Bangladesh Bank has taken moves to streamline monitoring on the corporate social responsibility activities of banks and financial institutions after the improper uses of fund under the CSR sparked controversies and backbites between the finance minister and the Janata Bank’s immediate past chairman last week. BB officials said that they would make it mandatory for banks and financial institutions to keep the detail of the CSR activities like the identity of the recipients.
They said a circular in this connection would be issued within a week.
The Bank and Financial Institution Division suspended the CSR activities of state-owned Janata Bank, Agrani Bank, Rupali Bank and Bangladesh Development Bank until further notice since August 28.
Finance ministry officials said they took the measure by the directive of finance minister AMA Muhith after the banks increased CSR activities manifolds and put pressure on the banks’ capital.
The temporary suspension prompted Janata Bank immediate past chairman Abul Barkat to react sharply against the move and to engage in trading backbites with Muhith in last week.
Barkat on Wednesday branded Muhith as an ‘intellectual fraud’, ‘agent of neo-liberal economy’ and a ‘liar’ one day after Muhith said Barkat was frustrated as the government was not extending his term as bank chairman.
BB spokesman Mahfuzur Rahman told New Age that the central bank had already asked the state-owned banks to send reports on the CSR they had done in last year.
All the commercial banks every year submit the CSR reports that include amount of money they spend, he said.
He said the central bank could ask the banks to specify the CSR spending with detail of the recipient as part of strengthened monitoring.
He pointed out there was no direct connection between the CSR guidelines and the CSR monitoring.
The BB spokesman said the BB for the first time drafted a policy on the CSR after it had issued guidelines time to time in this regard in the past. He expected that the policy would be finalised at the end of this month.
Finance ministry officials said the CSR fund became main agenda of the many state-owned banks’ directors who were appointed mainly on political consideration.
They said a nexus between the motivated directors and corrupt bankers were active in the banking sector to approve CSR fund.
They said their activities increased substantially with approaching of their terms.
A government committee on militancy resistance and prevention led by the home ministry has been recommending that CSR fund should be invested to produce anti-militancy films and documentaries.
BB data showed that the scheduled banks spent Tk 304.66 crore for CSR activities in 2012 and Tk 218.83 crore in 2011. The commercial banks and financial entities spend CSR fund mainly on education and health sectors.
The CSR initiatives of banks and financial institutions have expanded several folds over the past few years, said BB governor Atiur Rahman while addressing the launching ceremony of ‘Report on CSR in Bangladesh 2014 Bangladesh’ in last May.
He said the CSR expenditure by FIs stood at Tk 447 crore as against Tk 50 crore in 2009.
-With New Age input
