INDEX

SI
NO

PARTICULARS

1.

INTRODUCTION OF BANK
1.1 MEANING OF BANK
1.2 HISTORY OF BANK
1.3 TYPES OF BANK
1.4 FEATURE OF BANK
1.5 FUCTION OF BANK

2.

CORPORATE SOCIAL RESPONSIBILITY

2.1 INTRODUCTION OF CSR
2.2 HISTORY OF CSR
2.3 DEFINITION OF CSR
2.4 CHARACTRISTICS OF CSR
2.5 TYPES OF CSR
2.6 BENEFITS OF CSR
2.7 ADVANTAGE OF CSR
2.8 NEED OF CSR
2.9 COMPONENTS OF CSR
2.10 STAGES OF CSR
2.11 ARGUMENT IN SUPPORT OF CSR
2.12 PART MODEL OF CSR
2.13 STANDARD OF CSR

3.

CORPORATE SOCIAL RESPONSIBILITY IN

BANK
3.1 INTRODUCTION OF CSR IN BANK
3.2 CSR IN INDIA
3.3 FOUR PHASES OF CSR DEVELOPMENT
IN IDIA
3.4 CURRENT STATE OF CSR IN BANK
3.5 ROLE OF CSR IN BANKING SECTOR

PAGE NO

3.6 CSR PRACTICES

3.7 IMPACT OF CSR IN BANK
4.

BANK OF BARODA
4.1 INTRODUCTION OF BANK OF BARODA
4.2 HISTORY OF BANK OF BARODA
4.3 REWARDS OF BANK OF BARODA
4.4 SUBSIDIARIES
4.5 INTEMATIONAL PRESENCE

5.

CSR IN BANK OF BARODA

5.1 CSR PRACTICES IN BANK OF BARODA
5.2 CSR ACTIVIES IN BANK OF BARODA
5.3 CSR INITIATIVES
5.4 CSR POLICY IN BANK OF BARODA

6.

QUESTIONNERS

7.

CONCLUSION

8.

BIBLOGRAPHY

Chapter 1

Introduction of Bank

1.1 Meaning
1.2 History of Bank
1.3 Types of Bank
1.4 Feature of Bank
1.5 Function of Bank

1.1 Meaning of bank

A bank is a financial institution licensed by a government. Its primary activities include

borrowing and lending money. Many other financial activities were allowed over time.
For example, banks are important Players in financial markets and offer financial
services such as investment funds. In some countries such as Germany, banks have
historically owned major stakes in industrial corporations while in other countries such
as the United States banks are prohibited from owning non-financial companies. In
Japan, banks are usually the nexus of a cross-share holding entity known as the
zaibatsu. In France, banc assurance is prevalent, as most banks offer insurance services
(and now real estate services) to their clients.

1.2 History of bank

In India, the banking system is as old as early Vedic period. The book
of Manu contains reference regarding deposits advances, pledge policy of loan, and rate
of interest. From the beginning of 20thcenturybanking has been so developed that in
fact, has come to be called LIFE BLOOD of trade and commerce.
In India, banking has developed from the primitive stage to the modern system of
banking in a fashion that has no parallel in the world history.
With the dawn of independence, changes of vast magnitude have taken place in India.
After independence India launched a process of planned economic activity in order to
overcome the multitude of problems it faced as an underdeveloped nation. The
increasing tempos of economic activity lead to tremendous increase in the volume and
complexity of banking activity. Therefore, the role of banks has had to expand at a fast
pace.
As engines of development and vehicle of silent Socio-economic revolution in the
country, Indian banks have assumed new responsibilities in the fields of geographical
expansion, functional diversification and personal portfolio. Indian banking transformed
itself from Class banking to Mass banking.
6

Banking system, the most dominant segment of financial sector, accounts for over 80%
of the funds flowing through the financial sector.

A banking sector performs three Primary functions in an economy: The operation of the
payment system, the mobilization of savings and the allocation of savings to investment
projects. By allocating capital to the highest value use while limiting the risk and cost
involved, the banking sector can exert a positive influence on the overall economy, and
thus of broad macroeconomic importance.
The origin of the Indian banking industry may be traced to the establishment of bank of
Bengal in Calcutta (now Kolkata) in 1786. The growth of banking industry in India may
be studied in terms of two broad phases. Pre-independence (1786-1947) and Post
independence (1947 till date). The Post-independence phase may be further divided into
three sub phases such as pre-nationalization period (1947-1969). Post nationalization
period (1969 to 1991) and Post-liberalization period (1991 till date).

Pre-Independence Era:At the end of late 18thCentury, there was hardly any bank in India in the modern
sense of the term banks. Some banks were opened at that time which functions as
entities to finance industry, including speculative trade. With the large exposure to
speculative ventures, most of the banks opened in India during that period could not
survive and failed. The depositors lost money and lost interest in keeping deposits with
the bank. Subsequently, banking in India remains the exclusive domain of Europeans
for the next several decades until the beginning of 20thCentury.
At the beginning of 20thCentury, the Indian Economy was passing through a relative
period of stability. Around five decades have elapsed since the Indias first war of
Indian independence and the social, industrial and other infrastructure have developed.
At that time there were very small banks operated by Indians and most of them were
owned and operated by particular community. The banking in India was controlled and
dominated by the presidency banks, namely, the bank of Bombay, The bank of Bengal
and the bank of Madras-which later on merged to form the imperial bank of India.
7

The objectives of banks in the colonial era were mainly helping the colonial rulers in
raising the resources for their empire building activities and facilitating training
activities of the numerically small mercantile.
India has a long history of both public and private banking. Modern banking in India
began in the 18thcentury, with the founding of the English Agency House in Calcutta
and Bombay. In the first half of the 19thCentury three presidency banks were founded.
After the 1860 introduction of limited liability, private banks began to appear and
foreign banks entered into the markets. The beginning of the 20thCentury saw the
introduction of Joint stock banks. In 1935, the presidency banks were merged together
to form the Imperial Bank of India, which was subsequently renamed the State Bank of
India. Also that year, Indias Central Bank, The Reserve Bank of India began operation.

Post-Independence era:With the dawn of Independence changes of vast magnitude have taken place in India. At
the time of Independence in 1947, the banking system in India was fairly well
developed with over 600 commercial banks operating in the country. However soon
after independence, the view that the banks from the colonial heritage were biased in
favour of working capital loans for trade and large firms and against extending credit to
small scale enterprises, agriculture and commoners, gained prominence. To ensure
better coverage of
banking needs of larger parts of economy and the rural constituencies, the Government
of India nationalized the Imperial bank which was established in 1921 and transformed
it into the State Bank of India with effect from 1955.Despite the progress in 1950s and
1960s, it was felt that the creation of SBI was not far reaching enough since the banking
needs of small scale industries and the agricultural structure was still not covered
sufficiently. This was partially due to the existing close ties commercial and industry
houses maintained with the established commercial banks, which give them an
advantage in obtaining credit. Additionally, there was a perception that banks should
play a more prominent rule in Indias development strategy by mobilizing resources for
sectors that were seen as crucial for economic expansion.. As a result, the policy of

social control over banks was announced. Its aim was to cause changes in the
management and distribution of credit by commercial banks.

Characteristics of a Bank
1. Dealing In Money
2. Individual/Firm/Company
3. Acceptance Of Deposit
4. Giving Advances
5. Payment and Withdrawal
6. Agency and Utility Services
7. Profit and Services Orientation
8. Ever In Creasing Function
9. Connecting Link
10. Banking Business
11. Name Identify

1. Dealing in Money
Bank is a financial institution which deals with other people's money i.e. money given
by depositors.

2. Individual / Firm / Company

A bank may be a person, firm or a company. A banking company means a company
which is in the business of banking.

3. Acceptance of Deposit
A bank accepts money from the people in the form of deposits which are usually
repayable on demand or after the expiry of a fixed period. It gives safety to the deposits
of its customers. It also acts as a custodian of funds of its customers.

4. Giving Advances
9

A bank lends out money in the form of loans to those who require it for different
purposes.

5. Payment and Withdrawal

A bank provides easy payment and withdrawal facility to its customers in the form of
cheques and drafts It also brings bank money in circulation. This money is in the form
of cheques, drafts, etc.

6. Agency and Utility Services

A bank provides various banking facilities to its customers. They include general utility
services and agency services.

7. Profit and Service Orientation

A bank is a profit seeking institution having service oriented approach.

8. Ever increasing Functions

Banking is an evolutionary concept. There is continuous expansion and diversification
as regards the functions, services and activities of a bank.

9. Connecting Link
A bank acts as a connecting link between borrowers and lenders of money. Banks
collect money from those who have surplus money and give the same to those who are
in need of money.

10. Banking Business

A bank's main activity should be to do business of banking which should not be
subsidiary to any other business.

11. Name Identity

10

A bank should always add the word "bank" to its name to enable people to know that it
is a bank and that it is dealing in money.

Types of bank
There are different types of bank:

1. Saving Banks:
Saving banks are established to create saving habit among the people. These banks are
helpful for salaried people and low income groups. The deposits collected from
customers are invested in bonds, securities, etc. At present most of the commercial
banks carry the functions of savings banks. Postal department also performs the
functions of saving bank.

2. Commercial Banks:
Commercial banks are established with an objective to help businessmen. These banks
collect money from general public and give short-term loans to businessmen by way of
cash credits, overdrafts, etc. Commercial banks provide various services like collecting
cheques, bill of exchange, remittance money from one place to another place.
In India, commercial banks are established under Companies Act, 1956. In 1969, 14
commercial banks were nationalised by Government of India. The policies regarding
deposits, loans, rate of interest, etc. of these banks are controlled by the Central Bank.

3. Industrial Banks / Development Banks:

Industrial / Development banks collect cash by issuing shares & debentures and
providing long-term loans to industries. The main objective of these banks is to provide
long-term loans for expansion and modernisation of industries.

11

In India such banks are established on a large scale after independence. They are
Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment
Corporation of India (ICICI) and Industrial Development Bank of India (IDBI).

4. Land Mortgage / Land Development Banks:

Land Mortgage or Land Development banks are also known as Agricultural Banks
because these are formed to finance agricultural sector. They also help in land
development.
In India, Government has come forward to assist these banks. The Government has
guaranteed the debentures issued by such banks. There is a great risk involved in the
financing of agriculture and generally commercial banks do not take much interest in
financing agricultural sector.

5. Indigenous Bank:
Indigenous banks mean Money Lenders and Sahukars. They collect deposits from
general public and grant loans to the needy persons out of their own funds as well as
from deposits. These indigenous banks are popular in villages and small towns. They
perform combined functions of trading and banking activities. Certain well-known
Indian communities like Marwaries and Multani even today run specialised indigenous
banks.

6. Central / Federal / National Bank:

Every country of the world has a central bank. In India, Reserve Bank of India, in
U.S.A, Federal Reserve and in U.K, Bank of England. These central banks are the
bankers of the other banks. They provide specialised functions i.e. issue of paper
currency, working as bankers of government, supervising and controlling foreign
exchange. A central bank is a non-profit making institution. It does not deal with the
public but it deals with other banks. The principal responsibility of Central Bank is
thorough control on currency of a country.

7. Co-operative Banks:
12

In India, Co-operative banks are registered under the Co-operative Societies Act, 1912.
They generally give credit facilities to small farmers, salaried employees, small-scale
industries, etc. Co-operative Banks are available in rural as well as in urban areas. The
functions of these banks are just similar to commercial banks.

