Banks’ CSR expenditure increased by 15.84 per cent to Tk 326.22 crore in the first half of this year from Tk 281.59 crore during the corresponding period a year ago.
But 26 banks failed to spend 30 per cent of their total expenditure in educational sector defying the central bank’s directive.
Six banks failed to spend any fund in their corporate social responsibility programmes’ fund in the January-June period of this year, according to a recent Bangladesh Bank report.
The six banks are: Rupali Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, Bangladesh Development Bank, ICB Islamic Bank and Woori Bank.
Besides, eight more banks spent an insignificant amount of CSR fund in the first six months of this year. The banks are: Janata Bank, BASIC Bank, Bangladesh Commerce Bank, Meghna Bank, Bank Alfalah, Commercial Bank of Ceylon, Habib Bank and National Bank of Pakistan.
The eight banks collectively spent only Tk 1.16 crore in their CSR programmes.
The banks and NBFIs will have to use 30 per cent of total CSR expenditure in the education sector for the underprivileged population, according to the central bank circular.
The expenditure should be for scholarships and stipends for students from low-income family in reputed academic and vocational training institutions.
Twenty-six banks failed to spend 30 per cent of total expenditure in the educational sector in the first of this year.
Banks’ CSR expenditure in the educational sector, however, increased to Tk 126.75 crore in the January-June period of this year from Tk 84 crore in the same period of 2016.
The banks and NBFIs are supposed to allocate at least 20 per cent of their CSR fund for preventive and curative healthcare support assistance for underprivileged population segments.
The banks and NBFIs are told to allocate their CSR fund for hygiene initiatives like provision of safe drinking water, hygienic toilet facilities for poor households and for floating population in the urban areas.
The remainder of direct budgetary CSR expenditure allocations are supposed to be used in such other areas as emergency disaster relief, promoting adoption of environmentally sustainable output practices and lifestyle, promoting artistic, cultural, literary, sports and recreational facilities for the underprivileged people.
BB officials are not totally convinced that the entire CSR fund went to the purposes of serving underprivileged section of the society as many of the banks disbursed the fund for influential sections.
A BB official said that banks were also under pressure to disburse CSR fund to organisations close to influential sections of the society including ruling party leaders to ‘please’ the government.
Besides, a number of banks also disbursed CSR fund to the law enforcement agencies, either by donating cars or constructing buildings, they said.
Although the central bank has a policy on the CSR, it did not monitor the banks’ activities in this regard and in some cases it overlooks the banks’ CSR activities because of the connection of influential people, he said.
The BB introduced the guidelines in 2014 after banks’ CSR fund surged to Tk 447.15 crore in 2013 from Tk 304.67 crore in 2012 and Tk 218.83 crore in 2011.
The banks spend Tk 496.75 crore in their CSR programmes in 2016 and Tk 527.81 crore in 2015.
The BB official said that the central bank had not conducted detailed inspections of the banks’ CSR fund disbursement process in recent period.
He said that the banks might violate the central bank’s rules and regulations in disbursing the CSR fund as they frequently distributed the fund on political consideration.
The central bank earlier unearthed that some state-owned and private commercial banks had committed financial crimes in disbursing their CSR fund, the official said.
The government suspended the CSR programmes of four state-owned banks for some months in 2014, he said.
The BB earlier issued the CSR guidelines saying that the board of directors of the banks and non-bank financial institutions must scrupulously avoid any allocation in favour of any entity directly or indirectly connected with their directors, senior management members or with trustees of their CSR foundations.
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