INTRODICTION

CSR aims to ensure that companies conduct their business in a way that is ethical. This means
taking account of their social, economic and environmental impact and consideration of human
rights.

Corporate social responsibility is a gesture of showing the company’s concern & commitment
towards society’s sustainability & development.

CSR is the ethical behavior of a company towards society.

It can involve a range of activities such as:

 Working in partnership with local communities

 Socially responsible investment (SRI)
 Developing relationships with employees and customers
 Environmental protection and sustainability

Some businesses have as their main purpose the fulfillment of social or environmental goals, as
opposed to a business that tries to achieve its financial goals while minimizing any negative
impact on society or the environment. These businesses are called Social Enterprises.

It can be understood that CSR is now an integral part of functioning of an organisation. The
performance of an organization should be judged beyond the financial parameters. The
authorities need not only focus on the financial performance but to examine into the CSR
performance of the organization. Keeping in view the importance of banking sector in India, this
study is focused on the corporate social responsibility activities carried out by Indian commercial
banks.

DEFINATIONS OF CSR

 Corporate Social Responsibility is the continuing commitment by business to behave

ethically and contribute to economic development while improving the quality of life of
the workforce and their families as well as of the local community and society at large”

Lord Holme and Richard Watts

 Corporate social responsibility encompasses not only what companies do with their
profits, but also how they make them. It goes beyond philanthropy and compliance and
addresses how companies manage their economic, social, and environmental impacts, as
well as their relationships in all key spheres of influence: the workplace, the marketplace,
the supply chain, the community, and the public policy realm.

Harvard University
 essentially, CSR careers are all about:

 Strategy
 Management
 Publicity.
If you work on the strategy side of things, you might be conducting research into environmental
issues and analysing your company’s current practices to combat them. You will then be
devising ways of improving current processes, getting actively involved in corporate policy-
making and then deciding how best to integrate these strategic visions into current business
activities with minimal interruption.

Additionally, you might play an integral role in deciding which charities to support and which
community development schemes and volunteering programmes your company’s employees will
get involved with.

Strategy is one thing, but the initiatives that are devised by the CSR team also need to be
implemented and coordinated effectively. If you focus your efforts on this side of proceedings,
you might be arranging environmental audits of your existing suppliers; you could be going out
into the community and actively setting up volunteering programmes; or you may be
commissioning environmental consultants to carry out assessments of your company’s site.

Moreover, part of your job would involve liaising with potential suppliers, assessing their
suitability and selecting the ones which fit in with your organisation’s values and ethical
standards. For instance, you might only be dealing with Fairtrade companies.

If you choose to get involved with the publicity side of CSR, you will be responsible for making
sure the whole world knows about your company’s efforts. You would be using your excellent
PR and marketing skills to make sure that all initiatives are widely-publicised and covered in the
press. You will also be integral to deciding which community events to sponsor and which
charities your organisation should be working in partnership with.

Your career in CSR will entirely depend on your specific employer. For instance, in some major
companies you might solely be working on publicity. However, in other organizations, you
might be getting involved with strategy, implementation and publicity.

There is no standard entry-route into this line of work. However, the majority of organisations
will require you to have a decent degree, commercial awareness and a strong passion for the
environment, community work and sustainability.
Dimensions of CSR
Economic Responsibility:
A corporation has to meet its economic responsibilities in terms of reasonable return to investors,

fair compensation to employees, goods at fair prices to customers, etc. Thus, meeting economic

responsibility is the first-layer of responsibility and also the basis for the subsequent

responsibilities. The fact remains that meeting economic responsibility is must for all
corporations to survive in the time.

ii. Legal Responsibility:

The legal responsibility of business corporations demands that businesses abide by the law of

land and play by the rule of the game. Laws are the codification of do’s and don’ts do’s in the
society.

Abiding by laws is the prerequisite for any corporation to be socially responsible. Corporate

history is replete with instances where violation of laws disallowed corporations to run any

longer. Enron, Union Carbide, Global Trust Bank, etc. are some of such illustrative corporate
cases of social rejection and boycott.

Ethical Responsibility:
These responsibilities refer to obligations which are right, just, and fair to be met by
corporations. Just abiding by law, procedure, and rule and regulations does not make business

conduct always as ethical or good. The conduct of corporations that go beyond law and
contribute to social well being is called ethical.

Hence, corporations have an ethical responsibility to do, even going beyond law and rule and

regulations, what proves good for the society. In other words, ethical responsibilities consist of

what is generally expected by society from corporations over and above economic and legal
expectations.
Philanthropic Responsibility:
The Greek word ‘philanthropy’ means literally ‘the love of the fellow human.’ The use of this

idea in business context incorporates activities that are, of course, within the corporation’s

discretion to improve the quality of life of employees, local communities, and ultimately society
at large.

