Csr in Inidan Banking Sector

Topics: Banks of India, Corporate social responsibility, Government-owned banks in India Pages: 8 (2214 words) Published: October 10, 2011
Corporate Social Responsibility in Indian Banking Sector

A Case Study on

Corporate Social Responsibility in Indian Banking Sector


I would like to thank Mr. S.C Bihari, Professor Banking Management for giving me the opportunity to work on the case and for increasing the knowledge base in the area of banking sector. I am also thankful to sir for his guidance and constant support in enabling us to be enthusiastic in getting into depth of the topic and helping through our learning process.

Table Of contents
1. Introduction6
2. CSR practices in banking sector6
3. CSR practices in Indian Banking sector7
4.1 RBI guidelines on CSR8
4.2 Initiatives by Indian Banks towards CSR9
4.3 CSR Reporting Practices10
4. CSR constraints11
5. Recommendations11
6. Conclusion12

In recent years Corporate Social Responsibility (CSR) has witnessed a tremendous increase in awareness and control in global arena. CSR emerged in 1960 in an attempt to link business with society. CSR recognizes an organization’s commitment to operate in a socially responsible manner. It is a concept where financial institutions apart from their profitability and growth show interest in society and environment welfare by taking the responsibility of impact of their activities on stakeholders, employees, shareholders, customers, suppliers, and civil society represented by NGOs. With the increasing need for economic development across the globe, the demand for corporations to take central role in the efforts to eliminate poverty, achieve equitable and accountable systems of governance and ensure environmental security. The concerns of need to make business a part of society, to maximize profits of organization that as well lead to human and environmental well being and to minimize the harmful effects of irresponsible business were addressed by “Corporate Social Responsibility”.

Corporate responsibility, responsible business, corporate citizenship, sustainable responsible business (SRB), or corporate social performances are the synonyms of Corporate Social Responsibility, which is a form of corporate self regulation integrated into business model. There are three key points for an effective CSR policy: Commitment, Clarity and Congruence with corporate values. Corporate Social Responsibility is a broad term and each organization has its own definition towards its CSR. A clear clarity of what CSR defines for each organization is a must to have a commitment towards their activities. Congruence is making sure that the company’s attitude towards its CSR is consistent with the way in which it runs the whole business, i.e. its values and culture.

Banking sector is under immense pressure from its stakeholders, media, investors, NGOs and its customers to carryout business in a responsible and ethical manner through out the globe. Several initiatives have been undertaken to promote CSR world wide. Some countries also levied heavy penalties to banks for violating socio-economic principles. Further socially irresponsible lending banks have to face a lot of criticism for their actions. The exponential growth in information technology has caused great demand for adoption of CSR activities in banking sector. State regulatory bodies, NGOs, media, customers have significantly addressed social responsibility issues in banking sector. International organization such as World Bank also exerts pressures on banks to analyze social and environmental risk involved in projects to be financed. In addition the reputation and resultant profitability of an organization are greatly...
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