Vaishnavi Marwaha

[Assistant Professor, Institute of Management Studies, BJSR Jain College, Bikaner and

Research Scholar, Rajasthan Technical University, Kota (Raj.)]

Dr. Pankaj Jain

(Principal, BJS Rampuria Jain College, Bikaner)

Abstract

The concept of Corporate Social Responsibility is in existence since ancient times. Corporate Social Responsibility (CSR) is getting more attention in the banking sector. The main purpose of this paper is to investigate the opportunities and challenges of corporate social responsibility in the banking sector. It reviews the concept of social responsibility and how it is useful to sustain in the market. The paper aims clearly to make some recommendations for overcoming the challenges and also make corporate social responsibility more successful for banks. The main methods used in this study are semi-interviews, field observation, and documentation review.

Keywords

Corporate Social Responsibility, challenges, and opportunities, sustainable development, social responsibility, corporate citizenship

Introduction

Corporate social responsibility is a systematic business approach and ethical part of the organization. It is also referred to as corporate citizenship, sustainable development, corporate accountability, and corporate shared value. Corporate social responsibility is a self- regulated and continuous process. It is a concept where the bank decides to contribute to a better society.

The World Business Council for Sustainable Development defines Corporate Social Responsibility 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”.

• Corporate: means doing business for wealth creation.
• Social: means to take care of society or community.
• Responsibility: means accountability towards the welfare or development of the economy.

Banking sector now a day’s are expected to work ethically and fulfill the social obligation towards the stakeholders. Stakeholders means customers, employees, suppliers, government, and society. Corporate Social Responsibility holds the responsibility for corporate actions and creates a positive impact on the environment. Through Corporate Social Responsibility, banks can increase long term profit and maintain the relationship with stakeholders, while critics argue that Corporate Social Responsibility distracts business from economic consideration.

There are so many challenges like problems of selecting partners, lack of transparency, lack of awareness, balancing the urban and rural area, maintain relationship for long term creating an ethical culture.

Corporate Social Responsibility is a wide network now, as it is not limited to giving land or charity or some emotional activity. The Companies Act, 2013 has formulated the Companies Rules, 2014 which gives a legal obligation to the entire corporate sector including banking sector to fulfil their CSR.

Objective of Research

1. Understand the meaning of Corporate Social Responsibility.
2. Find out the opportunities through social responsibilities of banks.
3. Identify challenges for banking sectors.
4. Present status of Corporate Social Responsibility in Bikaner.

Limitation of research

There are a lot of public and private banks; but the current study is limited to State Bank Of India and HDFC bank, which covers the data from the period of 2017–2018.

Literature Review

The concept of Corporate Social Responsibility is not new in India, it was also found in Vedic times.

Robbins (2011) suggests that, Corporate Social Responsibility promotes the organization’s name in the market which results in higher revenue of the organization, enhances employee loyalty and increases the sale of the organization.

As per Sanjay Kanti Das (2012), in his study, presented that corporate social responsibility is important in the banking sector. In the financial sector, a visible trend is seen, of promoting environment friendly and socially responsible lending and investment practices. The Government of India and Reserve Bank of India are pursuing the matter related to Corporate Social Responsibility and have also drafted the guidelines for Corporate Social Responsibility practices time to time.

Masud Rana (2015) identified the opportunities and challenges of corporate social responsibility from both the public and private sector of banks. In older days, for the survival, banking sectors only focused on profit-making and customer satisfaction, but now if corporate wants to sustain in market for long term then the business should be operated ethically and some part of wealth should be given for the social development.

Shravya Saxena (2016) stated in her study that, there are some banks which do not fulfil the criteria of corporate Social Responsibility, which is bad for our economy and society. Corporate Social Responsibility is not about charity or donation it also aims to reduce poverty among the underprivileged segment of the society.

CSR in India

In 21st-century banking sectors faced many challenges. A strong perception has been developed in India that banks have to manage a social responsibility to maintain a relationship with society and for long term sustainability in the marketplace. There are lots of challenges in the banking sector:

• Lack of awareness of stakeholders.
• Economic pressure and recession.
• Lack of commitment and participation by top management.
• Need to build local capacities
• Lack of consensus implementation of CSR
• An issue of transparency.
• Low management structure
• Lack of clear guidelines about corporate social responsibility.
• Need of proper supervision on (CSR) corporate social responsibility.

Opportunities in the banking sector

Corporate Social Responsibilities are an opportunity to maintain a relationship with stakeholders. It also helps to increase the revenue and build an image in the marketplace. Banks would introduce the new opportunities in banking sector.

• Corporate Social Responsibility can improve the profits.
• Through Corporate Social Responsibility’s banks can effectively communicate with the targeted audience.
• Corporate Social Responsibility can help in improving the negative image of banks.
• Long term sustainability in the marketplace.
• CSR’s can help to retain the investors.
• Can help creating high performance level of employees.

Corporate Social Responsibility Framework

The Ministry of Corporate Affairs has notified Section 135 and Schedule VII of the Companies Act 2013 as well as the provisions of the Corporate Social Responsibility Policy Rules, 2014 to come into effect from April 1, 2014.

