CHAPTER 1

INTRODUCTION

1.1 Overview

This is the time of industrialization and commercialization of the entire service sector. All

the Companies are moving forward for the profit maximization and the profit which they

are gaining it is from the society so the companies must take it as obligation towards the

society which is to be repaid in terms of social banking towards the benefit of society.

This social Banking means to contribute for the society while conducting the work within

the boundary of ethics and that is called Corporate Social Responsibility. The CSR

practices have been started a long time ago but in India its speed of implementation were

very slow. At present there is an increasing awareness about CSR, Sustainable

Development and Non-Financial Reporting, the credit goes to RBI in focusing the CSR

practices in Indian Banking Sector, by passing a circular in the year 2007, December,

directed banks to undertake CSR initiatives for sustainable development.

1.2 PHASES OF CSR PRACTICES IN INDIA

[1] According to Michael Hopkins (2003), CSR is concerned with treating the internal

and external stakeholders of the firm ethically or in a socially responsible manner and the

wider aim of corporate social responsibility is to create higher and higher standards of

living, while preserving the profitability of the corporation, for its stakeholders.

[2] The CSR phases as its development can be divided in to four phases are as follows:

Phase Key Thrust Key Strategy

Phase I

(Till 1914)

CSR motivated by

charity and philanthropy

The oldest form of CSR was motivated

by charity and philanthropy with direct

influence from culture, religion, family

tradition, and industrialization process.

Phase II

(Till 1914-1960)

CSR for India’s social

development.

Dominated by the country’s struggle for

independence and

influenced fundamentally by Gandhi’s

theory of trusteeship for consolidation

and amplification of social development.

Gandhi’s reform programs which

included activities that sought in

particular abolition of untouchability,

women’s empowerment and rural

development.

Phase III

(Till 1960-1980)

CSR under the paradigm

of the mixed economy

The paradigm of mixed economy with

the emergence of legislation on labor and

Environmental standards, affected the

third phase of Indian CSR This phase Is

also characterized by a shift from

corporate self regulation to strict legal

and public regulation of business

activities.

Phase IV

(Till 1980

onwards)

CSR at the Interface

between philanthropic

and business approaches

Indian companies and stakeholders

began abandoning traditional

philanthropic engagement and, to some

extent, integrated CSR into a coherent

and sustainable business strategy, partly

adopting the multi stakeholder approach.

1.3 OBJECTIVE OF THE STUDY

The Present study aims to evaluate the different dimensions of Corporate Social

Responsibility by studying the following Objectives:

o To Study the concept of CSR;

o To Study the Major areas of CSR initiatives in Indian Banking Sector.

o To Study the CSR Reporting Practices in Indian Financial Sector

. o To Focus on the Present Status of CSR in Banking.

1.4 METHODOLOGY

Research methodology is the blue print of the research which is going to be conducted.

The Research design in this study is Descriptive research design, Random Sampling

technique is used for selecting the Banks for this Study in which the major players two

from Public Sector and two from Private Sector have been selected for the study i.e.

SBI,PNB,HDFC and ICICI. The Data is collected from secondary sources particularly

from concerned Banks Annual Report, Web sites, newsletters and data from various

journals. The concept of corporate Social Responsibility (CSR) is not a new one. But its

focal point changes with the changing requirements of business and varying social needs

Corporate Social Responsibility recognizes that business firms have not one but many

different kinds of responsibility, including economic and legal responsibility. In 1960,

CSR surfaced as an attempt to link business with society. The underlying belief in this era

was to apply the resources in a socially responsible manner i.e., the promotion of social

welfare along with the economic development. The main argument was to employ

economy’s means of production in such a way that production and distribution could

enhance total socio-economic welfare.

1.5 LITRETURE REVIEW

The Commission defines corporate social responsibility as “the responsibility of

enterprises for their impacts on society”. To fully meet their social responsibility,

enterprises “should have in place a process to integrate social, environmental, ethical

human rights and consumer concerns into their business operations and core strategy in

close collaboration with their stakeholders”

According to Bert Scholtens, “finance relates to the sustainability of economic

development and to CSR. The three financing modes open the potential to direct the

economic activities in a way that takes account of social, ethical, and environmental

issues”.

