Half of banks’ CSR spending went to disaster management

Of their total corporate social responsibility (CSR) expenditure, banks spent 45 percent on disaster management violating rules in the first half of 2024, with bankers saying it mainly went to various funds maintained by the Prime Minister's Office before the political changeover on August 5.

Data released by the Bangladesh Bank (BB) yesterday showed that banks spent Tk 309 crore in the January-July period of 2024 for CSR initiatives, with Tk 138 crore going towards disaster management.

Donations under the sector included the distribution of blankets to the poor in cold regions, the BB report said. Relief and distribution of food items among affected families after the floods in late August also contributed.

However, as per the CSR policy framed by the central bank, a lender is supposed to provide 20 percent of their total CSR allocation to disaster management, 30 percent to the education sector, 30 percent to the health sector and 20 percent to the environment and climate sector.

However, in the first half of this year, banks spent Tk 71.98 crore, or 23.28 percent of total CSR expenditure, on the health sector.

The donations mainly went towards providing medical assistance to poor and disabled patients at the individual level and for the treatment of people suffering from various incurable and complex diseases.

In addition, grants were provided for construction and operational expenses of hospitals, clinics, diagnostic centres and purchase of medical equipment.

Education received the third-most at Tk 63.63 crore, accounting for 20.58 percent of total CSR spending, the report said. Reviewing expenditure in this sector, it was seen that most of it went towards providing scholarships to students.

Providing various educational materials and developing infrastructure in the education sector as well as donations made to the prime minister's education assistance trust also contributed to expenses in this sector.

Additionally, Tk 9.66 crore was spent in the sports and culture sub-sector and Tk 7.35 crore was spent on environment and climate change mitigation and adaptation, the lowest.

Under the latter, grants were provided for research and projects related to climate change mitigation, including tree plantation.

Compared to CSR expenditure in the last six months of 2023, it fell by 12.42 percent, the BB report said. Banks spent Tk 353.07 crore on CSR initiatives in the July-December period of 2023.

CSR expenditure on environment and climate change mitigation-adaptation declined by about 50 percent compared to the six months prior. CSR spending also fell in the education and health sectors.

Analysing BB documents, it is noticeable that BASIC Bank, ICB Islamic Bank, National Bank, and Padma Bank have not given any money towards disaster management.

AB Bank provided Tk 1.6 crore, EXIM Bank Tk 3.77 crore, First Security Islami Bank PLC Tk 6.98 crore, IFIC Bank PLC Tk 13 lakh, Global Islami Bank PLC Tk 66 lakh, Social Islami Bank Limited Tk 7.93 crore and Union Bank PLC Tk 4.4 lakh, it showed.

Bankers claimed that they had to commit money to various funds run by the office of recently deposed prime minister Sheikh Hasina through the Bangladesh Association of Banks (BAB).

Abdul Hai Sarker, chairman of the BAB, said most CSR funds were sent to funds maintained by the prime minister's office in the name of different programmes, including for housing and flood relief.

"We had no control over it. There was no way to say that we wouldn't give money," he said.

Sarker, also chairman of Dhaka Bank, said everything will happen according to rules and regulations now that the regime has changed.

Mohammad Ali, managing director of Pubali Bank, said they have to spend 2.5 percent of their net profit on socially impactful initiatives.

"Our focus on health, education and climate change reduces when we have to spend more on disaster management," he explained.