Dr. Atiur Rahman
Corporate social responsibility, is no more a supplementary or optional activity for any corporate, so is for banks. CSR is really about companies operating in a manner that is sustainable, cognizant of their responsibility to the wider community in which they are located. CSR is more than simply acts of philanthropy or allocating a proportion of its earnings to worthy causes; it is strategic in nature, and is about how a business actually functions. CSR typically boils down to a set of policies within a company that seek to ensure that its actions and activities are beneficial, not only to itself and its shareholders, but also to other stakeholders, typically comprising: customers, employees, the wider community and the environment.The globe is now seriously concerned about the corporate sustainability. Corporate sustainability calls for the sustainability of the business itself by ensuring the sustainability of society, environment and the economy. Businesses that integrate sustainability into their operations are finding themselves in positions of long-term strength: Opportunities for risk management, new markets, and product and service innovation open up. Consumer confidence and loyalty are strengthened. Corporate sustainability, therefore, entails both respect for universal principles in these areas, as well as proactive support of a sustainability agenda. Mirroring the growth in corporate sustainability are the responsible investment and sustainable finance movements, whereby increasing numbers of long-term institutional investors are adopting principles of sustainability – with the means for unleashing the trillions of dollars in investment that will be required for innovation, infrastructure and service delivery to meet human needs.
Corporate sustainability supposes specialized sustainable initiatives by the sectors of the economy in line with the nature of them. This has brought out the concept of Sustainable Banking. In this case, as a regulator Bangladesh Bank undertook the actions proactively to implement the sustainable banking components which started with CSR. It’s been almost 8 years of mainstreaming CSR initiatives in core banking operation. CSR is no more a regulator instructed task for the banks. Banks are now moving ahead for broadening and deepening of CSR activities. The illustrations of banks’ CSR activities depicted in the BB annual review report on CSR clearly evidence the impact of these activities on the country’s sustainable development.
Thus, policy makers have their own responsibility to expand and motivate sustainable CSR practices of banks which is truly beneficial to the society. This calls for the necessity of incentivizing the banks. As CSR is expenditure or profit forgoing lending activity for banks, tax incentive is one of the major policy instruments for enhancing CSR. NBR has already done that. But, now, it’s time to explore the potential hidden. The ways are needed to be found for motivating banks without impeding the revenue of the government. There is the crying need of rigorous research and regulatory coordination for finding the policy gap and improvising accordingly. Today, Mr. Chowdhury will present the view of Bangladesh Bank in this respect. But, this is just the beginning. I want to see the extensive and frequent interactions between the officials of Bangladesh Bank and NBR concerned in CSR in future.
(Address made at the roundtable on Policy Support to CSR in the context of Tax Exemption for the Banking Sector, organised by MRDI in Dhaka on Saturday)