According to Jacob M. Rose, in his study findings indicate that directors employ

prospective rationality cognition, and they sometimes make decisions that emphasize

legal defensibility at the expense of personal ethics and social responsibility. The results

suggest that additional ethics education will have little influence on the decisions of many

business leaders because their decisions are driven by corporate law, rather than personal

ethics.

Paul C. Godfrey and Nile W. Hatch they studied on the two aspects one; Examination of

the marginal utility of various CSRs by firms. Second, researchers must focus their tools

on individual firm-stakeholder

Md. Habib-Uz-Zaman Khan suggests that “the effects of corporate governance (CG)

elements on CSR disclosures in reporting information of Bangladeshi listed commercial

banks are high. Non-executive directors and existence of foreign nationalities have been

found the significant impact on the CSR reporting

Sanjay Kanti Das (2012),in his study presented that development of Corporate Social

Responsibility (CSR) is very slowly in India though it was started a long time ago. In his

view CSR has been assuming greater importance in the corporate world, including the

banking sector. There is a visible trend in the financial sector of promoting International

Journal of Scientific and Research Publications, Volume 3, Issue 12, December 2013 3

ISSN 2250-3153 www.ijsrp.org environment friendly and socially responsible lending

and investment practices. The Govt. of India is pursuing the matter relating to CSR and

also drafted guidelines for CSR practices time to time

Suman Kalyan Chaudhury, Sanjay Kanti Das, Prasanta Kumar Sahoo(2011),said in their

study that, At present, the world over, there is an increasing awareness about Corporate

Social Responsibility (CSR), Sustainable Development (SD) and Non- Financial

Reporting (NFR). The contribution of financial institutions including banks to sustainable

development is paramount, considering the crucial role they play in financing the

economic and developmental activities of the world.

CHAPTER 2

CSR INITIATIVES BY BANKING SECTOR

2. 1Major Areas of CSR Along With Their Expenditure on CSR Activities

(a) State Bank of India:

Corporate Social Responsibility has always been a part of the State Bank of India

covering various social, environmental and welfare activities. Their pledge towards CSR

is reflected in their CSR vision statement “(Serving the Community Everywhere)

The comparative chart of CSR spends for the last three years is as under (in crores)

CSR Activities 2009-2010 2010-2011 2011-2012

National Donations

(To provide succor to victims of

natural calamities)

5.15 2.00 5.50

Normal Donations & other direct

activities

14.57 22.44 65.68

Total CSR spend

For the first time in the last decade,

the budget For CSR spend (normal

donations and other direct activities)

has been surpassed even though the

allocation was much higher than the

previous years.

19.72 22.44 71.18

Table no. -1 (source – SBI annual report)

By analyzing the table no.1 we can see that in the year 2009 the expenditure of bank in

different CSR activities were 19.72 crores which is increased in the year 2012 up to 71.18

crores ,which is the good symbol for the Indian Economy.

Sector wise Deployment

The breakup of sectoral deployment of SBI’s CSR spends during the year has been as under:

CSR Activities Amount (` in crores)

National Donations 5.50

Supporting Education 38.33

Supporting Healthcare 15.03

Assistance to underprivileged 5.37

Supporting Culture 1.75

Research & Development 3.75

Environment Protection 0.67

Other projects 1.38

Total 71.18

Table no. -2 (source – SBI annual report)

b) Punjab National Bank

PNB is also a big player of Banking Sector under Public Sector which has contributed in

a lot in CSR strategies like Sustainability, Corporate volunteering, social investment,

health, collaboration, and green initiatives. At the march 2011, credit to Micro Small &

Medium Enterprises sector stood at RS 45, 296 crores. Bank has financed 6400 rickshaw

amount disbursed was RS 629 lakh in the year 2010. This Bank has been awarded

“Golden Peacock Award” for CSR for the year 2011 by Institute of Director (IOD).

