Banks’ CSR spending falls 9%

Expenditure related to corporate social responsibility (CSR) among the country's banks fell by 9.22 percent in the first half of this year compared to the same period last year.

From January to June this year, CSR expenditure of the country's 61 banks stood at Tk 571 crore, down from Tk 629 crore in the same period last year, as per the latest data from Bangladesh Bank (BB).

Bankers said that slow growth in profits amid the ongoing economic crisis was the main reason for the reduction.

During the first half of this year, profits of 35 listed banks in Bangladesh dropped 9 percent year-on-year to Tk 4,160 crore.

Banks face a number of challenges at present, including high non-performing loans (NPLs), liquidity shortage and a lack of corporate governance, which led to reduced CSR expenditure as per bankers.

Till March of this year, NPLs stood at Tk 1,31,620 crore or 8.80 per cent of the total disbursed loans, which is a 16.02 percent increase year-on-year, as per BB data.

Private commercial bank Dutch-Bangla Bank had the highest CSR expenditure in the first half of this year, spending Tk 61.32 crore. The bank spent Tk 39 crore on CSR expenditure in the same period last year.

Islami Bank Bangladesh spent only Tk 46 crore on CSR-related expenses this year compared to last year, when it had spent Tk 202 crore, the most among banks.

Elsewhere, Al-Arafah Islami Bank spent Tk 42 crore, Shahjalal Islami Bank Tk 38 crore, Jamuna Bank Tk 38 crore, Mercantile Bank Tk 35 crore, United Commercial Bank Tk 30 crore and Exim Bank Tk 28 crore on CSR-related activities.

However, 10 banks have yet to spend a single penny on such initiatives due to ailing financial health.

Bankers said they spent most of the money on education, healthcare, and disaster management and climate change adaptation as per the central bank's guidelines.

As per guidelines, banks have to invest 30 percent of their CSR fund on education, 30 percent on healthcare and 20 percent on disaster management and climate change adaptation.

Additionally, they have to send five percent of their CSR funds to the Prime Minister's Education Assistance Trust.

From January to June of this year, banks spent Tk 216 crore in the healthcare sector, Tk 90 crore in the education sector and Tk 49 crore on disaster management and climate change adaptation.

The remaining Tk 214 crore was spent on other sectors, as per BB data.