8. Exchange Banks:
Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of Foreign Banks
working in India. These banks are mainly concerned with financing foreign trade.
Following are the various functions of Exchange Banks:1. Remitting money from one country to another country,
2. Discounting of foreign bills,
3. Buying and Selling Gold and Silver, and
4. Helping Import and Export Trade.

9. Consumers Banks:
Consumers bank is a new addition to the existing type of banks. Such banks are usually
found only in advanced countries like U.S.A. and Germany. The main objective of this
bank is to give loans to consumers for purchase of the durables like Motor car,
television set, washing machine, furniture, etc. The consumers have to repay the loans
in easy instalments.

Functions of Banks

13

A. Primary Functions of Banks

The primary functions of a bank are also known as banking functions. They are the
main functions of a bank.
These primary functions of banks are explained below.

1. Accepting Deposits
The bank collects deposits from the public. These deposits can be of different types,
such as :
a. Saving Deposits

14

b. Fixed Deposits
c. Current Deposits
d. Recurring Deposits

a. Saving Deposits
This type of deposits encourages saving habit among the public. The rate of interest is
low. At present it is about 4% p.a. Withdrawals of deposits are allowed subject to
certain restrictions. This account is suitable to salary and wage earners. This account
can be opened in single name or in joint names.

b. Fixed Deposits
Lump sum amount is deposited at one time for a specific period. Higher rate of interest
is paid, which varies with the period of deposit. Withdrawals are not allowed before the
expiry of the period. Those who have surplus funds go for fixed deposit.

c. Current Deposits
This type of account is operated by businessmen. Withdrawals are freely allowed. No
interest is paid. In fact, there are service charges. The account holders can get the
benefit of overdraft facility.

d. Recurring Deposits
This type of account is operated by salaried persons and petty traders. A certain sum of
money is periodically deposited into the bank. Withdrawals are permitted only after the
expiry of certain period. A higher rate of interest is paid.

2. Granting of Loans and Advances

The bank advances loans to the business community and other members of the public.
The rate charged is higher than what it pays on deposits. The difference in the interest
rates (lending rate and the deposit rate) is its profit.

15

The types of bank loans and advances are :a. Overdraft

b. Cash Credits
c. Loans
d. Discounting of Bill of Exchange

a. Overdraft
This type of advances is given to current account holders. No separate account is
maintained. All entries are made in the current account. A certain amount is sanctioned
as overdrafts which can be withdrawn within a certain period of time say three months
or so. Interest is charged on actual amount withdrawn. An overdraft facility is granted
against a collateral security. It is sanctioned to businessman and firms.

b. Cash Credits
The client is allowed cash credit up to a specific limit fixed in advance. It can be given
to current account holders as well as to others who do not have an account with bank.
Separate cash credit account is maintained. Interest is charged on the amount withdrawn
in excess of limit. The cash credit is given against the security of tangible assets and / or
guarantees. The advance is given for a longer period and a larger amount of loan is
sanctioned than that of overdraft.

c. Loans
It is normally for short term say a period of one year or medium term say a period of
five years. Now-a-days, banks do lend money for long term. Repayment of money can
be in the form of instalments spread over a period of time or in a lump sum amount.
Interest is charged on the actual amount sanctioned, whether withdrawn or not. The rate
of interest may be slightly lower than what is charged on overdrafts and cash credits.
Loans are normally secured against tangible assets of the company.

16

d. Discounting of bill of exchange

The bank can advance money by discounting or by purchasing bills of exchange both
domestic and foreign bills. The bank pays the bill amount to the drawer or the
beneficiary of the bill by deducting usual discount charges. On maturity, the bill is
presented to the drawee or acceptor of the bill and the amount is collected.

B. Secondary Functions of Banks

The bank performs a number of secondary functions, also called as non-banking
functions.
These important secondary functions of banks are explained below.

1. Agency Functions
The bank acts as an agent of its customers. The bank performs a number of agency
functions which includes:a. Transfer of Funds
b. Collection of Cheques
c. Periodic Payments
d. Portfolio Management
e. Periodic Collections
f. Other Agency Functions

a. Transfer of Funds
The bank transfer funds from one branch to another or from one place to another.

b. Collection of Cheques

17

The bank collects the money of the cheques through clearing section of its customers.
The bank also collects money of the bills of exchange.

c. Periodic Payments
On standing instructions of the client, the bank makes periodic payments in respect of
electricity bills, rent, etc.

d. Portfolio Management
The banks also undertake to purchase and sell the shares and debentures on behalf of
the clients and accordingly debits or credits the account. This facility is called portfolio

management.
e. Periodic Collections
The bank collects salary, pension, dividend and such other periodic collections on
behalf of the client.

f. Other Agency Functions

They act as trustees, executors, advisers and administrators on behalf of its clients. They
act as representatives of clients to deal with other banks and institutions.

2. General Utility Functions

The bank also performs general utility functions, such as :a. Issue of Drafts, Letter of Credits, etc.
b. Locker Facility
c. Underwriting of Shares
d. Dealing in Foreign Exchange
e. Project Reports
18

f. Social Welfare Programmes

g. Other Utility Functions

a. Issue of Drafts and Letter of Credits

Banks issue drafts for transferring money from one place to another. It also issues letter
of credit, especially in case of, import trade. It also issues travellers' cheques.

b. Locker Facility
The bank provides a locker facility for the safe custody of valuable documents, gold
ornaments and other valuables.

c. Underwriting of Shares
The bank underwrites shares and debentures through its merchant banking division.

d. Dealing in Foreign Exchange

The commercial banks are allowed by RBI to deal in foreign exchange.

e. Project Reports
The bank may also undertake to prepare project reports on behalf of its clients.

f. Social Welfare Programmes

It undertakes social welfare programmes, such as adult literacy programmes, public
welfare campaigns, etc.

g. Other Utility Functions

It acts as a referee to financial standing of customers. It collects creditworthiness
information about clients of its customers. It provides market information to its
customers, etc. It provides travellers' cheque facility.

19

Chapter 2

20

21

Introduction

2.1 Introduction of Corporate Social Responsibility

2.2 Definition of Corporate Social Responsibility
2.3 History of Corporate Social Responsibility
2.4 Characteristics of Corporate Social Responsibility
2.5 Need of Corporate Social Responsibility
2.6 Advantage of Corporate Social Responsibility
2.7 Benefits of Corporate Social Responsibility
2.8 Types of Corporate Social Responsibility
2.9 Components of Corporate Social Responsibility
2.10 Stages of Corporate Social Responsibility
2.11 Arguments In Support of Corporate Social Responsibility
2.12 Part Model of Corporate Social Responsibility
2.13 Standard of Corporate Social Responsibility

22

Introduction
Corporate social responsibility
Corporate social responsibility (CSR, also called corporate conscience, corporate
citizenship or responsible business) is a form of corporate self-regulation integrated into
a business model. CSR policy functions as a self-regulatory mechanism whereby a
business monitors and ensures its active compliance with the spirit of the law, ethical
standards and national or international norms. With some models, a firm's
implementation of CSR goes beyond compliance and engages in "actions that appear to
further some social good, beyond the interests of the firm and that which is required by
law." The aim is to increase long-term profits and shareholder trust through positive
public relations and high ethical standards to reduce business and legal risk by taking
responsibility for corporate actions. CSR strategies encourage the company to make a
positive impact on the environment and stakeholders including consumers, employees,
investors, communities, and others.
Proponents argue that corporations increase long-term profits by operating with a CSR
perspective, while critics argue that CSR distracts from businesses' economic role. A
2000 study compared existing econometric studies of the relationship between social
and financial performance, concluding that the contradictory results of previous studies
reporting positive, negative, and neutral financial impact, were due to flawed empirical
analysis and claimed when the study is properly specified, CSR has a neutral impact on
financial outcomes.
Critics questioned the "lofty" and sometimes "unrealistic expectations" in CSR. Or that
CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a
watchdog over powerful multinational corporations.
Political sociologists became interested in CSR in the context of theories of
globalization, neoliberalism and late capitalism. Some sociologists viewed CSR as a
form of capitalist legitimacy and in particular point out that what began as a social

23

movement against uninhibited corporate power was transformed by corporations into a

'business model' and a 'risk management' device, often with questionable results.
CSR is titled to aid an organization's mission as well as serve as a guide to what the
company represents for its consumers. Business ethics is the part of applied ethics that
examines ethical principles and moral or ethical problems that can arise in a business
environment. ISO 26000 is the recognized international standard for CSR. Public sector
organizations (the United Nations for example) adhere to the triple bottom line (TBL).
It is widely accepted that CSR adheres to similar principles, but with no formal act of
legislation.

Definition
A company's sense of responsibility towards the community and environment (both
ecological and social) in which it operates. Companies express this citizenship (1)
through their waste and pollution reduction processes, (2) by contributing educational
and social programs, and (3) by earning adequate returns on the employed resources.
See also corporate citizenship.

According to cannon, corporate social responsibility means devising corporate

strategies and building a business with the societys needs in mind.

Evolution of corporate social responsibility in India

The evolution of corporate social responsibility in India refers to changes over time in
India of the cultural norms of corporations' engagement of corporate social
responsibility (CSR), with CSR referring to way that businesses are managed to bring
about an overall positive impact on the communities, cultures, societies and
environments in which they operate The fundamentals of CSR rest on the fact that not
only public policy but even corporate should be responsible enough to address social
issues. Thus companies should deal with the challenges and issues looked after to a
certain extent by the states.

24

Among other countries India has one of the oldest traditions of CSR.] But CSR practices
are regularly not practiced or done only in namesake especially by MNCs with no
cultural and emotional attachments to India. Much has been done in recent years to
make Indian Entrepreneurs aware of social responsibility as an important segment of
their business activity but CSR in India has yet to receive widespread recognition. If
this goal has to be realised then the CSR approach of corporate has to be in line with
their attitudes towards mainstream business- companies setting clear objectives,
undertaking potential investments, measuring and reporting performance publicly.

Characteristics of Corporate Social Responsibility

The idea of Corporate Social Responsibility, CSR, first appeared in the late 1960s in
response to the need for businesses to address the effect of their pursuits on the
environment and society, in addition to the interests of their shareholders. CSR attempts
to portray corporations as responsible citizens who are concerned with issues of social
and environmental welfare.

The Public

CSR argues that corporations bear responsibility for the effect they have on
other sectors of society. The activities of corporations have an impact on
individuals who don't work for them and don't buy their products, through, for
example, secondary economic impacts and degradation of the natural
environment. CSR acknowledges this, and attempts to make the interactions
between corporations and society positive and productive. This can be done by
consulting with neighbours and citizens who are affected by corporate activities
and by striving for transparency in corporate pursuits so that the public knows
what is going on.

The Environment

Increased knowledge on the part of the public about declining resources, toxic
waste and global warming is compelling companies to make more efforts to be
more environmentally benign. The traditional view that the natural world is
merely a source of materials and an equally convenient dump for waste is being
25

challenged from many quarters, and CSR is an attempt by corporations to

respond to these concerns. The sincerity of changes being made on the part of
corporations includes some serious efforts to achieve sustainability and other
efforts that are essentially "green washing," activities in which corporations put
more effort into appearing green than into actually being green.

Clients

CSR challenges the traditional wisdom that the interests and needs of the clients
of a corporation will be adequately protected by the market itself. Because the
free market has been severely compromised by a combination of government
subsidies and manipulative marketing practices, CSR attempts to remedy this
situation by installing practices into corporate life that will monitor the
interaction between corporations and their clients in an attempt to ensure that
nobody is being exploited or cheated. Consumer protection can be enforced by
the government or voluntarily pursued by companies, the latter course have
clear advantages for the public relations of the company.