Priority Sector Credit (As on last reporting of March 2011)

ICICI Foundation Amount (Millions)

Programmes CSO Partners 10

Digantar Shiksha Evam Khelkud Samiti 12.28

Tata Institute of Social Sciences 9.56

The America India Foundation Trust 3.00

Eklavya Foundation 6.52

Jana Sanskriti Centre for Theatre of the

Oppressed

2.08

Vikramshila Education Resource Society 2.00

Centre for Learning Resources 1.81

Janagraaha Education Support

Organisation

1.63

Save the Children 0.90

Other Grants / Project Expenses 1.10

ICICI Group CSR

Give India - ICICI Bank Read to Lead

Project

26.59

Dignity Foundation 25.00

Bhavishya Alliance 1.61

Give India – Speak for Smiles 7.00

TOTAL 112.93

Table no. - 4 (source – ICICI annual report)

CHAPTER 3

REPORTING OF CSR PRACTICES BY INDIAN

FINANCIAL INSTITUTIONS

The concept of CSR reporting has been described by different scholars in different

ways.CSR reporting calls for reflection of corporate ethical practices, transparency,

sensitivity to the environment issues, social commitment and labour welfare practices of

business houses. It is observed from Kamayog’s CSR rating (2009) that most of the

Indian banks do not mention CSR on their annual reports or on websites.

CSR rating of Indian financial Institutions

level(0-5) No. of banks/fis Name. of banks/fis

Level 0 3 City Union Bank, Vysya Bank and Vijay Bank

Level 1 6 Central Bank of India,Indusind Bank, Karnataka

Bank,Kotak Mahindra Bank,South Indian Bank &

UCO Bank

Level 2 15 Allahabad Bank,Andhra Bank, BOB,Bank of India,

Bank of Maharashtra Bank,IDBI bank,Bank of

Rajasthan,Corporation Bank,Federal Bank,

HDFC ,Indian overseas,State Bank of Bikaner,State

Bank of Mysore, State Bank of Travancore and

Syndicate Bank.

Level 3 11 Axis Bank,Canara Bank,Dena Bank,ICICI

bank ,Indian Bank,ING Vysya Bank, Jammu and

Kashmir Bank, Oriental Bank, Punjab National

Bank,SBI and Union Bank of India.

Level 4 1 Yes bank

Level 5 Nil Nil

Source: Karmayog’s CSR rating, 2009.

CHAPTER 4

PRESENT STATUS OF CSR IN BANKING

New companies bill is a step forward: Clause 135- corporate social responsibility.

The new Companies Bill seeks to make it mandatory for companies of a certain financial

strength to spend at least 2% of their average net profit over three years on corporate

social responsibility. The Bill, which would replace the nearly six-decade old Companies

Act, 1956, was cleared by the Rajya Sabha on 8 August while it had received the Lok

Sabha nod in December last year. As per the new norms, the two per cent spending on

CSR is not mandatory but reporting about it is mandatory. In case, a company is unable

to spend the required amount, then it has to give an explanation for the same. The CSR

norms, that would come into effect once the President gives his assent, would be

applicable to companies having either net worth of Rs 500 crores or more; turnover of Rs

1,000 crores or more; or net profit of Rs 5 crores or more.

RBI revises bank KYC guidelines, advises new set of norms on July 1 2013

In a bid to strengthen its safeguards against money laundering, the Reserve Bank of India

(RBI) issued the master circular revising certain guidelines related to bank Know Your

Customer (KYC) policy. It suggested creating Unique Customers Identification Code

(UCIC) while bringing changes in new account opening process .On July 16, 2013, RBI

fines 22 banks Rs 50cr for violation of know your customer which includes SBI, PNB

and 20 more lending banks.

