Banks’ CSR spending rises by 47.22pc in July-Dec

New AgeMar 11,2020

Banks’ CSR spending rises by 47.22pc in July-Dec

Banks’ spending on corporate social responsibility increased by 47.22 per cent or Tk 277.50 crore in the second half of 2019 against expenses for the segment in the same period in the previous year.

A latest Bangladesh Bank report on CSR spending released on Wednesday showed that the scheduled banks spent Tk 408.58 crore in July-December last year against their spending of Tk 277.50 crore in the same period of previous year.

As per the CSR expenditure guidelines of the BB, banks are allowed to spend money on philanthropic purposes from their net profit earnings with no limit on expenditure.

The expenditure will be participatory and not mandatory.

Although the banks increased their CSR spending, the entities failed to follow the BB’s instruction on sector-wise spending limit.

Of the CSR expenses, banks spent the highest Tk 123.76 crore on disaster management, representing 30.29 per cent of their total spending, in violation of the BB guidelines on CSR expenditure that do not allow the banks to spend more than 10 per cent of the CSR allocation on disaster management.

The banks were instructed to spend a highest 30 per cent of their CSR outlay on the education sector, 20 per cent on the health sector and 10 per cent on climate risk or disaster management.

For the education sector, the banks spent 29.51 per cent or Tk 120.56 crore of the entities’ total CSR budget.

Apart from these, the banks spent Tk 49.65 crore on the health sector and Tk 22.70 crore on the cultural sector, among others.

The allocations for the health and cultural sectors represent 12.15 per cent and 5.56 per cent respectively of the CSR spending.

Of the banks, Islami Bank Bangladesh spent the highest amount of Tk 94.28 crore on CSR, followed by Dutch-Bangla Bank and Exim Bank spending Tk 41.2 crore and Tk 38.7 crore respectively.

Bankers said that the banks spent the amount either through their own channels or through donations to the Prime Minister’s Relief and Welfare Fund.

The banks get tax rebates on spending under CSR programmes but they will not enjoy the tax rebate if they spend beyond the limit, said a high official of the central bank.

At the end of December last year, total defaulted loans hit Tk 94,313 crore.

Apart from the banks, the non-banking financial sector’s CSR spending stood at only Tk 2.75 crore.