Staf

Staff and employees of corporations have a right to expect fair pay, safe working
conditions and meaningful work. CSR is one aspect of a transformation in the
corporate world that attempts to overcome archaic views of workers as mere
means to an end on the part of shareholders. Particularly in less developed
countries that are often the sites of intensive resource extraction, the treatment
of labor is frequently substandard. CSR is intended to promote the rights of all
workers and to ensure that corporations respect these rights and make whatever
changes are required to prevent the exploitation and mistreatment of labour.

CSR in bank

Advantages of corporate social responsibility

Advantages of based on corporate social responsibility:

1. Satisfied employees.
26

Employees want to feel proud of the organization they work for. An employee with a
positive attitude towards the company is less likely to look for a job elsewhere. It is also
likely that you will receive more job applications because people want to work for you.
More choice means a better workforce. Because of the high positive impact of CSR on
employee wellbeing and motivation, the role of HR in managing CSR projects is
significant.

2. Satisfied customers
Research shows that a strong record of CSR improves customers attitude towards the
company. If a customer likes the company, he or she will buy more products or services
and will be less willing to change to another brand.
Relevant research:

IBM study Attaining Sustainable Growth through Corporate Social

Responsibility: The majority of business executives believe that CSR activities
are giving their firms competitive advantage, primarily due to favourable
responses from consumers.

Better Business Journey, UK Small Business Consortium: 88% of consumers

said they were more likely to buy from a company that supports and engages in
activities to improve society.

3. Positive PR
CSR provides the opportunity to share positive stories online and through traditional
media. Companies no longer have to waste money on expensive advertising campaigns.
Instead they generate free publicity and benefit from worth of mouth marketing.

4. Costs reductions
Yes, you read this correctly. A CSR program doesnt have to cost money. On the
contrary. If conducted properly a company can reduce costs through CSR.
Companies reduce costs by:
27

More efficient staff hire and retention

Implementing energy savings programs

Managing potential risks and liabilities more effectively

Less investment in traditional advertising

5. More business opportunities

A CSR program requires an open, outside oriented approach. The business must be in a
constant dialogue with customers, suppliers and other parties that affect the
organization. Because of continuous interaction with other parties, your business will be
the first to know about new business opportunities.

6. Long term future for your business

CSR is not something for the short term. Its all about achieving long term results and
business continuity. Large businesses refer to: shaping a more sustainable society
(Vodafone 2010 report)

Need of corporate social responsibility

There Is A Need For Corporate Social Responsibility:

1. Better Public Image:

Each firm must enhance its public image to secure more customers, better employees
and higher profit. Acceptance of social responsibility goals lead to improve public
image.

2. Conversion of Resistances into Resources:

If the innovative ability of business is turned to social problems, many resistances can
be transformed into resources and the functional capacity of resources can be increased
many times.

3. Long Term Business Interest:

28

A better society would produce a better environment in which the business may gain
long term maximization of profit. A firm which is sensitive to community needs would
in its own self interest like to have a better community to conduct its business. To
achieve this it would implement social programmes for social welfare.

4. Avoiding Government Intervention:

Regulation and control are costly to business both in terms of money and energy and
restrict its flexibility of decision making. Failure of businessmen to assume social
responsibilities invites government to intervene and regulate or control their activities.
The prudent course for business is to understand the limit of its power and how to use
that power carefully and responsibly thereby avoiding government intervention.

Benefits of corporate social responsibility

There are benefits of corporate social responsibility.

Benefit 1: The ability to have positive impact in the

community
Keeping social responsibility front of mind encourages businesses to act ethically and to
consider the social and environmental impacts of their business. In doing so,
organisations can avoid or mitigate detrimental impacts of their business on the
community. In some cases, organisations will find ways to make changes in their
services or value chain that actually delivers benefits for the community, where

they once didnt.

Benefit 2: It supports public value outcomes
Put simply, public value is about the value that an organisation contributes to society. A
sound, robust corporate social responsibility framework and organisational mindset can
genuinely help organisations deliver public value outcomes by focussing on how their
services can make a difference in the community. This might happen indirectly, where
an organisations services enable others to contribute to the community, or directly
through the organisations own activities, such as volunteerism and philanthropy.
29

Benefit 3: It supports being an employer of choice

Being an employer of choice typically translates into the companys ability to attract
and retain high calibre staff. There are ways to approach being an employer of choice,
including offering work life balance, positive working conditions and work place
flexibility. Studies have shown that a robust corporate social responsibility framework
can also help a company become more attractive to potential future employees who are
looking for workplaces with socially responsible practices, community mindedness and
sound ethics.

Benefit 4: It encourages both professional and personal

development
Providing employees with the opportunity to be involved in a companys socially
responsible activities can have the benefit of teaching new skills to staff, which can in
turn be applied in the workplace. By undertaking activities outside of their usual work
responsibilities, employees have the chance to contribute to work and causes that they
might feel passionate about, or learn something entirely new which can help enrich their
own perspectives. By supporting these activities, organisations encourage growth and
support for employees.

Benefit 5: It enhances relationships with clients

A strong corporate social responsibility framework is essential to building and
maintaining trust between the company and clients. It can strengthen ties, build
alliances and foster strong working relationships with both existing and new clients.
One way this can be achieved is by offering pro-bono or similar services where a
company can partner with not-for-profit organisations to support their public value
outcomes, where funds or resources may be limited. In turn, this helps deliver public
value outcomes that may not have been delivered otherwise.
How has corporate social responsibility helped your organisation? What other benefits
have you experienced? Share your comments below!

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Types of corporate social responsibility

There are following types of corporate social responsibility:

Environment
Harvard professor and business theorist Michael Porter notes in his seminal text,
"On Competition," that businesses need to operate in ways that are not
environmentally wasteful. Once considered the cost of doing business, pollution
and rampant consumption of resources now represent a social and political
concern on the global level. Activists encourage corporations to voluntarily alter
operating procedures to reduce environmental impact, and government has
stepped in to regulate carbon emissions and apply stringent rules to waste
disposal.

Fiscal
Even under a stakeholder model, finances play a central role. Businesses that do not
yield a profit do not stay in business. Fiscal responsibility, however, extends beyond
mere profit generation. The economic catastrophe brought on by the subprime mortgage
crisis in 2008, along with several multibillion dollar Ponzi schemes, has highlighted the
need for ethical and transparent bookkeeping. Fiscal responsibility also means using the
most efficient procedures to minimize wasted capital. This can translate to anything
from new equipment or manufacturing processes to using software that streamlines data
processing.

Human Rights
The globalization of manufacturing has placed corporations in a precarious position
with regards to human rights. Even corporations that assemble products domestically
frequently purchase parts produced overseas, where child labor and lax safety
conditions are common. Socially responsible corporations often make commitments not
to purchase from overseas manufacturers that employ child labor or have poor safety
records. Mattel makes such a commitment with its Global Manufacturing Principles and
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ranked highly in human rights on "Corporate Responsibility" magazines 2012 list of

Best Corporate Citizens.

Philanthropic Works
Corporate philanthropy often takes the form of investments in the community. Common
examples of corporate philanthropy include supporting or fully funding educational
initiatives, scholarship programs and community beautification projects. The underlying
thought is that the community offers a support system to the corporation that goes
beyond mere staffing. By investing in the community, the corporation improves its own
support system and enhances the loyalty of its workforce. Corporate philanthropy also
serves as a signal to consumers that the business views itself as part of a social fabric,
rather than viewing the public as nothing more than a revenue source.

Components of Corporate Social Responsibility

The main components of corporate social responsibilities are as:

Community Involvement:
It refers to a wide range of actions taken by companies to maximize the impacts of their
spending, time products, services for the welfare of community at large.

Labour Security:
It includes freedom of association and the effective recognition of the right to collective
bargaining, the eliminations of all forms of forced and compulsory labour, the effective
abolition of child labour and the eliminations of discrimination in respect of
employment and occupation.

Environmental Protection:
The environmental issues have been global concerns thus the corporate sector also
focuses on finding sustain able solutions for natural resources and to reduce companies
impact on environment. Over the past several years, environmental responsibility has
expanded to involve substantially more than compliance with all applicable government
regulations or even a few initiatives such as recycling or energy efficiency.
32

Business Standard:
It covers a broad area of corporate activist such as ethics, financial return and
environment protections.

Educations and Leadership Development:

As education is one of the key elements of sustainable development and pro-poor
growth, businesses, working together with public sector and civil society can make an
important contribution in providing access to quality education for all further
companies can also make more critical impact on the development process by raising
standards n corporate education and leadership development.

Stages of Corporate Responsibility

1. Defensive: When companies are first criticized over some problem or issue, they
tend to take a defensive, often legalistic stance. They reject allegations of
wrongdoing and refuse to take responsibility, arguing that fixing the problem or
addressing the issue isnt their job.
2. Compliant: During this stage, companies adopt policies that acknowledge the
wishes of the public. As a rule, however, they do only what they have to do to
satisfy their critics, and little more. Theyre acting mainly to protect brands or
reputations and to reduce the risk of litigation.
3. Managerial: When it becomes clear that the problem wont go away, companies
admit that they need to take responsibility and action, so they look for practical
long-term solutions.
4. Strategic: At this point, they may start to reap the benefits of acting responsibly.
They often find that responding to public needs gives them a competitive edge and
enhances long-term success.
5. Civil: Ultimately, many companies recognize the importance of getting other
companies to follow their lead. They may promote participation by other firms in
their industries, endorsing the principle that the public is best served through
collective action.
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Arguments in Support of corporate Social Responsibility

The following arguments will support the involvement of business in social activities:

1. Public Requirements:
Business can exist only with public support and only if business fulfils needs of society.
One of main arguments for social responsibility is that public expectations from
business have changed. Therefore if business wishes to remain in existence for a long
term it must respond to societys needs and give society what society wants.
The business must come up to expectations of public for its survival since the demand
for products or services arises from customers who are a part of society. Since business
is a part and parcel of society, it must think of its responsibilities.

2. Favourable For Business:

Performance of social obligation by business will not only be in the interest of society
but in its own interest also. The firm which is more responsive to improvement of
community quality of life will as a result has better community in which it conducts its
business.
People with healthy environment, good health and education will make them good
customers and employees. Recruitment of labour will be of higher quality. Turnover and
absenteeism will be reduced. The society may reject an enterprise which does not care
for social welfare. Crime rate will also decrease as a result of social improvements.

3. Moral Justification:
Nowadays modern industrial society faces many serious social problems as a result of
emergence of large companies. Therefore these large corporations have a moral
responsibility to solve these problems. Also business which is using so many resources
of our economy has responsibility to devote some of these resources in overall
development of society.

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4. Socio-Cultural Norms:
In a country like India where social and cultural values have long and rich heritage, a
business promoting social equalities, healthy employer-employee relations and
consumer service will enjoy better social position. A business working against
traditional values will face criticism from society.

5. Business Can Shoulder Responsibility:

Many people who feel frustrated with failure of other institutions in handling social
problems are turning to the business for their solution to social problems. In such a
situation, it becomes the duty of business to come up to expectation of public and fulfil
its responsibilities towards society.

6. Responsibility Must Correspond With Power:

Business enjoys social power to a great extent. So they do affect economy, minorities
and other social problems. Business should perform equal amount of social
responsibility to match their social power. If they dont then it will reflect their
irresponsible behaviour, which will ultimately affect the natural growth.