CHAPTER 5

CSR PRACTICES IN INDIAN BANKS

5.1 CSR PRACTICES IN BANKS Banking in India originated in the last decades of the 18th century with the

establishment of General Bank of India in 1786 and the Bank of Hindustan set up in

1870 (however both of the banks are now defunct). The oldest bank existing in India

is the State Bank of India and the apex regulatory authority of Indian banking sector

is Reserve Bank of India. At present, the commercial banking structure in India

consists of Scheduled Commercial Banks & Unscheduled Banks. Since

independence, banking in India has evolved through four distinct phases:

Foundation phase (1950s till the nationalization of banks in 1969),

Expansion phase (mid-60s to 1984),

CSR Practices in Indian Banking Sector 857

Consolidation phase (1985 to 1991) and

Reforms phase (since 1992).

In recent years an attempt has been initiated to ensure socially responsible behavior

of banking sector in a more organized manner. The CSR in Indian Banking Sector is

aimed towards addressing the financial inclusion, providing financial services to the

unbanked or untapped areas of the country, the socio-economic development of the

country by focusing on the activities like, poverty eradication, health and medical

care, rural area development, self employment training and financial literacy

trainings, infrastructure development, education, and environmental Protection etc.

RBI also insisted upon taking measures for sustainable development of economy

through realizing the dire necessity of CSR. Reserve Bank of India (2007) stated that

CSR entails the integration of social and environmental concerns by companies in

their business operations and also in interactions with their stakeholders. The major

thrust areas for CSR practice in Indian banks are common in public sector and

private sector banks. These areas include children welfare, community welfare,

education, environment, healthcare, poverty eradication, rural development,

vocational training, women's empowerment, protection to girl child and employment.

5.2 SOME RECENT INITIATIVES BY INDIAN BANKS

In order to address ecological and environmental concerns, Reserve Bank of

India has decided to go for energy efficient buildings. Bureau of Energy

Efficiency has awarded the first star rating labels to the Bank’s building at

Bhubaneswar and New Delhi. The four buildings located at Bhubaneswar,

Chennai, Kochi, Kolkata are recognized as 5- star building under the rating

system.

Small Industries development bank of India

(the prime financer to small and medium scale industries) has also incorporated

environmental and social aspects in its core business activities so as to ensure

sustainable development. It is providing concessional and liberal credit to

medium and small scale industries which are initiating energy saving projects and

are adopting pollution control measures.

State Bank of India (SBI),

the oldest bank has also adopted green banking initiatives in its lending

operations. Recognizing the warning of global warming bank has decided to

initiate urgent measures to combat the climate change through envisaging two

pronged approach viz. i) to reduce the Bank’s own carbon footprint and ii) to

sensitize the Bank’s clients to adopt low carbon emission practices. ICICI bank

has shown its commitment to corporate environmental stewardship and extended

a great support to clean technology projects. It has also liberalized credit to zero

emission vehicles. IDBI has set up carbon desk. IDBI has come forward to join

hands with Smile Foundation in social development initiatives. The bank has

contributed 14 personal computers to Smile Foundation which have been utilized

in four different projects being implemented through as many partners in Delhi

and NCR. YES BANK, India’s fourth largest private sector Bank, in association

with CARE India, a humanitarian relief and development NGO working in India

for more than 60 years, has launched India’s first Social Deposit Account (SDA).

“The Social Deposit Account (SDA) is an evolution of the regular Fixed Deposit

account where customers have the option of donating their interest income to a

social cause through CARE India. It also won Best CSR Practice Award in

March 2011. Axis Bank Foundation (ABF) aspires to contribute in the areas of

education and healthcare. It has set up various programmes which provide

educational support, in order to meet these goals. Balwadis- the Foundation has

identified the need to focus on early childhood programs for 2 - 6 year olds. As

part of our initiatives to support education, we help develop learning places for

young children living in large urban slum clusters so that it creates a strong

foundation and inculcates social and cultural awareness in them. HDFC Bank has

been working with NGOs for providing non formal vocational and technical

education 860 Deepika Dhingra & Rama Mittal programs as well as skill up

gradation courses to enable sustainable employment and income generation for

economically weaker sections.