Making donations to charitable institutions, building of recreational facilities for employees and

their families, support for educational institutions, supporting art and support activities, etc. are

the examples of philanthropic responsibilities discharged by the corporations. It is important to

note that the philanthropic activities are desires of corporations, not expected by the society.

These are depicted in the following diagram:

Shareholders:
It is the primary responsibility of every business to see that the owners or shareholders get a fair

rate of dividend or fair return on capital invested. This is a legitimate expectation of owners from

business. Naturally the expectations have to be reasonable and consistent with the risks

associated with the investment. Owners also expect economic and political security of the capital

invested. If such security is not ensured, the inevitable consequence is withdrawal of capital and
search for alternative channels other than business.
Employees:
ADVERTISEMENTS:

As regards responsibility towards employees, the major issues governing the employer-employee

relationship pertain to wages and salaries, superior- subordinate relations and employee welfare.

It is the responsibility of management to provide for fair wages to workers based on the principal
of adequacy, equity and human dignity.

Maintaining a harmonious relationship between superiors and subordinates and providing for

welfare amenities for employees are also the responsibilities of management. There are specific

laws in India governing factory employment tinder which provision of satisfactory working

conditions for safety, health and hygiene, medical facilities, canteen, leave and retirement
benefits are obligations on the part of employer.

There are other laws as well providing for the security of workers against the contingencies of
sickness, maternity, employment injury and death, provident fund and pension for employees.

However, employee welfare cannot be viewed within the narrow limits of legal requirement.

Employee welfare is best secured if the management accepts the obligation to secure and

maintain a contented work force, and the employees have the opportunity of developing their
potential abilities through training and education.

Consumer interests are generally expected to be taken care of in a competitive market through

forces of demand and supply. However, perfect competition does not actually prevail in all

product markets. Consumers are also victims of unfair trade practices and unethical conduct of

business. Consumer protection has, thus, been sought through legislation, and non-government
organizations (NGOs) have enlarged their activities for upholding consumer interests.
These compulsions are avoidable if management assumes the responsibility of satisfying

consumer needs and desists from hoarding, profiteering, creating artificial scarcity, as also false,

misleading and exaggerated advertisements. Besides, it would be in the long-run interest of

business if goods of appropriate standard and quality are available to consumers in adequate
quantities and at reasonable prices.

Government:

Social responsibility of business towards government requires that:

(i) the business will conduct its affairs as a law-abiding unit, and pay all taxes and other dues
honestly,

(ii) management will desist from corrupting public servants or the democratic process for selfish
ends, and no attempt will be made to secure political support by money or patronage.

Community:
Arising out of their social responsibility towards the community and public at large, businessmen

are expected to maintain a balance between the needs of business and the requirements of

society. In general, business should be so managed as to make the public good become the

private good of the enterprise rather than the old doctrine that “what is good for the business is
good for the society”.

The social responsibility of business firms should be reflected in their policies with respect to

environmental protection, pollution control, conservation of natural resources, rural

development, setting up industrial units in the backward regions, employment of the socially

handicapped and weaker sections of the community, and providing relief to victims of natural
calamities.
types of CSR

 Environmental CSR: focuses on eco-issues such as climate change.

 Community based CSR: businesses work with other organizations to improve the quality
of life of the people in the local community.
 HR based CSR: projects that improve the wellbeing of the staff.
 Philanthropy: businesses donate money to a good cause, usually through a charity
partner.

Advantages of Corporate Social Responsibility

5 reasons why should you get involved in CSR

In today’s digital, fast speed world, each business, small or big, needs to have a CSR program in
place. If CSR is not yet part of your daily business practice, you must act fast. Or else you’ll
loose the trust of the people who are important to your business.

Believe it or not but the expectations of your staff, customers and the wider community
have changed. You are no longer in control. They are.

So why CSR?

1. Satisfied employees.

Employees want to feel proud of the organization they work for. An employee with a positive
attitude towards the company, is less likely to look for a job elsewhere. It is also likely that you
will receive more job applications because people want to work for you.

More choice means a better workforce. Because of the high positive impact of CSR on employee
wellbeing and motivation, the role of HR in managing CSR projects is significant.

2. Satisfied customers

Research shows that a strong record of CSR improves customers’ attitude towards the company.
If a customer likes the company, he or she will buy more products or services and will be less
willing to change to another brand.

Relevant research:

 IBM study ‘Attaining Sustainable Growth through Corporate Social Responsibility’: The
majority of business executives believes that CSR activities are giving their firms
competitive advantage, primarily due to favorable responses from consumers.
  Better Business Journey, UK Small Business Consortium: “88% of consumers said they
were more likely to buy from a company that supports and engages in activities to improve
society.”