7. Public Image:
Only that firm can enjoy better reputation in public which supports social goals. Each
firm seeks an enhanced public image so that it may gain more customers, better
employees, more responsive money markets etc. It is possible only if business performs
its responsibilities towards society whole-heartedly which will result in raising the
value of shares and debentures held by the owners.

8. Government Regulations:
If business does not respond positively to the needs of society, then it may be compelled
to do so through government laws and regulations. Before government stretches its long
arms, the business should discharge its obligations to society. It has to regulate the
business in public interest.

9. Indebted to Society:
Business units benefit from society. In return it also has certain debts that it owes to
society. Business uses vast pool of resources in terms of men, talents, expertise and
35

money. Business is in a position to work for social goals with the help of these
resources. Also corporations unlike citizens are created by society so they have certain
civic duties and responsibilities

Part model of corporate social responsibility

(Carrolls four-part model of corporate social responsibility (Carroll, 1991)
Economic responsibilities: The first responsibility of the company towards society
refers to running the business as an economically healthy unit. It includes aspects such
as return on investment for shareholders, fair employee salaries, and quality products
supplied to customers at fair prices; all required by the society. (Crane
& Matten, 2004)
Legal responsibilities: Demands that companies act in accordance with existing
legislation and regulatory requirements. The legal framework consequentially fosters
societys ethical view and all companies attempting to be socially responsible are
therefore required by society to follow the law. (Crane & Matten, 2004)
Ethical responsibilities: It refers to corporations responsibilities which are not covered
by legal or economical requirements, but instead by what could be considered as right
or fair in the eyes of society. Society therefore expects corporations to act ethically
towards their stakeholders. (Crane & Matten, 2004)
Philanthropic responsibilities: This involves corporations willingness to enhance the
quality of living for their stakeholders (i.e. employees, local community, and society at
large) through charitable donations and organizational support. These corporate
decisions are entirely voluntary, of less importance than the former three, and (with
regards to social responsibility) only seen as desired by society.(Crane& Matten, 2004).

Standards of Corporate Social Responsibility Implementation:

36

The framework of applying social responsibility follows the implementation of Deming

principle in comprehensive quality management, which is based on the following four
stages: plan, do, Check, Act.
It is important that the administrative system responsible for corporate social
responsibility comprises a systematic framework that is continuously observed and
regularly revised, to provide effective guidance for the enterprises management as a
response to internal and external changes. Such framework shall include the following
stages:

First Stage: Plan

This means setting a continuous planning process which is based on the actual needs of
the community, previously conducted by the enterprise to determine the companys
policy and approaches concerning the adoption of societal approach of social
responsibility, the factors related to it, and the accompanying effects on society. This
shall also include determining and revising administrative and/or legal requirements, in
addition to other requirements endorsed or signed by the enterprise, as well as setting
internal performance standards.

The planning process also includes setting a program to realize the enterprises
objectives within the framework of social responsibility (action plans), that addresses
roles, responsibilities, resources, timeframes, priorities, and procedures required to
realize objectives, in addition to performance measurement indicators to enable the
enterprise to follow up and assess the level of objective realization.

Second Stage: Implementing (DO)

This refers to setting social responsibility goals and objectives, and drafting plans and
programs purposed for realizing such goals and objectives through building and
developing administrative structures directly connected with implementing social
responsibility plans, determining roles and responsibilities along with delegating

37

powers, providing resources, and training employees to guarantee raising their

awareness on social responsibility.
Action plans for social responsibility must be designed or amended in a manner that
guarantees systematic intertwining with other corporate regulations, so that they
effectively conform to and integrate with current management regulations. Such
integration will help the enterprise to create balance, and find solutions for possible
overlaps, whether internally, at the enterprises operations level, or externally, at the
communication and activities execution priorities level. The elements of the managerial
system which benefit from such integration include the following:

Corporate policies.

Allocation of resources.

Documentation and monitoring, or controls with respect to operations.

Support and information systems.

Training and awareness.

Organizational structure and responsibilities.

Assessment and reward systems.

Audit processes.

Communications and reporting.

The management, on the other hand, should facilitate the provision of proper resources.
This can be achieved through executing and implementing social responsibility action
plans, and exerting necessary effort to make them available in a timely and efficient
manner, while taking into consideration the following:

Infrastructure.

38

Information systems or technologies.

Training.

Technology.

Financial and human resources, and other enterprise-related resources.

Third Stage: Studding (Check)

The effective performance related to social responsibility depends on close studying and
assessment, besides revising activities undertaken, the advancement achieved, and the
realization of set objectives, utilized resources, and other efforts exerted by the
enterprise. The aim of continuous monitoring, checking, or observance of activities of
social responsibility is basically to make sure that activities are done as previously
decided.

The enterprise should plan the manner according to which it will measure the extent of
realizing targeted objectives concerning the activities, and the operational plans which
are purposed for social responsibility, and which complement its corporate objectives,
through agreeing on special performance indicators, and defining the entity/individuals
responsible for the measurement process, taking into consideration documenting the
recommendations on justifying deviations, and including the same with reports.
In addition to revising current activities, enterprises should also be aware of changeable
conditions or legal or legislative expectations and developments which affect social
responsibility, besides available opportunities, to strengthen its efforts concerning social
responsibility. Major partners may be assigned a valuable role in such revisions, since
the information provided by relevant parties give explanations to the enterprise, while
major partners can maintain the enterprises compliance with changes in expectations
and attitudes of the larger community.

Fourth Stage: Continuous Improvement (ACT)

39

Based on periodic revisions, the enterprise should take into consideration the means
which should enable it to improve its performance concerning the social responsibility.
The findings of such revisions should be used to assist in realizing a continuous
improvement in corporate social responsibility. These improvements may comprise
amending objectives to reflect changing conditions, or aspirations for more
achievements.

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Chapter 3
Corporate social responsibility in Bank

3.1 introduction of corporate social responsibility in bank

3.2 corporate social responsibilities in India
3.3 Four phases of corporate social responsibility development in India
3.4 current state of corporate social responsibility in bank
3.5 Role of corporate social responsibility banking sector
3.6 corporate social responsibility practices
3.7 impact of corporate social responsibility in bank

41

Introduction of CSR in bank

Corporate Social Responsibility (CSR) in banks has become a worldwide demand. Now
a day, by recognizing CSR, banks from all over the world endorse programs of
educational, cultural, and environmental, as well as health initiatives. Besides, they
implement sponsorship actions towards vulnerable groups and charitable non-profit
organizations (Persephone Polychronidou et al., 2013). As a matter of fact, many
studies have explored the status of CSR in banks. Besides, the areas of CSR drivers,
impacts, and practice are relatively well researched topics. However, other issues of
CSR barrier, CSR models in the bank and successful factors in banking sectors are still
poorly indicated; thus, there is a strong need for more research on the important issues.

CSR in India
CSR in India has traditionally been seen as a philanthropic activity. And in keeping with
the Indian tradition, it was an activity that was performed but not deliberated. As a
result, there is limited documentation on specific activities related to this concept.
However, what was clearly evident that much of this had a national character
encapsulated within it, whether it was endowing institutions to actively participating in
Indias freedom movement, and embedded in the idea of trusteeship. As some observers
have pointed out, the practice of CSR in India still remains within the philanthropic
space, but has moved from institutional building (educational, research and cultural) to
community development through various projects. Also, with global influences and
with communities becoming more active and demanding, there appears to be a
discernible trend, that while CSR remains largely restricted to community development,
it is getting more strategic in nature (that is, getting linked with business) than
philanthropic, and a large number of companies are reporting the activities they are
undertaking in this space in their official websites, annual reports, sustainability reports
and even publishing CSR reports.
The Companies Act, 2013 has introduced the idea of CSR to the forefront and through
its disclose-or-explain mandate, is promoting greater transparency and disclosure.
Schedule VII of the Act, which lists out the CSR activities, suggests communities to be
the focal point. On the other hand, by discussing a companys relationship to its
stakeholders and integrating CSR into its core operations, the draft rules suggest that
42

CSR needs to go beyond communities and beyond the concept of philanthropy. It will
be interesting to observe the ways in which this will translate into action at the ground
level, and how the understanding of CSR is set to undergo a change.
Implementations of Corporate Social Responsibility

The Four Phases of CSR Development in India

The history of CSR in India has its four phases which run parallel to India's historical
development and has resulted in different approaches towards CSR. However the
phases are not static and the features of each phase may overlap other phases.

The First Phase

In the first phase charity and philanthropy were the main drivers of CSR. Culture,
religion, family values and tradition and industrialization had an influential effect on
CSR. In the pre-industrialization period, which lasted till 1850, wealthy merchants
shared a part of their wealth with the wider society by way of setting up temples for a
religious cause. Moreover, these merchants helped the society in getting over phases of
famine and epidemics by providing food from their god owns and money and thus
securing an integral position in the society. With the arrival of colonial rule in India
from the 1850s onwards, the approach towards CSR changed. The industrial families of
the 19th century such as Tata, Godrej, Bajaj, Modi, Birla, and Singhania were strongly
inclined towards economic as well as social considerations. However it has been
observed that their efforts towards social as well as industrial development were not
only driven by selfless and religious motives but also influenced by caste groups and
political objectives. Or studies

The Second Phase

In the second phase, during the independence movement, there was increased stress on
Indian Industrialists to demonstrate their dedication towards the progress of the society.
This was when Mahatma Gandhi introduced the notion of "trusteeship", according to
which the industry leaders had to manage their wealth so as to benefit the common man.
"I desire to end capitalism almost, if not quite, as much as the most advanced socialist.
But our methods differ. My theory of trusteeship is no make-shift, certainly no
camouflage. I am confident that it will survive all other theories." This was Gandhi's
43

words which highlights his argument towards his concept of "trusteeship". Gandhi's
influence put pressure on various Industrialists to act towards building the nation and
their socio-economic development. According to Gandhi, Indian companies were
supposed to be the "temples of modern India". Under his influence businesses
established trusts for schools and colleges and also helped in setting up training and
scientific institutions. The operations of the trusts were largely in line with Gandhi's
reforms which sought to abolish untouchability, encourage empowerment of women
and rural development.

The Third Phase

The third phase of CSR (196080) had its relation to the element of "mixed economy",
emergence of Public Sector Undertakings (PSUs) and laws relating labour and
environmental standards. During this period the private sector was forced to take a
backseat. The public sector was seen as the prime mover of development. Because of
the stringent legal rules and regulations surrounding the activities of the private sector,
the period was described as an "era of command and control". The policy of industrial
licensing, high taxes and restrictions on the private sector led to corporate malpractices.
This led to enactment of legislation regarding corporate governance, labour and
environmental issues. PSUs were set up by the state to ensure suitable distribution of
resources (wealth, food etc.) to the needy. However the public sector was effective only
to a certain limited extent. This led to shift of expectation from the public to the private
sector and their active involvement in the socio-economic development of the country
became absolutely necessary. In 1965 Indian academicians, politicians and businessmen
set up a national workshop on CSR aimed at reconciliation. They emphasized upon
transparency, social accountability and regular stakeholder dialogues. In spite of such
attempts the CSR failed to catch steam.

