Corporate Social Responsibility in Banks

integrated loving certificate of indebtedness in Banks S. Kavitha1 Abstract bodily affectionate tariff stands for line of descent contribution to sustainable schooling and c all overs political blow upys progressive battle in different fields, mankind rights, human resources, relations with clients, suppliers, and other situation holders, integrated governance, environment and contribution to union and bon ton. The accessible responsible attitude is underlying part of the identity of pecuniary institutions like banks, and it is one of their distinctive features.The replacement Bank of India has asked the banks to pay supererogatory attention towards integration of sociable and environmental concerns in their championship operations. numerous of the newly formed private and overseas banks ar aware of the vastness of such a step and therefore are having an active CSR discussion section in their banks. This paper is an attempt to explain the concept of coll ective social responsibility and the different CSR practices followed by banks in India. Key Words CSR collective genial Responsibility, Friedmans View, Carrolls View, Discretionary Responsibilityembodied accessible Responsibility in Banks S. Kavitha2 Introduction Corporate social responsibility stands for business contribution to sustainable development and covers corporations active participation in different fields, human rights, human resources, relations with clients, suppliers, and other stake holders, corporate governance, environment and contribution to biotic community and society. The concept of social responsibility proposes that a private corporation has responsibilities to society that extend beyond devising profit.Social responsibility is the way of life for most business organic laws. It enables alto conducther such activities ranging from providing safe products and service to giving a portion of phoners profit to welfare organization. The social responsib le attitude is integral part of the identity of financial institutions like banks, and it is one of their distinctive features. The Re perform Bank of India has asked the banks to pay special attention towards integration of social and environmental concerns in their business operations.Many of the newly formed private and opposed banks are aware of the wideness of such a step and therefore are having an active CSR department in their banks. Concept of Social Responsibility Corporate social responsibility is the sense of obligation on the part of companies to build social criteria in to their strategic de lineination-making. The concept implies that when companies evaluate decision from an critical perspective there should be presumption in privilege of adopting course of action that enhance the welfare of society at large. The goals selected faculty be quite specific. To enhance the welfare of communities in which association is based. To cleanse the environment To empower employees to give them a sense of self worth. contrastive take cares on social responsibility Friedmans Traditional View of headache Responsibility Urging a return to a laissez-faire planetary economy with a minimum of government regulations, Friedman argues against the concept of social responsibility. offer Smith and Milton Friedman, economists, according to them the hardly responsibility of business is to perform its sparing functions efficiently and provide goods and services for society and earn maximum profits.By doing so business performs its economic functions and leaves the social functions to other institutions of society, such as the government. A businessperson who acts responsibly by cutting the price of the rigids product to prevent inflation or by making expenditures to surmount pollution, or by hiring the hard-core unemployed, according to Friedman, is spending the shareowners money for general interest. Even if businessperson has shareholder authorization or encouragement to do so, he or she is still acting from motives other than economic, in the long run it may harm the society the firm is trying to help.Friedman referred o the social responsibility of business as fundamentally subversive doctrine and stated that There is one and only one social responsibility of business, to use its resources engage in activities knowing to increase its profits so long as it stays inside the rules of the game, which is to say, engages in open and free competition with egress deception of fraud. But this view is severely criticized on several grounds. On the other extreme, there is diametral view, which favors the position that it is imperative for businesses to be socially responsible.This is based on the lineage that business organizations are a part of society and down to serve primarily societal interests rather than narrow economic objectives such as profit maximization. In doing so they draw to deal with social concerns and issues an d view as to allocate resources for solving social problems. Carrolls four responsibilities of business. Archie Carroll proposes that the managers of business organizations squander four responsibilities Economic ResponsibilitiesEconomic responsibilities of a business organizations management are to produce goods and services of value to society so that the firm can repay for its creditors and shareholders. Legal Responsibilities Legal responsibilities are outlined by governments in intelligent philosophys that management is expected to obey. For eg, U. S. business firms are infallible to hire and promote mickle based on their credentials rather then to discriminate based on non-job-related characteristics such as race, sexual practice or religion. Ethical Responsibilities Ethical responsibilities of an organizations management are to ollow the loosely held beliefs about behavior in a society. E. g. , Society by and large expects firms to work with the employees and the comm unity is planning for layoffs, even though no law may require this. The affected people can get genuinely upset if an organizations management fails to act according to generally prevailing estimable values. Discretionary Responsibilities Discretionary responsibilities are the purely uncoerced obligations a corporation assumes. Examples are philanthropic contributions, training the hard-core unemployed, and providing sidereal sidereal day care centers.The difference between ethical and discretional responsibilities is that few people expect an organization to fulfill discretionary responsibilities, whereas many expect an organization to fulfill ethical ones. Carroll lists these four responsibilities in order of priority. Social responsibility implys both ethical and discretionary but not economic and legal responsibilities. A firm can fulfill its ethical responsibilities by fetching actions that society tends to value but has not yet put into law.When ethical responsibilities are satisfied, a firm can focus on discretionary responsibilities. The discretionary responsibilities of today can become the ethical responsibilities of tomorrow. E. g. , Provision of day care facilities, is moving speedyly from being discretionary to ethical responsibility. Benefits trustworthy from being socially responsible 1. Being known as a socially responsible firm may provide a company a competitive advantage. Programs to reduce pollution can actually reduce waste and maximize resource productivity. 