3. Positive PR

CSR provides the opportunity to share positive stories online and through traditional media.
Companies no longer have to waste money on expensive advertising campaigns. Instead they
generate free publicity and benefit from worth of mouth marketing.

4. Costs reductions

Yes, you read this correctly. A CSR program doesn’t have to cost money. On the contrary. If
conducted properly a company can reduce costs through CSR.

Companies reduce costs by:

 More efficient staff hire and retention

 Implementing energy savings programs
 Managing potential risks and liabilities more effectively
 Less investment in traditional advertising

5. More business opportunities

A CSR program requires an open, outside oriented approach. The business must be in a constant
dialogue with customers, suppliers and other parties that affect the organization. Because of
continuous interaction with other parties, your business will be the first to know about new
business opportunities.

6. Long term future for your business

CSR is not something for the short term. It’s all about achieving long term results and business
continuity.

KEY ISSUES IN CSR

• Labour rights:

– child labour

– forced labour

– right to organise
 – safety and health

– Environmental conditions

– water & air emissions

– climate change

– Human rights

– cooperation with paramilitary forces

– complicity in extra-judicial killings

– Poverty Alleviation

– job creation

– public revenues

– skills and technology

MANAGEMANT STRUCTURE OF CSR

Corporate Social Responsibility also called Corporate Conscience or Responsible Business is a

form of corporate self-regulation integrated into a business model. CSR is defined as the
voluntary activities undertaken by a company to operate in an economic, social and
environmentally sustainable manner. CSR policy functions as a self-regulatory mechanism
whereby a business monitors and ensures its active compliance with the spirit of law, ethical
standards and national or international norms.

The concept of Corporate Social Responsibility is not a new one but its focal point changes with
the changing requirements of business and varying social needs. The concept of CSR was first
mentioned in 1953 in the publication of “Social responsibilities of businessman” by William
J.Bowen. However the term CSR became only popular in the 1990s, When the German Beta
pharma generic pharmaceutical company decided to implement CSR. CSR is a concept whereby
companies decide voluntarily to contribute to a better society and a cleaner environment. It is
represented by the contributions undertaken by companies to society through its business
activities and its social investment. CSR has been making an increasingly prominent impact in
the Indian social system by supplementing development projects. But it is not a novel concept in
India as its historical roots goes till the Vedic age.

Today Banking Sector growing larger and powerful than before. Various Non-government
organizations put pressure on Banks to act responsibly towards their stakeholders. Thus pressure
has given rise to the concept named Corporate Social Responsibility. CSR defined as “the
economic, legal, ethical, and philanthropic expectations placed on organizations by society at a
given point in time.” (Carrol and Buchholtz, 2000:35). Exactly what responsibility companies
have towards society has been discussed for some decades now.

REVIEW OF LITRATURE

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. In 1970s CSR was
identified as the conformance to industry principles. The basic idea was to widen the margin of
CSR implications from pure economical boundaries. In this regards, corporate houses ensured
the potential use of business resources with no compromise to business ethics. The concept lead
to profit maximization without deception or fraud to any party i.e., lying within the rules of the
game. In this period, a socially responsible firm was identified as one which balances
multiplicity of interests instead of striving just for profit making for its stockholders. Davis
(1973) described CSR as firm’s consideration and response to different issues which may rest
beyond the narrower territories of economic, technical and legal requirements of the firm. In this
phase researchers pointed out that CSR encompasses the economic, legal, ethical and
discretionary (philanthropic) expectations that society has at a given point of time. In 80s and 90s
a need was felt to give recognition to some new concepts like stakeholder theory, Corporate
Governance, and Corporate Social Performance, Corporate Citizenship, Corporate Social
Innovation and Communication of CSR practices through CSR reporting. Lee (1997) explained
CSR as the company’s commitment to operate in an economically and environmentally
sustainable manner, while acknowledging the interests of a variety of stakeholders and
maximizing economic, social and environmental value. Holmes and Watts (1999) defined CSR
as the continuing commitment by business to behave ethically and contribute to economic
development while improving the quality of life of the workforce and their families as well as of
the local community and society at large. Some researchers argued that corporations make more
long term profits by operating with a CSR perspective, while others argue that CSR distracts
from the economic role of businesses. However, Matten & Crane (2005) emphasized that the
firms will experience divergent degrees of internal, external and lateral pressures to engage in
CSR, as firms are embedded in different national business systems. In the 21st century a general
attempt was made to establish the linkage among economic, legal, social and ethical standards so
as to bring sustainable development. World Business Council for Sustainable Development
(2001) explained CSR as the commitment of business to contribute towards sustainable
economic development, working with employees, their families and the local communities.
Uhlaner et al (2004) discussed the economic, legal, ethical, philanthropic aspects in regards to
CSR. Juholin (2004) made a distinction between CSR as simple legal compliance and CSR as
conducting business with a high regard for morality. According to Friedman (2006) "There is
one and only one social responsibility of business- to use its resources and engage in activities
designed to increase its profits so long as it stays within the rules of the game, which is to say,
engages in open and free competition without deception or fraud". In contrast to Friedman’s
statement, Robbins and Coulter (2007) explained that the management‘s social responsibility
goes beyond making profit to include protecting and improving social‘s welfare of its
stakeholders and the environment in which the firm carries out its operations. They also have the
responsibility to the society that allow their formation through various laws and regulations and
support them through purchasing their products and services. (Carroll, 2008). Zain (2008)
extending the Carroll’s statement said that ethical standards play an important role in a firm's
success in the long-run. The social responsibility standards and moral activities by a firm can
create a positive rapport between the firm and all its stakeholders. Sharma (2011) made an
attempt to analyze CSR practices and CSR reporting in India with special reference to banking
sector and concluded that banking sector in India is showing interest in integrating sustainability
into their business models but its CSR reporting practices are far from satisfaction. Recently,
CSR has gained much attention in the corporate world. As explained by Hertz (2012), earlier it
was a form of capitalism that put much more emphasis on what we owned, on whether we had a
Gucci handbag for example, than on things like the quality of our environment, the quality of the
air we breathe, the kind of healthcare we have, what makes us content and happy. She called it
Gucci capitalism and predicted that the gradual demise of Gucci capitalism will be followed by a
new era of responsible capitalism called Co-opt capitalism. The idea of Co-opt capitalism is that
the community matters over individual and co-operation matters over competition. In short
during this phase the concept of CSR was showered with some divergent thoughts covering
economic, legal, ethical, philanthropic and social aspects of business houses.

