reduce the charge of L/C. As a result, exporter will be benefited and the country will earn more foreign exchange. The commission often even rises up to 30%.

Discouraging small entrepreneurs

DBL provides clean Import Loan to most of its solvent clients. But they usually do not want to finance small entrepreneurs whose financial standing is not clean to them.

Absence of strong marketing activities

DBL currently don’t have any strong marketing activities through mass media e.g. Television. TV ads play vital role in awareness building. DBL has no such TV ad campaign. Although they do a lot of CSR activities compared to other banks.

Not enough innovative products

In order to be more competitive in the market, DBL should come up with more new attractive and innovative products. This is one of the weaknesses that DBL is currently passing through but plans to get rid of by 2010.

Diversification

DBL can pursue a diversification strategy in expanding its current line of business. The management can consider options of starting merchant banking or diversify it to leasing and insurance. As DBL is one of the leading providers of all financial services, in Bangladesh it can also offer these services.

Lack of Proper Motivation

The salary at DBL is very decent, but it lacks other sorts of motivation. Incentives such as bonuses are given for acquiring a particular figure, but all in all these are the only motivational factors

High Cost for maintaining account

The account maintenance cost for DBL is comparatively high. Other banks very often highlight this. In the long run, this might turn out to be a negative issue for DBL

Opportunities

Distinct operating procedures

Repayment capacity as assessed by DBL of individual client helps to decide how much one can borrow. As the whole lending process is based on a client’s repayment capacity, the recovery rate of DBL is close to 100%. This provides DBL financial stability & gears up DBL to be remaining in the business for the long run.

Country wide network                               

The ultimate goal of DBL is to expand its operations to whole Bangladesh. Nurturing this type of vision & mission & to act as required, will not only increase DBL’s profitability but also will secure its existence in the log run.

 Experienced Managers

One of the key opportunities for DBL is its efficient managers. DBL has employed experienced managers to facilitate its operation. These managers have already triggered the business for DBL as being new in the market.

Huge Population

Bangladesh is a developing country to satisfy the needs of the huge population, a large amount of investment is required. On the other hand, building EPZ areas and some Govt. policies easing foreign investment in our country made it attractive to the foreigners to invest in our country. So, DBL has a large opportunity here.

 El Dorado Program

It is software which enables customers to deposit and withdraw money from any bank with the cheque or deposit of any other bank. Although a select few has implemented this program, this poses as an opportunity for DBL as the number of transactions would drastically increase.

Bigger Market

Although the GDP per head decreased a bit in 2009 from 2008, there is a huge untapped market that requires loans and intends to deposit also.

 BASEL II

Implementation of BASEL II would definitely provide benefits. But it requires a lot of monitoring. For this DBL has formed BIU (BASELL II Implementation Unit). BASEL II is basically a framework set forth by Bangladesh Bank to reduce credit risk, operational risk and market risk. This would definitely aid DBL if it is stringently followed.

Threats

Upcoming Banks/Branches

The upcoming private, local, & multinational banks posse’s serious threats to the existing banking network of DBL: it is expected that in the next few years more commercial banks will emerge. If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against and win the battle of banks.

 Similar products are offered by other banks

Now-a-days different foreign and private banks are also offering similar type of products with an almost similar profit margin. So, if all competitors fight with the same weapon, the natural result is declining profit.

Default Loans

The problem of non-performing loans or default loans is very minimum or insignificant. However, this problem may rise in the future thus; DBL has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem.

Industrial Downturn

Bangladesh is economically and political unstable country. Flood, draught, cyclone, and newly added terrorism have become an identity of our country. Along with inflation, unemployment also creates industry wide recession. These caused downward pressure on the capital demand for investment.

Financial Crisis

Although people have recovered a bit from the shock, it may still pose as a threat. People are still hesitant to take loans or even deposit them.