Private limited or public limited companies have a legal obligation to spend some amount of profit in social work. Companies should meet any one or more of the following criteria’s:

Every company needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility activities.

Research methodology

The methodology is the systematic and theoretical analysis of a particular area of study. It does not provide a solution but it is a branch of knowledge.

The information captured in this research paper was received from the AGM and the branch manager of SBI and HDFC banks. The study was conducted to identify the challenges and opportunities of social responsibilities in the banking sector.

HDFC Bank

HDFC (The Housing Development Finance Corporation) is a private bank. The bank introduced an AI-based chatbot Eva on all its digital platforms, which helps customers find information in quick time. HDFC bank drives the holistic growth of communities. It works on five distinct areas i.e rural development, promotion of education, skill development, healthcare and hygiene, and financial literacy. In rural development, alongwith various NGO’s, it has covered 2.98 lakh houses impacting 870 villages. HDFC has also been working on various initiatives of the government like MANREGA, Ministry of electronics and Information Technology.

HDFC believes that a nation truly develops when its community sustains in livelihood. HDFC started a new initiative named PARIVARTAN which means a step towards progress. Bank also started ZIIEI zero investment innovation for education initiatives to improve the quality of education in government schools. Every year, the Bikaner branch of HDFC bank, organizes blood donation camps in Colleges, and in 2018 they collected 32 units blood from a college, which was a great initiative towards the health sector. HDFC bank also provides education to the poor socio-economic society, they established a day boarding school in village Gharsisar, Bikaner. An event named ‘DAAN UTSAV 2018 GOONJ’ was also organized, in which the bank employee’s donated clothes and sanitary pads to needy people.

State bank of India

SBI (State Bank of India) is a nationalized bank. State Bank Group formed SBI foundation for all the CSR activities to bring smile to the socio-economically backward sections of the society.

SBI works with SBI foundation which aims on promoting growth, equality, responsive to the relevant needs of communities where it operates.

After the merger of SBBJ bank with SBI, they will now contribute two percent of the annual net profit on Corporate Social Responsibility. Earlier SBI bank was spending one percent of the profit on Corporate Social Responsibility activities.

In 2018, SBI contributed towards the construction of a residential school building in Patna, Bihar. SBI also provides support for the education and overall development of underprivileged children from Dabok village, Udaipur (Rajasthan). The provision of electrical appliances and equipments to a NGO was done by SBI in Chandigarh to improve its infrastructure and sanitation facilities were also provided to girls.

In Bikaner, SBI distributed T-shirts and caps in 2017 and spent Rs.62999/-. They donated Rs.71000/- to APNA GHAR ASHRAM RBO-1 in Bikaner.

The AGM of SBI (Bikaner branch) Mr. Harish Rajpal distributed gifts to all the employees on New Year, as a token of appreciation and also for the motivation of employees to work harder in future, as a result of which a tremendous hike was seen in the business

Recommendation

Below are some of the recommendations for improving the Corporate Social Responsibility:

1. Define your messaging: Don’t strike blindly at different goals. Come up with causes that resonate with your business culture, research the kind of support they need, then pick one and stick with it.
2. Involve your customers: Seek the assistance from your website visitors. Bring old but usable technology into your store so that it can be donated to students in underfunded schools. Potential rewards should be offered for all the participants.
3. Use social media: Solicit the ideas, experiences and concerns of the customers to get them invested in your projects. Multiple digital platforms to be used to reach people.
4. Partner with a third party: Form an alliance with any NGO as it will offer an opportunity to blend customers and networks.
5. Repurpose the CSR reports: Charts, stories and photos can be used in the annual reports and newsletters which will appeal to stakeholders and shareholders alike.
6. Seek publicity: Send out a press release about any contests, events or fundraising drives, and reach out to media outlets that present on green topics as they’ll be apt to give you positive coverage.

Conclusion

Corporate Social Responsibility is most important part of banking sector because it increases the revenue and also removes the negative image of the organization. It builds a long term relationship with society as well as improve the brand image of the banking sector. After the analysis, we can suggest that the public sector works more than the private sector in social welfare but there is more need for creation of awareness among Corporate Social Responsibility. At present the banking sectors are working more effectively as compared to past years.  After the involvement of RBI and Government of India, banking sectors are more aware of the policies and activities related to Corporate Social Responsibility.

Bibliography

Books

Business world RNI No.39847/81

Website

http://mallenbaker.net/article/clear-reflection/definitions-of-corporate-social-responsibility-what-is-csr

file:///C:/Users/hp%20user/Downloads/7894-28790-1-PB.pdf

http://shodh.inflibnet.ac.in:8080/jspui/bitstream/123456789/5621/1/01_synopsis.pdf

file:///C:/Users/hp%20user/Downloads/Corporate_Social_Responsibility_CSR_Opportunities_.pdf

http://www.ijsrp.org/research-paper-1213/ijsrp-p2486.pdf

https://www.hdfcbank.com/csr/index.aspx

https://www.sbifoundation.in/