The Fourth Phase

In the fourth phase (1980 - 2013) Indian companies started abandoning their traditional
engagement with CSR and integrated it into a sustainable business strategy. In the
1990s the first initiation towards globalization and economic liberalization were
undertaken. Controls and licensing system were partly done away with which gave a
boost to the economy the signs of which are very evident today. Increased growth
momentum of the economy helped Indian companies grow rapidly and this made them
44

more willing {Gajare, R.S. (2014). A conceptual study of CSR development in India. In
D.B. Patil & D.D. Bhakkad, Redefining Management Practices and Marketing in
Modern Age Dhule, India: Atharva Publications (p. 152-154).} And able to contribute
towards social cause. Globalization has transformed India into an important destination
in terms of production and manufacturing bases of TNCs are concerned. As Western
markets are becoming more and more concerned about labour and environmental
standards in the developing countries, Indian companies which export and produce
goods for the developed world need to pay a close attention to compliance with the
international standards.

Current State of CSR in India

As discussed above, CSR is not a new concept in India. Ever since their inception,
corporate like the Tata Group, the Aditya Birla Group, and Indian Oil Corporation, to
name a few have been involved in serving the community. Through donations and
charity events, many other organizations have been doing their part for the society. The
basic objective of CSR in these days is to maximize the company's overall impact on
the society and stakeholders. CSR policies, practices and programs are being
comprehensively integrated by an increasing number of companies throughout their
business operations and processes. A growing number of corporate feel that CSR is not
just another form of indirect expense but is important for protecting the goodwill and
reputation, defending attacks and increasing business competitiveness.
Companies have specialised CSR teams that formulate policies, strategies and goals for
their CSR programs and set aside budgets to fund them. These programs are often
determined by social philosophy which have clear objectives and are well defined and
are aligned with the mainstream business. The programs are put into practice by the
employees who are crucial to this process. CSR programs ranges from community
development to development in education, environment and healthcare etc.
For example, a more comprehensive method of development is adopted by some
corporations such as Bharat Petroleum Corporation Limited, Maruti Suzuki India
Limited. Provision of improved medical and sanitation facilities, building schools and
houses, and empowering the villagers and in process making them more self-reliant by
providing vocational training and a knowledge of business operations are the facilities
45

that these corporations focus on. Many of the companies are helping other peoples by
providing them good standard of living.
Also, corporate increasingly join hands with non-governmental organizations (NGOs)
and use their expertise in devising programs which address wider social problems.
CSR has gone through many phases in India. The ability to make a significant
difference in the society and improve the overall quality of life has clearly been proven
by the corporate. Not one but all corporate should try and bring about a change in the
current social situation in India in order to have an effective and lasting solution to the
social woes. Partnerships between companies, NGOs and the government should be
facilitated so that a combination of their skills such as expertise, strategic thinking,
manpower and money to initiate extensive social change will put the socio-economic
development of India on a fast track.

Role of Indian banking sector:

Banking in India in modern sense has originated in the last decades of the 18th century.
In the year 1969 there was a revolution in Indian Banking Sector.14 private banks were
nationalized in 1969 on 19th July by the then Central Government head by Prime
Minister Smt. Indira Gandhi. In 1955, State Bank of India was nationalized. The main
Moto of nationalization was to provide better quality service to the customers. Again in
the year 1980 another 7 private banks were nationalized. The need for the
nationalization was felt mainly because private commercial banks were not fulfilling
the social and developmental goals of banking which are so essential for any
industrializing country. Mainly the Indian Banking sector is made up 2 types of Banks.
One is commercial banks another is cooperatives banks. Commercial banks include
PSUs Banks, Private sector Banks, Foreign Banks, and Regional Rural Banks.
Cooperatives Banks include urban cooperatives and State cooperatives Banks. The main
aim of banks is to profit maximization but now a days situation has been changed. The
aim changed from profit maximization to do more and more CSR activities.
National Bank Financial Group is deeply engaged in creating the greatest possible
value not only for investors, but also for its employees, clients and the communities
where it is present. In this sense, CSR is a fundamental value. In all our sectors of
46

activityand whatever the business contextwe work to integrate the social dimension,
ethics and the environment with economic considerations so that we can continue to be
a powerful engine of social and economic development. Among the measures which are
employed, allow us to fulfil our responsibilities with respect to the community, are
rigorous fundraising, donation and sponsorship programs organized by strongly
committed teams of volunteer employees and retirees. Over the past few years, the
concept of CSR has been changing. There has been an apparent transition from giving
as an obligation or charity to giving as a strategy or responsibility. Like private banks,
nationalized banks are not profit oriented. They gave more emphasis on CSR rather
making profit.

CSR practices
Nowadays, CSR practices differ from country to country (Adams, Hill & Roberts,
1998) and between developed and developing countries (Imam, 2000). Banks
increasingly recognize CRS. Thus, it promotes bank to endorse CSR strategies focusing
on four main aspects including Environment, Society, Marketplace and Workplace. All
of CRS sponsorship actions from bank are towards vulnerable groups and charitable
non-profit organizations.
First, Environment implementation is the most vital strategy that bank can apply in the
CSR program (Hart, 1997; Levy & Egan, 2003). Because banks themselves naturally do
not produce hazardous chemicals or discharge toxic pollutants into the environment,
they do not appear to be involved with environmental issues. Besides, although it is the
banks duty to repay environment, there are many banks using recycling electrical and
electronic equipment for environmental protection (Persephone Polychronidou et al.,
2013). Besides, through their lending practices, banks are inextricably connected to
commercial activity that degrades the natural environment. In brief, it is important that
the banking sector in every country be aware of its environmental and social
responsibilities (Gokce Akdemir Omur et al., 2012).
Second, banks contribute to the development of Society in CSR program. It is true that
banks are paying more to their CSR activities but not so much as their earnings
increases. Involvement of the Euro bank on Education, Culture, Sport is the corner
47

stone of social contribution since its inception until today (Euro bank EFG, 2012).
Common CSR practices in the banking sector by different organization are cantered on
mainly poverty alleviation, healthcare, education, charity activities, cultural enrichment,
youth development, women empowerment, patronizing sports and music, etc. especially
in developing countries like Bangladesh (Alam Shafiul, et. al., 2010). For example,
Grameen Bank provided micro-credit cards for 6, 6 million people in which 97% is the
poor in Bangladesh. Moreover, working with charities driven bank's contribution in the
program "Child, Family and Health" is a strategic choice for targeted social
interventions in Greek. This contribution is well known through the "special green
loans" that are issued (Piraeus Bank, 2012). Contribution made to scholarships for
academic purposes are in the form of grants to universities, salaries, bursaries, and loans
are one of the activities that the bank implements in Zimbabwe (Masuku Caven, 2000).
Third, CSR programs related to Market place is an effective way in the banking sector
in order to improver putation and financial performance with partners (Frenkel & Scott,
2002). Many banks want to work in the Green financial markets,' which ranges from
environmental risk management in the banking and insurance sector. The aims of this
program are creating positive environmental venture capital and private equity fund,
environmental risk management, environmental screening in fund management and
project finance (Jane Nelson and Dave Prescott, 2003). In order to achieve this goal,
banks focus on the responsibility in investment (Kurtz, 2008) and accountability
(KPMG, 2005). Particularly, National bank offered in the field of renewable energy
through the investment programs (National Bank, 2012).
Finally, Work place is the aspect that a bank wants to focus on when implementing
CSR activities due to the important role of employee. If banks want to attract high
quality human resources and increase employee productivity, they have to improve their
work place (Bhattacharya, Sen, Korschun, 2008;Muthuri, Matten, & Moon, 2009).
Banks normally recognized that human rights of the employees are placed beyond the
scope of labor rights. The CSR principles focusing on the marketplace are incorporated
into all policies and procedures implemented by the bank (Emporiki Bank, 2012).
Therefore, the bank will have a clean and effective workplace that can make equality
among employees.

Impacts of CSR on banks

48

The bank attitude towards current problems of society related culture and environment
(Persefoni Polychronidou et al., 2013) become more and more recognized by bank
clients. As a result, banks are recently motivated by goals other than profit, revenue, and
market share because this alternative inspiration can be better both for the society and
the bank itself. The company engaging in CSR will indirectly gain competitive
advantage in the market place through reduction or elimination of government imposed
fines (Belkaoui, 1976; Bragdon & Marlin, 1972; Freedman & Stagliano, 1991; Shane &
Spicer, 1983) and product differentiation (McWilliams& Siegel, 2001; Waddock &
Graves, 1997). At the same time, it can minimize its overall companys exposure to risk
(Godfrey, 2004). Besides, CRS positively affects present value of the firms cash flows
(McWilliams & Siegel, 2001; Waddock & Graves, 1997; Godfrey, 2004).
CSR initiatives are also likely to improve employee morale that leads to higher
productivity, improved performance (McGuire et al., 1988), and fewer labor problems
(L.Zu 2009). Besides those benefits, CRS also has a positive influence on banks, which
can be analyzed in two key relationships of CSR and financial performances and bank
reputation.
There has been significant and interest in the relationship between a firms CSR
initiatives and Corporate Financial Performance (CFP) in recent years. According to
Margolis and Walsh, 2003, 122 published studies have been conducted to empirical
measures the relationship between CSR and CFP during the period 1971 2001.
Theoretically, the studies can be divided into three groups: positive relationship,
negative relationship, neutral relationship (Theofanis Karagiorgos, 2010). However,
after review all relevant studies we can conclude that most research results show a
positive impact on financial performance (Orlitzky, 2003; Theofanis Karagiorgos,
2010).
Positive relationship implies that CSR improves firms value. Researches of Bass et al.
(1997); Sarre et al. (2001) and Deckop et al. (2006) indicated that the quality of CSR in
banks might go a long way towards reducing the risk associated with financial
institutions that lead to improve financial performance. Therefore, a diversity of CSR
activities are not only engaged by bank but also financial institutions (Scholtens, 2009;
Orlitzky M., Schmidt, F.L., Rynes, S.L, 2003). On the contrary, the overall CSR
measure has a negative effect on stock returns, so does CFP. By evaluating each social
49

performance indicator, Brammer et al. (2006) proves that the measure of employee
performance has significantly negative effect on stock returns. By comparison, while
community measure has positive but not little effect environment is the measure that
has negative and no significance impact on stock returns.
Discussing the neutral relationship between CSR and CFP, Fauzi (2009); Mahoney and
Roberts (2007); Goukasian and Whitney (2008); and Folger and Nutt (1975)
emphasizes that there is no significant correlation found between stock price and CSR
parameters. The other reason is the problem of measuring CSP and pure marketing
strategy (DArcimoles and Trebucq, 2002). Moreover, those which found neutral
relationship suggested that there were many factors preventing researchers from secure
results (Kang et al., 2010).
Although there have been a fierce debate about this relationship, most of the studies
have shown that CSR increases the financial performance in banking sector (Theofanis
Karagiorgos, 2010).
Reputation that is in a relationship in CSR also deserves many studies. CSR is an
important reputational driver and can create economic value over time. Stock markets
will not value positively charitable and unpublicized contributions by a bank if they do
not affect firms reputation (Van Dijken, 2007; Hillenbrand and Money, 2007).
Nevertheless, several key research areas of CSR and bank reputation have remained
under-explored and existing studies point out the need for further investigations. It is
interesting to note that during financial crisis several banks get involved in reputational
crisis (Gabbi et al., 2009; Uslaner, 2010). Indeed, the comparative analyses of wellknown cases have highlighted the importance of CSR in managing of such crisis,
suggestion looking into the relationship between CSR and corporate reputation. It
should be eventually noted that the most important thing to bank is to increase
reputation because the banks want to receive trust from customers and stakeholders.
Thus, CSR is one of the main strategies for bank to achieve the goal of maximizing
profit.