Dhaka Bank receives CSR Award 2006

Dhaka Bank Limited, one of the leading private commercial banks of the country, has recently received The Corporate Social Responsibility (CSR) Award 2006, for their active participation in the various philanthropic activities. It may be noted that in line with motto of Dhaka Bank Limited towards rendering the best and quality services, Dhaka Bank Foundation was established on November 24, 2002 to act as a solid foundation, which would act as a catalyst in creating awareness on development issues. Managing Director of Dhaka Bank Limited Mr. Shahed Noman receive the award from Dr. Salehuddin Ahamed, Governor, Bangladesh Bank, at a function organized by the Bankers’ Forum at the CIRDAP Auditorium on Saturday April 26, 2008.
Among Dhaka Bank’s contribution towards corporate social responsibility few initiatives may be mentioned like donation to Asiatic Society of Dhaka, Prime Minister’s Relief Fund & Chief Adviser’s Relief Fund to mitigate the sufferings of devastated flood affected people of the country, donated passenger lift to BIRDEM Hospital at a cost of Tk 2.6 million, donated two haemodialysis machines to BIRDEM Hospital at cost of Tk 1.8 million, provided Tk 10 million to Center for Women and Child Health Hospital as donation for setting up pathological laboratory and imaging units, sponsored a 10- bed ward of the proposed Ahsania Mission Cancer & General Hospital by donating Taka 3 million, Installation of Donation Boxes for Ahsania Mission Cancer & General Hospital, Relief Operation for Flood Victims at the cost of Tk 5 Million, Sponsor of Jubo Mela, Support Society for the Welfare of Autistic Children (SWAC), extended support to the Tsunami affected victims of Sri Lanka by donating a cheque of US$ 10,000, renovate the Auditorium of Dhaka Reporters Unity, Donation of Tk 5 Million for Shaheed Ziaur Rahman Shishu Hospital, Bogra, Sponsored Uttara Sporting Club in Premier Division Cricket League and Inter Club Tennis Tournament in Gulshan Club, Sponsor of 6th Bonsai Exhibition & Competition, Financial Assistance for Chaayanaut Cultural Complex, Sponsor of 20th Bangladesh International Junior Tennis Championships, Sponsor of Bangladesh Under 19 Cricket Team, Sponsor of Chittagong Club Cricket Team in Twenty Cup Cricket Tournament in Kolkata, India, Sponsor of Anti Drug Debate Festival, Distribution of Winter Cloths by the Employees, Sponsorship for Bangladesh Eye Hospital, Sponsorship for SHEID Trust, Sponsorship for BADC School, Donation of Tk 1.2 Million to Center for Women & Child Health Hospital per year from 2006, Donation of Tk 1.2 Million to BIRDEM Hospital per year from 2006, Assistance to Educational Trust of Scholastica, Sponsor Dhaka Bank 21st Bangladesh International Junior Tennis Championship, Sponsor 2nd Dhaka Bank Independence Day Inter Club Tennis, Sponsor ICC World Cup Fact Book, Sponsor of Dhaka Bank Victory Day Hockey 2007, Sponsor of 1st Dhaka Bank Cup Golf Tournament 2008, Sponsor of Dhaka Bank Shaheed Smrity Hockey 2008, Sponsor of 22nd Bangladesh International Junior Tennis Championship in 2008 and Sponsor of Dhaka Bank Independence Day Hockey Tournament 2008.

Profit Maximization due to CSR

Those organizations that practice CSR more obviously a significant change will be occurred on their profit on that organization. Dhaka Bank’s statement is given below-

From the above statement we have found that in 2008 company’s EPS was 39.42 but in 2009 it is increased in 45.09 because of company’s efficient activities such as effective corporate decision, effective operation, cost minimizing, CSR practicing etc. So we can say in case of profit maximizing there is a significant impact of CSR.

Findings and Recommendations

Findings

After analyzing all the information, the following findings are originated:

  1. Dhaka Bank has been participating in our society by their CSR activities.
  2. Dhaka Bank Foundation donated Taka 1.2 Million to BIRDEM.
    1. Dhaka Bank Foundation donated Taka 1.2 Million to CWCH.
    2. Dhaka Bank participated in Career Fair
    3. Dhaka Bank heavily serious for maintaining and representing the Bangladeshi culture (customs, values, belief etc).
    4. Dhaka Bank arrange different traditional occasion such as shoto borsher Gaan, little poet, making different monument, traditional fair etc.
      1. Dhaka Bank emphasises on basically public welfare such as donated money for kidney transplant, eye hospital etc.
      2. Dhaka Bank largely emphasises on social culture and environment.
      3. Dhaka Bank sometimes taking steps for beautification in our city.
      4. Dhaka Bank also aranging a concert party in our different occasion.
      5. Dhaka Bank Presents Umbrella to Bangladesh Police.
      6. Dhaka Bank employees donate one day’s salary to help flood Victims.
      7. Dhaka Bank donates Tk 50 Lac to Bangladesh Army Relief Fund.
      8. Dhaka Bank donates Tk 10 Lac to Prime Minister’s Relief Fund for Cyclone Aila Victim.
      9. Dhaka Bank welcomes Bangladesh Hockey Team.
      10. Dhaka Bank maximized their profit due to the CSR activity.

Recommendations

From the analyzing whole assignment we have understand that in modern age for long term survival every company should involve in CSR activities. In where they are operating every company should liable for developing that country’s employment, infrastructure, culture etc. Our selected Bank’s are already involve those activities for long term survival as well as get them free from social liability. To improve Dhaka Bank Corporate Social Responsibility activity the following suggestions are to be followed:

  1. Dhaka Bank should increase their social activity.
  2. If Dhaka Bank increases number of employee they can provide more satisfactory service.
  3. Dhaka Bank should increase the number of PCs with updated hardware and software.
  4. To create better client the bank should increase the social service activity.
  5. Whenever people notice that the Dhaka Bank contributes and participate all social welfare activities than people become impress on that Dhaka Bank Ltd. As a result their profit obviously becomes increase because of (high share price, employee loyalty, Govt. favor, social assistant etc).
  6. Dhaka Bank Limited should participate in our local festivals.
  7. Dhaka Bank can helps to our government for the development of roads and highways.
  8. Dhaka Bank should take some necessary steps for the tree plantation.
  9. Dhaka Bank can setup some primary school in the rural area.
  10. Dhaka Bank can sponsor in our local festivals.
  11. Dhaka Bank should providing support and assistance to the poor people who cannot work in the field.
  12. Dhaka Bank can try keeping our city neat and clean.
  13. In our areas people sometimes arranging festivals where Dhaka Bank should participate.
  14.   Finally, Dhaka Bank can reducing unemployment problem by their social welfare activities.

Conclusion

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. 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.

Leave a Comment

(0 Comments)

Your email address will not be published. Required fields are marked *