5.3 INITIATING CSR PROGRAMS IN BANKS/ FINANCIAL INSTITUTIONS:

Embracing CSR has to begin with decision at the highest corporate level (board of

directors), and adoption of action programs and performance targets chosen in

consultative processes involving the internal and external stakeholders concerned. A

first time CSR program of a bank or financial institution would be likely to include action

plans for:

i) Ingraining environmentally and socially responsible practices within the

organization;

ii) Engaging with borrowers in scrutiny of the environmental and social impacts of

their proposed undertakings (along the PKSF 2004 or Equator Principles

2006 guidelines, as relevant);

iii) Reaching out with financial services to the less well off population segments of the

community (with own initiatives along lines indicated at paragraph 1.2 above); and

iv) Community investments by way of donations to initiatives of Civil Society

Organizations (CSOs), NGOs and institutions involved in health, education and

culture; for social and environmental improvement including nutrition, health

and education in the disadvantaged population segments (most banks and

financial institutions in Bangladesh already have significant outlays of such

charitable expenditures, these can fit in appropriately as elements in the new structured

CSR programs).

CHAPTER 6

THE FUTURE OF CORPORATE SOCIAL

RESPONSIBILITY

Companies today are increasingly sensitive about their social role. The companies

not only concentrate on how they will position their product or how they will sell it but

also they have a social strategy because they have started feeling that brands are built not

only around good quality of the product; but also around emotions and values that people

ascribe to those products

In addition to be more precisely defined, the CSR movement is evolving

following some trends that I intend to describe briefly:

First, there are no more a few companies, which have consecrated themselves to

this new doctrine, but the majority of large enterprises have introduced it in their

agenda. Philip Kotler and Nancy Lee in their book “Corporate Social

Responsibility” indicate that charitable giving has risen from $9.6 b in 1999 to

$12, 19 b. In spite of some opponents like the survey in The Economist last year

which maintains that CSR is eroding the basis of the free enterprise system, every

time more this new doctrine is catching the attention of business people.

Second, since the term “triple bottom line” (people, planet and profit) was carried

in 1994, an accelerating progression from early concerns about safety, health and

environment to a growing range of social concerns have been seen, among them

human rights and diversity. Recently other concerns like fair trade pricing and fair

wages as well as socially increasingly have increasingly made headlines. There is

an increasing conviction that there is not a conflict but a positive correlation

between CSR and profitability and that profit can go hand-in-hand with social and

environmental responsibility.

Third, the social responsible enterprises every time more publish their activities

for their shareholders and the public in general, either in their general annual

report or in CSR specific reports. According to a survey of KPMG in 2002, 45%

of co portions issued environmental, social or sustainability reports compared

with 35% in their 1999 survey. Greater transparency is a means to improve

accountability and trust.

Fourth, CSR has ceased to be a form of philanthropy so that it is no more the case

to sign a check at the end of each financial year, after a positive result - and CSR

enters into the normal activities of the corporation before declaring its profits and

becoming a all year around responsibility. It is a shift to making long-term

commitments to especial social issues providing more than cash contributions,

sourcing funds from business units as well as philanthropic budgets, forming

strategic alliances, etc. CSR is becoming as much as anything a way of thinking

about and doing business. Corporate investment decisions driven by quarterly

profit earnings are short-sighted and sacrifice long-term wealth creation.

Fifth, it is no longer the owner or the CEO the one which decides to write the

check, but it is the collective commitment of all the corporation from the CEO

until the last employee; it is precisely the employees’ satisfaction one of the

objectives of CSR. There is an increasing awareness of CSR among the

workforce.

Sixth, before a social activity generally dissociated from the cooperation, the

trend is that the activity be totally related with the core business of the

cooperation, its products or services (for instance when an electronic corporation

decides to train the students of a school on the use of computers).

Seventh, the establishment of a social norm to do good. As William Clay Ford

Ford Motor Company CEO “there is a difference between a good company and a

great company. A good company offers excellent products ands services. A great

company also offers excellent products and services but also thrives to make the

world a better place”. From the philosophy of “doing good to look good”, to the

conviction of “doing well and doing good”.

Eighth, it is clear today that CSR’s success requires the decisive cooperation of

the government and business in a strong symbiosis. This is particularly clear in

developing countries. As the World Summit on Sustainable Development

(Johannesburg 2000) recognized, partnership between business, government and

civil society is the key to the progress we need on sustainable development.