50

Chapter 4

51

52

Bank of Baroda
4.1 Meaning of Bank of Baroda
4.2 History of Bank of Baroda
4.3 Rewards of Bank of Baroda
4.4 Subsidiaries
4.5 Intemational Presence

53

Meaning of bank of Baroda

Bank of Baroda is an Indian state-owned banking and financial services company
headquartered in Vadodara (earlier known as Baroda) in Gujarat, India. It is the second
largest bank in India, next to State Bank of India. Its headquarters is in Vadodara, it has
a corporate office in the Bandra Kurla Complex in Mumbai. Bank of Baroda is one of
the Big Four banks of India, along with ICICI Bank, State Bank of India and Punjab
National Bank.
Based on 2014 data, it is ranked 801 on Forbes Global 2000 list. BoB has total assets in
excess of 3.58 trillion, a network of 5326 branches in India and abroad, and over
8000 ATMs.
The bank was founded by the Maharaja of Baroda, Maharaja Sayajirao Gaekwad III on
20 July 1908 in the Princely State of Baroda, in Gujarat. The bank, along with 13 other
major commercial banks of India, was nationalised on 19 July 1969, by the Government
of India and has been designated as a profit-making public sector undertaking (PSU).
In 2015, Bank of Baroda officials recently stumbled upon illegal transfers of a
whopping Rs 6,172 crores in foreign exchange, made to Hong Kong through newly
opened accounts in the bank's Ashok Vihar branch.

History of bank of Baroda

19081959

54

Maharaja Sayajirao Gaekwad III, the founder of Bank of Baroda

55

In 1908, Maharaja Sayajirao Gaekwad III, set up the Bank of Baroda (BoB),[1] with
other stalwarts of industry such as Sampatrao Gaekwad, Ralph Whitenack, Vithaldas
Thakersey, Tulsidas Kilachand and NM Chokshi. Two years later, BoB established its
first branch in Ahmadabad. The bank grew domestically until after World War II. Then
in 1953 it crossed the Indian Ocean to serve the communities of Indians in
Kenya and Indians in Uganda by establishing a branch each in Mombasa and Kampala.
The next year it opened a second branch in Kenya, in Nairobi, and in 1956 it opened a
branch in Tanzania at Dar-es-Salaam. Then in 1957 BoB took a giant step abroad by
establishing a branch in London. London was the center of the British Commonwealth
and the most important international banking center. In 1958 BoB acquired Hind Bank
(Calcutta; est. 1943), which became BoB's first domestic acquisition.
1960s
In 1961, BoB merged in New Citizen Bank of India. This merger helped it increase its
branch network in Maharashtra. BoB also opened a branch in Fiji. The next year it
opened a branch in Mauritius. Bank of Baroda In 1963, BoB acquired Surat Banking
Corporation in Surat, Gujarat. The next year BoB acquired two banks: Umbergaon
Peoples Bank in southern Gujarat and Tamil Nadu Central Bank in Tamil Nadu state.
In 1965, BoB opened a branch in Guyana. That same year BoB lost its branch
in Narayanganj (East Pakistan) due to the Indo-Pakistani War of 1965. It is unclear
when BoB had opened the branch. In 1967 it suffered a second loss of branches when
the Tanzanian government nationalised BoBs three branches there at (Dar es
Salaam, Mwanga, and Moshi), and transferred their operations to the Tanzanian
government-owned National Banking Corporation.
In 1969, the Indian government nationalised 14 top banks including BoB. BoB
incorporated its operations in Uganda as a 51% subsidiary, with the government owning
the rest.
1970s
In 1972, BoB acquired Bank of India's operations in Uganda. Two years later, BoB
opened a branch each in Dubai and Abu Dhabi.

56

Back in India, in 1975, BoB acquired the majority shareholding and management
control of Bareilly Corporation Bank (est. 1928) and Nainital Bank (est. in 1954), both
in Uttar Pradesh. Since then, Nainital Bank has expanded to Uttarakhand state.
International expansion continued in 1976 with the opening of a branch in Oman and
another in Brussels. The Brussels branch was aimed at Indian firms
from Mumbai (Bombay) engaged in diamond cutting and jewellery having business
in Antwerp, a major center for diamond cutting.
Two years later, BoB opened a branch in New York and another in the Seychelles. Then
in 1979, BoB opened a branch in Nassau, the Bahamas.
1980s
In 1980, BoB opened a branch in Bahrain and a representative office in Sydney,
Australia. BoB, Union Bank of India and Indian Bank established IUB International
Finance, a licensed deposit taker, in Hong Kong. Each of the three banks took an equal
share. Eventually (in 1999), BoB would buy out its partners.
A second consortium or joint-venture bank followed in 1985. BoB (20%), Bank of
India (20%), Central Bank of India (20%) and ZIMCO (Zambian government; 40%)
established in do-Zambia Bank in Lusaka. That same year BoB also opened an Offshore
Banking Unit (OBU) in Bahrain.
Back in India, in 1988, BoB acquired Traders Bank, which had a network of 34
branches in Delhi.
1990s
In 1992, BoB opened an OBU in Mauritius, but closed its representative office in
Sydney. The next year BoB took over the London branches of Union Bank of
India and Punjab & Sind Bank (P&S). P&Ss branch had been established before 1970
and Union Banks after 1980. The Reserve Bank of India ordered the takeover of the
two following the banks' involvement in the Sethia fraud in 1987 and subsequent losses.

57

Then in 1992 BoB incorporated its operations in Kenya into a local subsidiary. The next
year, BoB closed its OBU in Bahrain.
In 1996, BoB Bank entered the capital market in December with an Initial Public
Offering (IPO). The Government of India is still the largest shareholder, owning 66% of
the bank's equity.
In 1997, BoB opened a branch in Durban. The next year BoB bought out its partners in
IUB International Finance in Hong Kong. Apparently this was a response to regulatory
changes following Hong Kongs reversion to the Peoples Republic of China. The now
wholly owned subsidiary became Bank of Baroda (Hong Kong), a restricted license
bank. BoB also acquired Punjab Cooperative Bank in a rescue. BoB incorporate wholly
owned subsidiary BOB Capital Markets Ltd for broking business.
In 1999, BoB merged in Bareilly Corporation Bank in another rescue. At the time,
Bareilly had 64 branches, including four in Delhi. In Guyana, BoB incorporated its
branch as a subsidiary, Bank of Baroda Guyana. BoB added a branch in Mauritius and
closed its Harrow Branch in London.
2000s
In 2000 BoB established Bank of Baroda (Botswana). The bank has three banking
offices, two in Gaborone and one in Francistown. In 2002, BoB converted its subsidiary
in Hong Kong from deposit taking company to a Restricted License Bank.
In 2002 BoB acquired Benares State Bank (BSB) at the Reserve Bank of Indias
request. BSB was established in 1946 but traced its origins back to 1871 and its
function as the treasury office of the Benares state. In 1964, BSB had acquired Bareilly
Bank (est. 1934), with seven branches in western districts of Uttar Pradesh; BSB also
had taken over Luck now Bank in 1968. The acquisition of BSB brought BoB 105 new
branches. Luck now Bank, a unit bank with its only office in Aminabad, had been
established in 1913. Also in 2002, BoB listed Bank of Baroda (Uganda) on the Uganda
Securities Exchange (USE). The next year BoB opened an OBU in Mumbai.

58

In 2004 BoB acquired the failed Gujarat Local Area Bank. BoB also returned to
Tanzania by establishing a subsidiary in Dar-es-Salaam. BoB also opened a
representative office each in Kuala Lumpur, Malaysia, and Guangdong, China.

2005: BoB built a Global Data Centre (DC) in Mumbai for running its
centralised banking solution (CBS) and other applications in more than 1,900
branches across India and 20 other counties where the bank operates. BoB also
opened a representative office in Thailand.

2006: BoB established an Offshore Banking Unit (OBU) in Singapore.

2007: In its centenary year, BoBs total business crossed 2.09 trillion (short
scale), its branches crossed 2000, and its global customer base 29 million people. In
Hong Kong, Bank got Full Fledged Banking license and business of its Restricted
License Banking subsidiary was taken over Bank of Baroda branch in Hong Kong
w.e.f.01.04.2007.

2008: BoB opened a branch in Guangzhou, China (02/08/2008) and in Kenton,

Harrow United Kingdom. BoB opened a joint venture life insurance company
with Bank and Legal and General (UK) called India First Life Insurance Company.

2010s
In 2010, Malaysia awarded a commercial banking licence to a locally incorporated bank
to be jointly owned by Bank of Baroda, Indian Overseas Bank and Andhra Bank. That
same year, BoB also opened a branch in New Zealand.
In 2011, BoB opened an Electronic Banking Service Unit (EBSU) was opened at
Hamriya Free Zone, Sharjah (UAE). It also opened four new branches in existing
operations in Uganda, Kenya (2), and Guyana. BoB closed its representative office in
Malaysia in anticipation of the opening of its consortium bank there. BoB received 'In
Principle' approval for the upgrading of its representative office in Australia to a branch.
The Malaysian consortium bank, India International Bank Malaysia (IIBM), finally
opened in Kuala Lumpur, which has a large population of Indians. BOB owns 40%,
Andhra Bank owns 25%, and IOB the remaining 35% of the share capital. IIBM seeks
59

to open five branches within its first year of operations in Malaysia, and intends to grow
to 15 branches within the next three years.

Rewards of Bank of Baroda

Bank of Baroda Cards Limited Donated For Activity for 2015-16
Shri A R Chowfin, managing director, Bobcards limited (wholly owned subsidiary
of Bank of Baroda) is handing over cheques of Rs. 7.50 lacs to shri devendra
fadnavis, honble Chief minister of Maharashtra, towards Corporate Social
Responsibility (CSR) activities.

Bank of Baroda cards (wholly owned subsidiary of Bank of Baroda), as a

part of its Corporate Social Responsibility (CSR), donated Rs. 7,50,000/(Rupee Seven Lac Fifty Thousand Only) to The Maharashtra Chief
ministers Relief Fund on 22.03.2016.

60

Subsidiaries
BOB Capital Markets (BOBCAPS) is a SEBI-registered investment banking company
based in Mumbai, Maharashtra. It is a wholly owned subsidiary of Bank of Baroda. Its
financial services portfolio includes initial public offerings, private placement of debts,
corporate restructuring, business valuation, mergers and acquisition, project
appraisal, loan syndication, institutional equity research, and brokerage.
Bob cards Ltd is a credit card company, 100% subsidiary of Bank of Baroda. The
company is in the business of Credit cards, Acquiring Business & back end support for
Debit cards operations to Bank of Baroda. Bank of Baroda had introduced its first
charged card named BOBCARD in the year 1984. The whole operation of this plastic
card was managed by Credit card division of Bank of Baroda. It established a wholly
owned subsidiary, Bobcards Limited in the year 1994 to cater to the need of rapidly
growing credit card industry in a focused manner. BOBCARDS Ltd is the first Nonbanking company in India issuing credit cards

International presence
In its international expansion, the Bank of Baroda followed the Indian diaspora,
especially that of Gujaratis. The Bank has 106 branches/offices in 24 countries
including 61 branches/offices of the bank, 38 branches of its 8 subsidiaries and 1
representative office in Thailand. The Bank of Baroda has a joint venture in Zambia
with 16 branches.
Among the Bank of Barodas overseas branches are ones in the worlds major financial
centres (e.g., New York, London, Dubai, Hong Kong, Brussels and Singapore), as well
as a number in other countries. The bank is engaged in retail banking via the branches
of subsidiaries in Botswana, Guyana, Kenya, Tanzania, and Uganda. The bank plans has
recently upgraded its representative office in Australia to a branch and set up a joint
venture commercial bank in Malaysia. It has a large presence in Mauritius with about
nine branches spread out in the country.
The Bank of Baroda has received permission or in-principle approval from host country
regulators to open new offices in Trinidad and Tobago and Ghana, where it seeks to
61

establish joint ventures or subsidiaries. The bank has received Reserve Bank of
India approval to open offices in the Maldives, and New Zealand. It is seeking approval
for operations in Bahrain, South Africa, Kuwait, Mozambique, and Qatar, and is
establishing offices in Canada, New Zealand, Sri Lanka, Bahrain, Saudi Arabia, and
Russia. It also has plans to extend its existing operations in the United Kingdom, the
United Arab Emirates, and Botswana.
The tagline of Bank of Baroda is "India's International Bank".

