Bangladesh Bank on Monday issued guidelines for the corporate social responsibility with a provision that banks and non-bank financial institutions would face punitive measures if they allocate CSR fund to assist any act of militancy and terrorism and in favour of any entity connected with their directors and management members. The BB issued a circular and the guidelines to managing directors and chief executive officers of all scheduled banks and NBFIs asking them to ensure that the CSR support allocations do not end up financing militancy and terrorism.
Any suspected event of such abuse of CSR assistance must be reported to the law enforcement authorities, stopping the CSR assistance forthwith, failure to do so the banks and NBFIs will attract penal proceedings under anti money laundering and combating the financing of terrorism laws and regulations, the guidelines said.
The board of directors of the banks and NBFIs 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.
Annual CSR programmes in terms of board-approved CSR policies of a bank and NBFIs will be drawn up and implemented by a dedicated CSR unit set up by its head office, or in case of larger programmes, by a foundation set up specifically for this purpose.
Activities of the dedicated CSR units and foundations will be under the oversight of the BB’s CSR and supervision departments, besides that of the banks’ and NBFIs’ own internal audit and internal controls.
The bank and NBFIs with no post-tax net profit surplus may postpone making fresh CSR programme expenditure commitments but should continue honouring previous commitments like educational scholarship for a student’s educational course period.
The banks and NBFIs will have to use 30 per cent of total CSR expenditure in education sector for the underprivileged population.
The expenditure should be for scholarships and stipends for students from low income family in reputed academic and vocational training institutions.
The banks and NBFIs will have to allocate at least 20 per cent of their CSR fund for preventive and curative healthcare support assistance for underprivileged population segments.
Support assistances in the health sector would include direct grants towards costs of curative treatment of individual patience, towards costs of running hospitals and diagnostic centres engaged substantially in treatment of patients from the underprivileged population segments.
The banks and NBFIs will have 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 will be used in such other areas as emergency disaster relief, promoting adoption of environmentally sustainable output practices and lifestyles, promoting artistic, cultural, literary, sports and recreational facilities for the underprivileged people.
Every bank and NBFI will be responsible for monitoring of proper utilisation of the CSR support assistances for the intended purposes, the BB guidelines said.
In case of CSR assistances to institutions and organisations, the dedicated CSR units and foundations of the banks and NBFIs should get into memorandums of understanding with the assistance recipients, the guidelines said.
The dedicated CSR unit and foundation of the banks and NBFIs should collect and file reports and documents sufficient to ascertain proper end use if they allocate fund to individual person.
The boards of the banks and NBFIs should review reports of CSR allocation end use monitoring annually before approving fresh allocations for subsequent years, and all end use monitoring records should be kept available for inspection by internal and external audit and by the BB supervision officials.
-With New Age input