Ninth, every time sectoral projects on CSR are materializing like in the mining

industry, the energy industry or the apparel industry, for example, the Multi-fibre

Arrangement Forum, or like the Equator Principles where a group of large

financial institution decided to impose conditions particularly environmental

conditions to their clients’ projects.

Ten. Up to now CSR has been something voluntary (voluntary to adopt and

voluntary to comply with). Today there is a big debate where CSR should remain

voluntary or should become compulsory. Many believe for example that the

limitation off the CO2 in the atmosphere emissions will not stop voluntary unless

it becomes a legal duty.

All of these trends mean that businesses need to manage their environmental and

social impacts much better: corporate responsibility has to cease being a bolt-on to

business operations; and instead be built-in to business purpose and strategy. This

involves a clear link to business values and culture; strong leadership form the top; and

the active engagement of stakeholders.

Potential benefits of implementing a CSR approach

Key potential benefits for firms implementing CSR include: Better anticipation

and management of an ever-expanding spectrum of risk. Effectively managing social,

environmental, legal, economic and other risks in an increasingly complex market

environment, with greater oversight and stakeholder scrutiny of corporate activities, can

improve the security of supply and overall market stability. Considering the interests of

parties concerned about a firm's impact is one way of anticipating and managing risk.

Improved reputation management. Organizations that perform well with regard to

CSR can build reputation, while those that perform poorly can damage brand and

company value when exposed. This is particularly important for organizations with high-

value retail brands, which are often the focus of media, activist and consumer pressure.

Reputation, or brand equity, is founded on values such as trust, credibility, reliability,

quality and consistency. Even for companies that do not have direct retail exposure

through brands, their reputation as a supply chain partner -- both good and bad -- for

addressing CSR issues can make the difference between a business opportunity positively

realized and an uphill climb to respectability.

Enhanced ability to recruit, develop and retain staff. This can be the direct result

of pride in the company's products and practices, or of introducing improved human

resources practices, such as “family-friendly” policies. It can also be the indirect result of

programs and activities that improve employee morale and loyalty. Employees become

champions of a company for which they are proud to work.

Improved competitiveness and market positioning. This can result from

organizational, process and product differentiation and innovation. Good CSR practices

can also lead to better access to new markets. For example, a firm may become certified

to environmental and social standards so it can become a supplier to particular retailers.

Enhanced operational efficiencies and cost savings. These flow in particular from

improved efficiencies identified through a systematic approach to management that

includes continuous improvement. For example, assessing the environmental and energy

aspects of an operation can reveal opportunities for turning waste streams into revenue

streams (wood chips into particle board, for example) and for system-wide reductions in

energy use. Corporate social responsibility (CSR) promotes a vision of business

accountability to a wide range of stakeholders, besides shareholders and investors. Key

areas of concern are environmental protection and the wellbeing of employees, the

community and civil society in general, both now and in the future. The concept of CSR

is underpinned by the idea that corporations can no longer act as isolated economic

entities operating in detachment from broader society. Traditional views about

competitiveness, survival and profitability are being swept away.

Some of the drivers pushing business towards CSR include:

1. The shrinking role of government

In the past, governments have relied on legislation and regulation to deliver social

and environmental objectives in the business sector. Shrinking government

resources, coupled with a distrust of regulations, has led to the exploration of

voluntary and non-regulatory initiatives instead.

2. Demands for greater disclosure

There is a growing demand for corporate disclosure from stakeholders, including

customers, suppliers, employees, communities, investors, and activist organizations.

3. Increased customer interest

There is evidence that the ethical conduct of companies exerts a growing

influence on the purchasing decisions of customers. In a recent survey by Environics

Internationals, more than one in five consumers reported having either rewarded or

punished companies based on their perceived social performance.