Chapter 5
Corporate social responsibility in bank of Baroda

62

5.1 Corporate social responsibility practices in bank of Baroda

5.2 corporate social responsibility activities on bank of Baroda
5.3 corporate social responsibility initiatives
5.4 corporate social responsibility policy in bank of Baroda

CSR practices in bank of Baroda

Now-a-days CSR has been assuming greater importance in the corporate world
including financial institutions and banking sector. Banks and other financial
institutions start promoting environment friendly and socially responsible lending and
investment practices.RBI (2007) has also directed Indian banks to undertake

63

CSR initiatives for sustainable development and also asked banks to begin nonfinancial reporting which is related to activities in the era of environmental, social and
economic accounting.
It has been observed from karmayogs CSR ratings that most of the Indian public
sector banks do not mention recent CSR activities on their annual reports or on the
websites. The financial institutions do not take adequate steps for updating the recent
activities in CSR .CSR has been assuming greater importance in the corporate world,
including the banking sector. To highlight the role of banks in CSR, the RBI circulated a
notice on December 20, 2007 for all the scheduled commercial banks in India.
Recently financial institutions adopt an integrated approach between customer
satisfaction and CSR in a broader way. RBI also instructs the banks to integrate their
business operation along with social and environmental aspects. The major key areas of
CSR like, children welfare, community welfare, education, environment, healthcare,
poverty eradication, rural development, vocational training, women empowerment,
protection to girl child, and employment have been discussed in.

Environment

Rural Development

Children And Women

Main categaries of csr

practices

Education

Social Community Waifare

Health

64

Education:
Bank of Baroda has been giving donations for the following purposes for the spread of
education including for the girl child and womenfolk in remote villages. To reputed
colleges/public schools and other similar institutions

Environment:
Bank of Baroda formulated various area-specific schemes tailor-made to the needs of
local requirements, particularly where there is a concentration of industries like Rice
Mills, Cold storages, Poultry units, etc. The suitable concessions in rate of interest,
charges were allowed under these schemes to garner maximum business out smarting
competition. As many as 18 area-specific schemes were formulated to increase the
agricultural lending and also the bank made donation in the field of Adoption of gardens
in cities where the Banks name can be publicized.

Health:
Bank of Baroda Vaccination projects for controlling spread of diseases/epidemics
Providing support to organizations extending support to handicapped persons like
blind, lame, deaf and dumb, etc or suffering from any other disabilities During the
Financial Year FY13, the Bank disbursed donations amounting to Rs.699.74 lakh to
various organizations engaged in the field of education, health, women welfare etc.

Rural Development:
Bank of Baroda has always believed in making a difference to society at large. As a
responsible corporate citizen, it has been its vision to empower the community through
socio-economic development of underprivileged and weaker sections. Most of the
Banks social activities are linked to rural masses, i.e., adoption of101 villages across
India for their all-around development and providing financial assistance for
development of infrastructure facilities like setting up village libraries, community hall
and solar lighting systems in villages. The Bank had adopted 500 villages for 100%
65

Financial Inclusion, and this has already been achieved in all 500 villages. The Bank
formulated various area-specific schemes tailor-made to the needs of local
requirements, particularly where there is a concentration of industries like Rice Mills,
Cold
Storages, Poultry units, etc.

Children & Women:

Bank of Baroda during the Financial Year FY13, your Bank disbursed donations
amounting to Rs.699.74 lakh to various organizations engaged in the field of education,
health, women welfare etc. The Bank coordinates its CSR activities with its Microfinance and Self-Help Group (SHG) financing. The Bank has developed relationships
with 91,536 SHG and has extended credit facilities of Rs 636.00 crore through SHGs,
whereby million of households have been beneficiaries of financial inclusion.

Social Community Welfare:

Bank of Baroda has been giving donations for the following purposes: For the spread of
education including for the girl child and womenfolk in remote villages. To reputed
colleges/public schools and other similar institutions. To reputed hospitals engaged in
charity or in service of weaker sections Assisting families of soldiers died in wars and
handicapped soldiers, Old age homes, Preservation of places of historical interest like
gardens, forts, temples etc. Promotion of efforts for protection, conservation and
cleaning of environment including plantation/re-plantation, rivers, lakes, forests,
sanctuaries etc, Adoption of gardens in cities where the Banks name can be publicized,
Family planning activities. For promoting the promotion and use of non exhaustible
sources of energy like solar power, goober gas plants in rural areas, Vaccination projects
for controlling spread of diseases/ epidemics, Providing support to organizations
extending support to handicapped persons like blind, lame, deaf and dumb, etc.

66

CSR Activities in bank of Baroda

Name of the bank: bank of Baroda
CSR areas: Community welfare poverty eradication physically challenged rural
Development vocational training women

3main CSR activity: rural development womens empowerment vocational training

CSR budget: Not disclosed

Corporate Social Responsibility (CSR) Initiatives

Bank has always upheld inclusive growth high on its agenda. Bank has established 36
Baroda Swarojgar Vikas Sansthan (Baroda R-SETI) for imparting training to
unemployed youth, free of cost for gainful self employment & entrepreneurship skill
development and 52 Baroda Gramin Paramarsh Kendra and for knowledge sharing,
problem solving and credit counseling for rural masses across the country, as on
31.03.2011. Bank has also established 18 Financial Literacy and Credit Counselling
Centres (FLCC) in order to spread awareness among the rural masses on various
financial and banking services and to speed up the process of Financial Inclusion, as on
31.03.2011.

Corporate Social Responsibility Policy in bank of Baroda

A. Philosophy
As a conscientious corporate citizen, BOB Capital Markets Limited (BOBCAPS)
recognises its role and responsibility to address some of countrys most pressing
challenges relating to education, health, equality and access to various facilities for a
decent living of mankind.

67

We are committed to enable people and technology to drive innovation,

disseminate knowledge, and create shared value to improve lives .This is our corporate
social responsibility philosophy (CSR).
Our CSR is strongly connected with the principles of sustainability; an
organization should make decisions based not only on financial factors, but also
considering the social and environmental consequences. As a corporate citizen
receiving various benefits out of society, it is our coextensive responsibility to pay back
in return to the society in terms of helping needy people by providing foods, clothes,
etc., keeping the environment clean and safe for the society by adhering to the best
industrial practices and adopting best technologies, , and so on. It is the Companys
intent to make a positive contribution to the society in which the Company operates.
Being a responsible corporate citizen and belonging to a well-known group in the
country and internationally, BOBCAPS aims to lead the path not only through products
and services, but also via sustainability and CSR initiatives.
The need to engage in responsible practices is led by an intense desire to
contribute positively towards the three pillars of sustainability and CSR Social,
Economic and Environmental. These three pillars are integral to BOBCAPS businesses
that which clearly reflect its commitment, not only to the direct stakeholders but also to
the society, in which it operates.
BOBCAPS remains committed to act responsibly and ethically to maintain the
trust of its customers, its employees and other stakeholders.

B. Short title and applicability.

This policy, which encompasses the companys philosophy for delineating its
responsibility as a corporate citizen and lays down the guidelines and mechanism for
undertaking socially useful programmes for welfare and sustainable development
Of the community at large, is titled as the BOB Capital Markets Limited Corporate
Social Responsibility Policy, hereinafter referred to as BOBCAPS CSR.

68

BOBCAPS CSR has been prepared keeping in mind the Companys code of
business ethics and to comply with the requirements of Companies Act, 2013
(hereinafter called as the Act) and the Companies (Corporate Social Responsibility
Policy) Rules, 2014, notified by the Ministry of Corporate Affairs vide Notification
dated 27th February, 2014.
This policy shall apply to all BOBCAPS CSR initiative as and activities taken up
for the benefit of different segments of the society, specifically the deprived, underprivileged and differently-able persons.
Any or all provisions of the BOBCAPS CSR Policy would be subject to
revision/amendment in accordance with the guidelines on the subject as may be issued
from Government, from time to time.
BOBCAPS reserves the right to modify, add, or amend any of these policies, rules
or guidelines.

C. BOBCAPS CSR Programmes

BOBCAPS CSR programmes/projects areas shall be aligned with the national
development priorities and the needs of the communities and will be in linewith
schedule VII of Section 135 of the Act.
By its CSR programmes, BOBCAPS shall support programmes/projects and activities
in the following domains:

1. Empowerment
a. programmes/projects that promote gender equality, support creation of opportunities
and facilitate employment for women, the differently abled and other weaker sections of
the society ;
69

b. facilitate financial support and provide educational materials, information and tools
such as books, periodicals, computer equipment to needy schools and children with a
view to make them more educated and thus socially and economically empowered

c. promoting gender equality, empowering women, setting up homes and hostels for
women and orphans, setting up old age homes, day care centres and such other facilities
for senior citizens and measures for reducing inequalities faced by socially and
economically backward groups;

2. Education
a. promote access and quality of education and foster research and development
through creating infrastructure, promote scholarships, research grants among others in
schools, colleges and universities ;

b. programmes/projects on vocational training for specially-abled people, socially

and economically backward, and other weaker sections of the society

3. Environmenta. supporting programmes/projects that focus on conservation of the environment,

encourage use of renewable energy, ensure environmental sustainability, proper waste
management, reducing the carbon footprint and preserve the balance of ecology ;

b. ensuring environmental sustainability, ecological balance, protection of flora and

fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining
quality of soil, air and water;

4. Eradication of Povertya. programmes/projects and initiatives to impart financial literacy to facilitate financial
inclusion;
70

b. programmes /projects that help income generation, skill trainings, and information
dissemination programs related to farming, agricultural practices and animal husbandry
to support farmers with an aim to encourage rural development and reduce poverty and
hunger.

5. Disaster Relief
a. engages with not-for-profits to deliver programmes/projects that organize relief work
in times of natural calamities;

b. programmes/projects which contribute towards disaster preparedness and

humanitarian aid.

6. Health
a. Programmes/projects that help in reducing child mortality, improving maternal
health, combat and prevent diseases, facilitate hygiene and sanitation etc.

6. Others
Any other activities in relation of the above and all other activities which forms part
of BOBCAPS CSR programme.

D. Implementation
While executing its CSR activities, BOBCAPS shall ensure that such activities are not
in normal pursuance of its business.
BOBCAPS may undertake its CSR activities through a registered trust or society or any
company, established by the Company, its holding company under Section 8 of the Act
for such non-for-profit objectives.