2.Their environment concerns may enable them to commissioning premium prices and gain brand loyalty. (Ben &038 Jerrys Homemade Inc. ) 3. Their trustworthiness may help them generate enduring relationships with suppliers and distributors without needing to spend a lot of cartridge holder and money policing contracts. (Maytag) 4. They can deplumate outstanding employees who prefer working for a responsible firm (Procter &038 Gamble) 5. They are more likely to be welcomed into foreign country (Levi Strauss) 6. They can utilize the good volition of public officials for concord in difficult times (e. . Minnesota supported Dayton-Hudsons fight to obviate being acquired by Dart Industries of Maryland) 7. They are more likely to attract capital infusions from investors who view reputable companies as desirable long-term investments (Rubbermaid). CSR in India India has been named among the top ten Asian countries who are paying an increasing importance towards corporate social responsibility (CSR) revealing norms, a mass says. consort to social enterprise CSR Asias Asian Sustainability Ranking (ASR), India was ranked twenty-five percent in the list, which was topped by Australia.The other countries in the list include China (second), Hong Kong (Third), Japan (fifth), Malaysia (sixth), Pakistan (seventh), Philippines (eighth), Singapore (ninth) and Thailand (tenth). The 2009 ASR list was dominated by Australian companies, with eight out of the top ten com panies analysed coming from there, followed by India, the survey said. However, the report further said although there are increasing levels of disclosure in the Asian region, it still is generally poor compared with Europe and unification America. In India we find surprisingly high levels of disclosure, particularly from large companies with treasure brands such as Tata and Infosys. Leading oil companies (such as ONGC and the Indian embrocate Corporation) also have reasonable levels of disclosure, the report said. CSR beginning(a)s in banks The benefits of CSR for companies include change magnitude profit, customer loyalty, trust, decreed brand attitude and combating negative publicity. CSR strategies have been embraced by the international banking community. 0 Major international private banks have gestural the Equator Principles agreement which supports socially responsible development. (Eg of such banks are Citigroup, JPMorgan, Bank of America, ABN Amro, Barclays, HSBC and ING). question suggests that dissatisfaction is the major reason why customers switch banks this arises mainly because of rising fee. ordinarily to get more favorable price, customers try to switch banks. Most of the customers have accounts in more than one bank so they find it actually easy to compare the services and accordingly they do their transactions.So, customer perturbation has become an important issue for the banks. The customer loss may have an adverse effect on bank market share and profit. So if the banks concentrate more on CSR and spent more for this that will farm a good image for the banks which in turn will find many new customers to the banks and also the customer loss can be reduced. RBI guidelines on CSR The Reserve Bank of India is now rooting for environment conservation and fair social practices.The central bank has asked banks to put in place a suitable and appropriate plan of action towards service the cause of sustainable development, with the app roval of their boards. Spurred on by the general momentum in sustainable development and the initiative being taken on various fronts by different organisations, including all major banks globally, Indian banks have been encouraged to actively look at corporate social responsibility, sustainable development and non-financial reporting.Among banks in India, ABN Amro Bank was the first to put out a sustainability report recently. It includes key indicators on the bank and its subsidiaries environmental (like paper, water and electricity usage) and social governance performance. Other companies, which issue sustainability reports, include ITC, Tata Tea, Dr Reddys and Reliance. Sustainable development essentially refers to the process of maintenance of the quality of environmental and social systems in the pursuit of economic development.Non-financial reporting is radicalally a system of reporting by organisations on their activities, which includes environmental, social and economi c accounting. scoop up CSR practices in Banks Some Examples SBI State Bank of India Apart from the normal banking operations, the Bank, as a responsible and responsive corporate citizen, seeks to reinvest part of its profit in various community welfare projects to improve the quality of life of the poor, neglected, weaker and downtrodden sections of society. In the financial yr 2007-08, the Bank made donations aggregating Rs. . 11 crore to various allayer Funds and also to NGOs / Trusts / Societies for their projects with social orientation. In recognition of its contribution to cracker-barrel Community cultivation, the Bank was awarded the prestigious Readers Digest Pegasus Corporate Social Responsibilities Award 2007. Infact, it was the only Bank to have received this recognition. down the stairs a new scheme named Adoption of the Girl Child over 8,300 poor girl children have been adopted by various branches passim the country to meet their personal and educational expens es.This is not merely a financial assistance scheme but offers emotional and psychological support to the adopted girls due to the active involvement and care of the SBI Ladies Clubs. From the Research and Development Fund, the Bank has so far extended Rs. 6. 