4. Growing investor pressure

Investors are changing the way they assess companies' performance, and are

making decisions based on criteria that include ethical concerns. The Social Investment

Forum reports that in the US in 1999, there was more than $2 trillion worth of assets

invested in portfolios that used screens linked to the environment and social

responsibility. A separate survey by Envirnics Internationals revealed that more than a

quarter of share-owning Americans took into account ethical considerations when buying

and selling stocks. (More on socially responsible investment can be found in the 'Banking

and investment' section of the site.)

5. Competitive labour markets

Employees are increasingly looking beyond pay checks and benefits, and seeking

out employers whose philosophies and operating practices match their own principles. In

order to hire and retain skilled employees, companies are being forced to improve

working conditions.

6. Supplier relations

As stakeholders are becoming increasingly interested in business affairs, many

companies are taking steps to ensure that their partners conduct themselves in a socially

responsible manner. Some are introducing codes of conduct for their suppliers, to ensure

that other companies' policies or practices do not tarnish their reputation.

Some of the positive outcomes that can arise when businesses adopt a policy of

social responsibility include:

Company benefits:

• Improved financial performance;

• Lower operating costs;

• Enhanced brand image and reputation;

• Increased sales and customer loyalty;

• Greater productivity and quality;

• More ability to attract and retain employees;

• Reduced regulatory oversight;

• Access to capital;

• Workforce diversity;

• Product safety and decreased liability.

2. Benefits to the community and the general public:

Charitable contributions;

Employee volunteer programmes;

Corporate involvement in community education, employment and homelessness

programmes;

Product safety and quality.

3. Environmental benefits:

Greater material recyclability;

Better product durability and functionality;

Greater use of renewable resources;

Integration of environmental management tools into business plans, including

life-cycle assessment and costing, environmental management standards, and

eco-labelling.

Nevertheless, many companies continue to overlook CSR in the supply chain - for

example by importing and retailing timber that has been illegally harvested. While

governments can impose embargos and penalties on offending companies, the

organizations themselves can make a commitment to sustainability by being more

discerning in their choice of suppliers.

The concept of corporate social responsibility is now firmly rooted on the global

business agenda. But in order to move from theory to concrete action, many obstacles

need to be overcome.

A key challenge facing business is the need for more reliable indicators of progress

in the field of CSR, along with the dissemination of CSR strategies. Transparency and

dialogue can help to make a business appear more trustworthy, and push up the standards

of other organizations at the same time.

The Global Reporting Initiatives is an international, multi-stakeholder effort to

create a common framework for voluntary reporting of the economic, environmental, and

social impact of organization-level activity. Its mission is to improve the comparability

and credibility of sustainability reporting worldwide.

There is increasing recognition of the importance of public-private partnerships in

CSR. Private enterprise is beginning to reach out to other members of civil society such

as non-governmental organizations, the United Nations, and national and regional

governments.

An example of such a partnership is the 'Global compact'. Launched in 1999 by the

United Nations, the Global Compact is a coalition of large businesses, trade unions and

environmental and human rights groups, brought together to share a dialogue on

corporate social responsibility.The 'Working with NGOs' section offers some insights

into the way businesses and lobby groups are working together to mutual benefit.

Management training plays an important role in implementation of CSR strategies, and

there is a growing number of conferences and courses available on the subject.

Organizations that provide such training include Global Responsibility, Business for

Social Responsibility and the Corporate Social Responsibility Forum. The idea of Indian

companies going beyond business imperatives to do something for society has undergone

remarkable changes over the years. Time was when companies merely dispensed cash by

way of charity to organizations or NGOs engaged in social work. Others promoted

activities that were mutually beneficial, to villagers living around a company plant or

town as well as to their own employees.   For instance, villagers were encouraged to

produce more vegetables or keep cattle for milk, with the company providing the start-up

money, the knowledge and the marketing infrastructure that ensured the extra produce

got to town.  The villagers were encouraged to take the risk and try their hand at new

farming activities because of the assurance of a dependable market and a steady

income. That changed over time to “community outreach”: reaching out to the

communities around company plants or offices, and providing amenities that were

lacking.  Companies supplemented facilities in schools or hospitals, helped women earn

extra income through sponsorship of, say, sewing machines or community centers which,

apart from generating income, promoted adult literacy and family welfare activities. 