71

Provided that BOBCAPS can carry out its CSR activities through such other institutes
having an established track record of 3 (three) years in undertaking the CSR activities.
BOBCAPS may also collaborate with other companies, banks, institutions for
undertaking the CSR activities subject to fulfillment of separate reporting requirements
as prescribe din the Companies (Corporate Social Responsibility Policy) Rules, 2014
(the Rules).
The Board or CSR Committee shall ensure that its Implementing partners are entities
registered as Trusts or Society or Company or Section 8/Section 25 company or
Department of Science & Technology (DST),certified technology incubators or through
collaborative projects with other corporate including its parent bank Bank of Baroda.
The implementing partner should not have less than three years experience in
implementing projects. These agencies will be screened based on BOBCAPS internal
screening criteria to ascertain the entitys credibility and its ability to execute the
proposed projects.
The CSR Committee will oversee implementation and monitoring of all CSR projects/
programmes with periodic visits and reports.

E. Governance
The approval of the CSR policy and overall oversight is the responsibility of the
Vodafone Board of Directors.
The responsibility of the CSR committee is to promote the strategy and administer and
execute the policy through an implementing partner(s).
The CSR committee is to ensure that projects/programmes are compliant with this
Policy and are monitored and reported effectively.

72

F. Roles and Responsibilities:

Board of Directors
The Board of Directors of the Company will be responsible for:

a. approval of the CSR Policy of the Company;

b. disclosing the content of the Policy in its report and place the Policy on the
Companys website in such a manner as prescribed under Section 135 of the Companies
Act 2013 read with the CSR Rules;

c .ensuring that the Company spends, in every financial year, at least two percent of the
average net profits of the Company made during the three immediately preceding
financial years in pursuance of this Policy ;

d. ensuring that it specifies the reasons in its report for not spending the earmarked
amount in case the Company fails to spend such amount during the financial year;

e. The Board shall have the power to make any change(s) in the Committee
constitution.

CSR Committee
a. Prepare, Revise And Modify The CSR Policy For The Company And Place The
Same With The Board Of Directors For Their Approval;
B. Ensure That the Programmes, Projects and Activities Supported Are Aligned With
The
Approved CSR Policy of the Company and Are Also Aligned To the Activities
Prescribed
In Schedule Vii of the Companies Act, 2013;

C. Review and Approve Annual Budgets With Respect To CSR Programmes;

73

D. Review Performance and Effectiveness of Projects Supported;

E. Develop and Institutionalize A CSR Reporting Mechanism in Light with Section 135
of the Companies Act 2013 Read With Rule 8 of The CSR Rules Framed There Under;

F. Respond to Any Query, Observation or Clarification Sought By the Ministry of

Corporate Affairs or Any Other Regulatory Authority With Regard To CSR Supported
Activities;

G. Ensure That The Approved CSR Policy Of The Company Is Displayed On The
Website Of The Company And Periodical Up Date Is Also Put Up On The Web Site;

H. Reviewing the Findings and Recommendations From Any Investigation Or Audit By

Regulatory Agencies Or External Auditors Or Consultants Concerning Vodafone India
Limited CSR Matters; And

I. In Case the Company Is Not Able To Spend Two Percent of The Average Net Profits
Of
The Last Three Financial Years or Any Part Thereof, The CSR Committee Shall Provide
The Reasons For Not Spending The Amount To The Board Which Shall Also Be
Included In The Boards Report;

G. CSR Expenditure
CSR expenditure will include all expenditure, direct and indirect, incurred by the
Company on CSR Programmes undertaken in accordance with the approved CSR Plan.
Moreover, any surplus and/or additional revenue generated out of CSR Activities
arising from any CSR Programmes shall not form part of the business profit of the
Company and same shall be spent for undertaking any CSR Activities only.
Accordingly, any income arising from CSR Programmes will be netted off from the
CSR expenditure and such net amount will be reported as CSR expenditure.
74

H. General
In case of any doubt with regard to any provision of the policy and also in respect of
matters not covered herein, a reference to be made to CSR Committee. In all such
matters, the interpretation and decision of the Committee shall be final.

75

Chapter 6

Questionnaire

76

SURVEY QUESTIONNAIRE PROFORMA ON CORPORATE

SOCIAL
RESPONSIBILITY (CSR)

Name of Respondent:
Gender: A) Male

B) Female

Designation:
Name of the:
Year of Establishment:
1. Are you aware of CSR as a terminology?
a) Yes

b) No

2. How can you describe the concept of CSR?

a) Very Clear

b) Somewhat Clear

c) Indifferent

d) No Clear

e) Not Clear At All

3. Do you think that there is a relationship between profitability and CSR?
a) Yes

b) No

4. Please rank the following drivers of CSR according to you (1for the highest rank
and 7 for lowest rank.

SR.

DRIVERS OF CORPORATE SOCIAL

NO.

RESPONSIBILITY

1.
2.
3.
4.
5.
6.
7.

RANK

Increase in profits
Image building
Vision and philosophy of the bank branch
Legal compliance
Rising international standards
Increasing awareness
Community pressure

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5. Please tick (whichever applicable) the strategy you have for CSR
implementation in your bank branch.
a) A Separate Department

b) NCO

c) Line Dept

d) Foundation Trust

6. Does your bank branch have separate allocation of funds for CSR implementation?
a) Yes

b) No

7. Has your bank branch invested in any of the following areas as part of its
community investment initiatives? (Please tick whichever applicable)

SR.NO

Community Investment

Yes

No

Initiatives
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Education
Helping the underprivileged
Local heritage
Youth development
Poverty alleviation
Working for disability
Conservation of nature
Games and sports
Promotion of culture
Infrastructural support to local

11.

community
No community investment

12.

initiatives
Others ,please give details below

8. What type of resources do you provide? (Please tick)

a) Money

b) In Kind

c) Volunteers

d) Loans

e) Other Please

Specify
9.

Has your bank branch introduced any of the following programmes to assist

employees, their families or community members? (Please tick)

a) Health

(Yes)

(No)

b) Education

(Yes)

(No)

c) Training

(Yes)

(No)
78

d) Counselling

(Yes)

e) Preservation Programmes

(Yes)

(No)
(No)

10. Does your bank branch reward for CSR activities?

a) Yes

b) No

11. If yes, what is the percentage of the net profit?

a) Not Disclosed b) Between 1% To 2%

c) Between 2% To 3%

d) More

Than 3%
12. Does your bank branch evaluate CSR Activities?
a) Yes

b) No

13. To which stakeholders do your bank branch report CSR information?

SR.

Stakeholder

Yes

No

No
1.
2.
3.
4.
5.

Board of directors
Employees
Customers
Suppliers
Government

14. Does your bank branch raise awareness within the bank branch in Relation to the
above csr issues through?
SR.NO
1.

Yes
Training and awareness

2.

programmes
Internal communication (e.g.

3.
4.

bulletins, intranet etc)

Management briefings
Others (specify)

No

15. To encourage employee volunteers ig kinds of incentives given by your Bank

branch are:

79

Items

Never

Sometimes

Always

Paid time off

Monetary incentives
Non- monetary
incentives
Seminars,
workshops

16. To improve employee welfare and labour relation, do your bank branch Practice the
following:

Items

Never

Sometimes

Always

Support system
Stable labour
relation
Preserve diversify
policy
Prevent
discrimination
Friendly office
layout

17. Does your bank branch communicate the policy to the stakeholders?

Stakeholders

Never

Sometimes

Always

Customers
Suppliers
Employees
Investors
Community

18. Rate your opinion about the following items for adoption of CSR practices by bank
branch:
(Please tick the statement if your agreement or disagreement with the following
statement by choosing the corresponding assertions form strongly agree- 5 strongly
disagree)

Items

Strongly

Agree

Indifferent

Disagree

Strongly
80

Agree

Disagree

Promote corporate
Image/loyalty
efficiency increase
financial
Competitive
market advantage
Organisational
values, culture,
mission & coals
Pressure from
stakeholders

19. Rate your opinion about the benefits to the following stakeholders of a bank branch
(please tick)

Variables

Strongly Agree Indifferent Disagree Strongly

Agree

Disagree

1. Build customer
2. Customer
satisfaction &
awareness
3. Quality product at
an affordable rate
4. Retention of
employees
5. Support work- life
balance
6. Motivate and
improve
employees
morale and
7. Encourage
donorship
corporate
teamwork
81

8. Support social
integration
9. Developing
employment and
infrastructure
10. Greater efficiency
and less waste
11. Avoid excessive
regulation
12. attract green and
ethical investment
13. environmental
friendly product,
services and
14. manufacturing
compliance with
regulation and
standard (ISO
etc)
15. protection of
natural resources

20. Do you prefer to buy product /services of the bank which practice csr?
a) Yes

b) No

21. Do you have the willingness to pay higher prices for product/services of bank
branch which practice CSR?
a) Yes

b) No

If yes, please add any further comments on your opinion /suggestion about CSR:
___________________________________________________________________

82

Date:
Place:
Thank you for completing the survey
Signature:

83

Chapter 7

Conclusion

84

Corporate Social Responsibility has attained new magnitude in the current years. As per
the research survey maximum numbers of companies conduct Corporate Social
Responsibility practices for the tax benefits and research findings shows that more than
70% companies in IT sector in Mumbai are involved in CSR activities.
1. Corporate Social Responsibility is the commitment of companies towards the
sustainable economic development of the society. It means engaging directly with local
communities, identifying their basic needs, and integrating their needs with business
goals.
2. NGOs are playing vital role in implementation of CSR in collaboration with the
companies.
3. In order to create awareness about CSR practices among people companies are
involved in training practices.
4. Non-governmental organizations (NGOs) have played a most vital role in pushing for
sustainable development through companies CSR activities. Broadening the horizon of
CSR under the flagship and coordination with NGOs, social activities like blood
donation, IT Education in Schools, old goods distribution activities, helping to eradicate
poverty, unemployment, illiteracy. Health sector, providing fees to the poor students,
free dress and books to poor children, help to senior citizens, education to children,
solving unemployment problems are carried on in Mumbai.
5. Going into further specific research in CSR activities it is found more than 70%
companies actively involved in the promotion of the better health, safety management
at work place while 50 % companies give importance to employees safety further
companies are making decision on the basis of complaints make by employees more
specifically 70% CSR activities decision is based on employees satisfaction.
6. Efficient energy management has become core of CSR policy in present society.
Studies shows that more than 75% of the companies are making efforts to save energy it
is good sign in the development of CSR.
85

7. In order to do CSR activities, companies mostly expand their fund on education,

youth development and infrastructure.
8. The fund allocated by companies to conduct CSR activities is meagrely spent on
environment. Research shows that most of the fund of CSR are spent on employee
welfare social issues, on the disposition of products it is very alarming trends which
require a proper measure to distribute fund according to need and priority of CSR.
9. The companies involved in CSR practices display code and conduct along with their
policy statement that motivates the people to do CSR.
10. Unfortunately companies reluctant to conduct third party audit for their CSR fund.
Research study revealed that only 20 % companies are approaching third party CSR
audit it required serious attendance of government companies verbally proclaimed that
they have annual budget for CSR activities research survey shows that 70% companies
allocate their fund for CSR in the beginning of the years but most of them do not
disclose the figures of budget if it is made compulsory to disclose the figures by
government thus it will motivate and more fund for CSR. This will help companies to
make budgeting however government had recently passed a bill that companies have to
spend 2% of their profit on CSR but it is not yet implemented by every company there
is need of monitoring CSR fund by the government...
11. It was revealed that 71% of companies allocating fund for CSR activities and most
of the fund sent for the social welfare. But it is observed that very few numbers of
companies have any national goal to achieve through CSR expenditure.
The overall results indicate that the industry does have a strong support for social
responsibility and there are differences while converting this support into action.

86