Table 1: Evolution of CSR Initiatives.

Phase 1 Phase 2 Phase 3 Phase 4 1850-1914 1910 -1960 1950-1990 Since 1980/1990 Pure
philanthropy and charity during industrialization, Corporation is responsible to owners and
managers only CSR as social development during the independence struggle, Corporation is for
owners, managers and employees CSR under the "mixed economy paradigm", Corporation is
responsible to owners ,managers and other target environment CSR in a globalized world in a
confused state, Corporation is responsible to owners ,managers, other target environment and
public at large

CSR Practices in Indian 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),

  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.

Chart 1.1

However the core areas for reporting CSR activities are slightly different in both types of banks.
The analysis of three core activity areas as depicted by these banks reflected some prominent
fields for CSR activities. These areas could be shown by the following Charts. The X axis of
chart represents the fields and the Y axis of the chart represents the number of banks, claiming
these areas, out of the selected sample. Chart 1.1 reports the thrust areas of the public sector
banks. Indian public sector banks most actively participate for improvement of regional
imbalances through initiating various activities for promotion of rural development. Besides it,
they principally focus on the issues of gender equality through women's empowerment. The
major areas investigated for reporting CSR activities in private sector banks are indicated in
Chart 1.2.

Chart 1.2

The chief domains for reporting CSR activities in Indian private sector banks are to enhance the
level of education and employment. The other prominent areas for their concern include
community welfare, programmes for child welfare and protection of environment. As indicated
in Chart 1.2 CSR practices of the selected banks represents a wide spectrum of different
activities including rural development, community development and social welfare, family
initiatives, women's empowerment and environment protection. A significant part of the bank’s
annual earnings is used to support structures, events and individuals across diverse areas of child
healthcare and education, entertainment, environmental beautification, human capital
development and arts. The study of core areas as reported by the selected banks reveal that
primary concern for both type of bank is social welfare. However both have different approach to
promote the same. The general trend of selected public sector banks are mainly practices for
rural development and removal of gender inequality. On the other hand, the core operational
CSR activities in private sector banks are focused on education and employment for all and
mitigating the risk of environmental degradation through their green banking strategies

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 5star 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 programs as well as skill up gradation
courses to enable sustainable employment and income generation for economically weaker
sections.

OBJECTIVES

To get a broader overview of CSR

To identify the CSR activities served by Indian banks

Rationale of Study

There are lot of reasons and rationale behind the study. Now a day the business world is greatly
influenced by their Corporate Social Responsibilities (CSR). It is also a modern marketing
concept. Here it is very important to study about Corporate Social Responsibility (CSR) of
different company, bank, and financial institution. In this regard as a renowned and large private
online bank of Bangladesh, the study of Corporate Social Responsibility (CSR) of “THE
PREMIER BANK LTD’ is very important. The rationale behind this study is to gain knowledge
about Corporate Social Responsibilities of ‘THE PREMIER BANK LTD’