With the growth of environment consciousness in the 1960s, companies felt the need to

redeem themselves for some of the damage done. They got involved in forestation, water

conservation and similar projects.  The concept of corporate social responsibility (CSR)

thus evolved — from philanthropy to a more elaborate concept that encompassed the

environment, employee relations, corporate governance and engaging with the

community.  The current understanding of CSR also attempts to deploy a company’s core

competencies to help address society’s problems.  Examples of this approach abound, and

one standout example is TCS, which has used its expertise in information technology to

help communities in different parts of India help themselves. TCS has developed a

database for Child Line, which supports children in distress in 54 centres in India, all

using volunteers from among its employees; it has also designed and implemented a

‘computer-based functional literacy’ project, a unique idea that enables adults to learn to

read — using low-end computers and a breakthrough software solution — within 30 to

40 hours, over two-three months.   Similarly, NIIT has used its IT expertise for its ‘hole

in the wall’ experiment, where children from slums learn to use computers with a touch

screen. Cut from the same cloth is ITC’s much-celebrated e-choupals, which help farmers

check prices in Indian and global markets before going to the marketplace with their

produce. 

  An important aspect of CSR today is the encouragement given to employees to

get involved in tackling social issues. Mother Teresa used to tell admirers eager to offer

her money: “I don’t want your money; I want your time.” She ended up getting both. 

CSR is no longer a fringe activity that companies engage in to look good.  Effective CSR

today is that which relates directly to the giver’s core competencies and offers real value,

not just philanthropy. It is no longer considered good for business, but simply good

business.  Because when you give back to the society you operate in, you become truly

embedded in that society, rather than being perceived as seeking profits alone

CONCLUSION

At present the Banking Sector performing their banking services more effectively

in comparison with the past and also started working towards social banking that is

Corporate Social Responsibility. Maximum number of banks whether related to private

sector or public sector highly performing CSR activities as per their priority but if we

look towards the CSR reporting then we can see that most of the banks are still not

disclosing their amount for such initiatives in their websites. After the involvement of

RBI the CSR becomes the important part of Banking Sector but still more regulations and

new policies are required to implement the concept of CSR in Indian Banking

Sector .RBI should made some criteria to distinguish between the banks conducting CSR

practices and those not conducting ,on the bases of their involvement in social banking

and some percentage must be set for spending on CSR activities by all the established

Banks and a proper monitoring is required by a committee on the working of Banks so

that the Banks work for their profit along with contributing towards the society because

Corporate social responsibility is just not the charity but a practical implementation of

ethical ideas towards the society. Banking sector in India is showing interest in

integrating sustainability into their business models but its CSR reporting practices are far

from satisfaction. There are only a few banks which report their activities on triple

bottom line principles. As a matter of fact, the standards for rating CSR practices are less

uniform in comparison to that for financial rating. This leads to problem in comparison of

corporate houses and determining the CSR rating. The study found out that among the

reporting banks also, some banks are making false gestures in respect of their efforts for

socioenvironmental concerns. Most of the Banks use CSR practices as a marketing tool

and many are only making token efforts towards CSR in tangential ways such as

donations to charitable trusts, NGOs, sponsorship of events, etc. Very few banks have a

clearly defined CSR philosophy. Mostly banks implement CSR in an ad-hoc manner,

unconnected with their business process and don’t state how much they spend on CSR

activities. Further voluntary actions are required to be taken by the financial bodies to

ensure the socio-environmental feasibility of projects to be financed. Indian banking

sector must also portray their socially responsible behavior.

BIBLIOGRAPHY

Books

S. K. Chaudhury, S. K. Das and P. K. Sahoo, “Practices of corporate social responsibility

(CSR) in banking sector in India

Website

Karmayog Report.(2009).

Retrived from http://www.karmayog.org/csr2009

www.smeworld.org/story/special-reports/corporate-social-rep-csr-activity-history-

india.php http://www.moneycontrol.com/news/business/rbi-revises-bank-kyc-guidelines-

advises-new-setnorms_908856.html