61 crore as investigate grants to 71 chairs / research projects at various Universities and Academic institutions. For the current year SBI has extended 100000 Sterling Pounds to London School of Economics for establishing an India outlook and I. G.Patel Chair at their Asia Research Centre in participation with RBI. ICICI human An example for CSR practices by banks is the ICICI foundation. ICICI Bank runs a very active and thoroughly known foundation in India but there is no understandably visible link of the ICICI Foundation on the website. ICICI is also very active in its support of government programs to improve the livelihoods of people. ICICI Bank has joined reach with NGOs to reach out to children in ten states help ing them have advance access to education precedent Chartered BankThe human immunodeficiency virus/acquired immune deficiency syndrome pandemic is a global challenge faced by measure Chartered as a business. In different developing countries HIV has a significant bear on and they respond to this curriculum through invigoration with HIV programme, , a global policy aimed at protecting basic human rights, promoting the health of their employees and keeping the business costs associated with HIV/ back up to a minimum. The programme is well established and focuses on the following areas superlative ken with their employees through training Educating local people about the bar and treatment of HIV Strengthening their position as thought leading in HIV/AIDS share their knowledge with other organisations archetype Chartered, which happens to be one of the countrys largest international banks, is involved in real partnerships with local community organisations, involving active p articipation of its employees in their community projects. It is the human face of banks. Or what is called corporate social responsibility, the new term devised for the social service that companies do with some of their profits.The global community programme of the bank is called Believing in Life. Part of this is the internal initiative Living with HIV. An extension of the programme in Africa, it seeks to create awareness about this deadly disease and thus help prevention by educating all its staff across the different countries from where the bank operates. Banks like HDFC, SBI, ICICI, HDFC, Standard Chartered Bank are now active in a host of areas including primary education, women empowerment, rehabilitation of poor, and aged environmental issues Future of CSRThe Corporate Social Responsibility has increased in importance around the world. The world becomes a global village in the information technology era. Sharing and accessing of information become very easy. All big compan ies are expanding their business opportunities all over the world. Simultaneously the CSR activities also expanding speedily where company initiatives started. at once these days all(prenominal) company feels CSR is unavoidable and responsible thing. Moreover companies allocating weaken budget and deploying professionals for CSR initiatives.It shows that it is emerging as a powerful thing in social development sector. The Corporate Social Responsibility (CSR) is high on every corporate agenda. Social commitment is an essential part of every company. Corporate social responsibility involves the aspiration to make a positive contribution to the progress of the company and society. If a company initiates CSR wing the company concerned need to work hard consequently on a formal, coherent and transparent policy in this field. Then only the CSR will become a potential area for development of the society.Conclusion The rapid information technology innovations are changing the face of Cor porate Social Responsibility. The concept of CSR is still debatable in democratic countries. There is a major criticism in all over the world is corporate companies are utilizing this concept to build their business expansion. Through this concept corporate companies are liaison and lobbying with higher bureaucracy in the government to get permissions/licenses to their companies easily. Many companies are getting tax exemptions by carrying out these social development activities.The increased awareness of CSR has also come about as a result of the United Nations Millennium Development Goals, in which a major goal is the increased contribution of assistance from large organizations, specially Multi-National Corporations, to help alleviate poverty and hunger, and for businesses to be more aware of their impact on society. There is a lot of potential for CSR to help with development in poor countries, especially community-based initiatives. CSR can be very oft useful for the financia l institutions like banks to get good reputation in the society.Banks should do the CSR activities to the fullest benefit to the society and not just for the sake of doing it. References Sen, S. , Bhattacharya, C. B. , Korshun, D. (2006), The mathematical function of corporate social responsibility in strengthening multiple stakeholder relationships a field experiment, Journal of the Academy of Marketing Science, Vol. 34 pp. 158-66. Bhattacharya, C. B. , Sankar Sen and Daniel Korschun (2008), utilize Corporate Social Responsibility to Win the War for Talent, MIT Sloan Management Review, 49 (2), 37-44 The Good Company, The Economist (2005-01-20).Retrieved on 2008-25-07 Financial Express, Wednesday, Oct 28, 2009 at 1541 hrs IST http//www. karmayog. org/csr501to1000/csr501to1000_21878. htm http//www. csbanking. com. au/ http//economictmes. indiatimes. com/News http//www. deccanherald. com/deccanherald/july202004/spt9. asp http//www. financialexpress. com/fe_full_story. php &8212&8212 &8212&8212&8212&8212&8212 1 S. Kavitha, MBA,MCA. ,MPhil. ,NET. , Asst. Prof, MBA, Vivekanandha Institute of Information &038 Management Studies, Tiruchengode, Namakkal Dt. , 637 205, Research Scholar, Anna University, Coimbatore telecommunicate99421-60277, email email&160protected om 2 S. Kavitha, MBA,MCA. ,MPhil. ,NET. , Asst. Prof, MBA, Vivekanandha Institute of Information &038 Management Studies, Tiruchengode, Namakkal Dt. , 637 205, Research Scholar, Anna University, Coimbatore band99421-60277, email email&160protected com &8212&8212&8212&8212&8212&8212&8212 Economic Legal Ethical Discretionary (Must do) (Have to do) (Should do) (Might do) Social responsibilities