CSR Activities of MBL

1.0. Introduction
1.1. Background
Corporate Social Responsibility is not only an act for humanity but also to provide good
working environment to an organization's employees, to pay just remuneration, to give
regular leave, to care as a human beings and to care environment of the society (The Daily
Prothom-Alo). Business organizations in the society are accountable to implement different
socially desirable activities not only for stakeholders concern but also for different external
parties. CSR reporting can be a significant part in the financial reporting while it provides
information to different stakeholders (Weygant et.al 2011) and as an additional part social
report would provide information relating to whole environmental concern to society. The
system of providing information may vary from company to company, country to country
(Azim et al. 2011) but the common media of providing information is financial statement.
However, there does not exist a universally accepted theoretical framework for corporate
social and environmental reporting

Corporate Social Responsibility (CSR) is integral and inseparable part of the long-term
business and sustainable growth and success, which plays an important role in promoting
values both locally and internationally. The Bank integrates all social, environmental and
socioeconomically issues in the time of its decision making. In line with its slogan- "Banglar
Bank" MBL is fully committed to conduct its banking business in an economically,
environmentally and socially sustainable manner. Contribution in CSR programs is always
supported and encouraged by the Board of Directors of the Bank.

MBL sets its Vision Statement-"Would make finest corporate citizen" and Mission Statement-
"Will become most caring, focused for equitable growth based on diversified deployment of
resources, and nevertheless would remain healthy and gainfully profitable Bank", which in
fact focuses on the peoples' interests and the Bank's profitability as well. In line with Bank's
Vision and Mission Statement, CSR activities have been fully integrated into the business
functioning, which ultimately acting as a catalyst to build up an ever-lasting warm
relationship with all the stakeholders and society people. The Bank does CSR activities,
besides its own fund, through Mercantile Bank Foundation, which acts as a helping hand to
the distressed people of the country.

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 CSR Activities of MBL

1.2. Objective
The aims of this paper are to understand the CSR practices of Mercantile Bank limited.
There are several particular objectives which are also given below:
 To study the concept of CSR;
 To study the major areas of CSR initiatives of MBL in Bangladesh;
 To focus on the present status of CSR in MBL.
 To compare with other bank’s CSR performance.
1.3. Methodology
 Formal method of report preparation is followed here.
 The study is exclusively a descriptive research on corporate social reporting practices
of Private commercial banks in Bangladesh based on a small sample size.
 The study is purely based on the information from secondary data sources. The data
collected for the purpose of the study involves the examination of annual reports.
 To analyze the extent of social responsibility reporting by Bangladeshi Banking
companies, annual reports constituted the main primary source.
 Guthrie and Parker (1990), Gray, Owen and Adams (1996), Deegan and Rankin (1997)
and other scholars studied corporate social reporting practices using annual reports
as the key source of information.
 Additionally, it is documented that annual report is the most widespread and accepted
document for corporate communication with different parties in Bangladesh.

1.4. Scope
The study covers the CSR activities of Mercantile bank limited. Different ways and methods
of corporate social responsibility of MBL is focused to the major part of the report. As
corporate social responsibility is a mandatory action for all commercial bank in Bangladesh
Mercantile bank engages itself that also serves the nation. The study also covers the analysis
of weakness and strength of the CSR activities of MBL.

1.5. Limitation

Time might be a major constraint in accumulating all sorts of data. Every organization has
their own secrecy that is not revealed to others .so confidentiality of data is another barrier
that might be faced during the conduct of the study. The study will have been limited due to
the following reasons:

1. The study is concentrated in MBL’s corporate social responsibility practices.

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 CSR Activities of MBL

2. Lack of enough experience of analyzing the data.

3. The result of the study may not fit to other Bank as the study is conducted
only in the context of Mercantile Bank Ltd.

4. Due to the limited accces of data, the study may not be perfect scent percent.

5. Insufficiency of information is the major constraint, which is highly required

for the study.

6. Authorities does not reveal full information about company.

7. Up-to-date information are not available.

8. No availability of published materials about their corporate social

responsibility practice.

9. There are some confidential files which can’t be accessed for confidentiality
or secrecy of the Management.

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2.0. Theoretical framework

2.1. Definition of Corporate Social Responsibility

Corporate social responsibility (CSR), also known as corporate responsibility, corporate

citizenship, responsible business, sustainable responsible business (SRB), or corporate
social performance- is a form of corporate self-regulation integrated into a business model.
Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business
would monitor and ensure its adherence to law, ethical standards, and international norms.
Business would embrace responsibility for the impact of their activities on the environment,
consumers, employees, communities, stakeholders and all other members of the public
sphere. Furthermore, business would proactively promote the public interest by
encouraging community growth and development, and voluntarily eliminating practices that
harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion
of public interest into corporate decision-making, and the honoring of a triple bottom line:
People, Planet, Profits. The practice of CSR is subject to much debate and criticism.
Proponents argue that there is a strong business case for CSR, in that corporations benefit in
multiple ways by operating with a perspective broader and longer than their own immediate,
short-term profits. Critics argue that CSR distracts from the fundamental economic role of
businesses; others argue that it is nothing more than superficial window-dressing; others
yet argue that it is an attempt to preempt the role of governments as a watchdog over
powerful multinational corporations. Corporate Social Responsibility has been redefined
throughout the years. However, it essentially is titled to aid to an organization's mission as
well as a guide to what the company stands for and will uphold to its consumers.

2.2. Corporate Social Responsibility-Unlocking the value

According to the results of a global survey by Ernst & Young, 94 per cent of companies believe
the development of a Corporate Social Responsibility (CSR) strategy can deliver real
business benefits, however only 11 per cent have made significant progress in implementing
the strategy in their organization. Senior executives from 147 companies in a range of
industry sectors across Europe, North America and Australasia were interviewed for the

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survey. The survey concluded that CEOs are failing to recognize the benefits of implementing
Corporate Social Responsibility strategies, despite increased pressure to include ethical,
social and environmental issues into their decision-making processes. Research found that
company CSR programs influence 70 per cent of all consumer purchasing decisions, with
many investors and employees also being swayed in their choice of companies. "While
companies recognize the value of an integrated CSR strategy, the majority are failing to
maximize the associated business opportunities," said Andrew Grant, Ernst & Young
Environment and Sustainability Services Principal. "Corporate Social Responsibility is now
a determining factor in consumer and client choice which companies cannot afford to ignore.
Companies who fail to maximize their adoption of a CSR strategy will be left behind.

2.3. Argument against business performing social responsibility activities

The best-known argument against business performing social responsibility activities has
been advanced Milton Friedman, one of America's most distinguished economists. Friedman
argues that making business managers simultaneously responsible to business owners for
reaching profit objectives and to society for enhancing social welfare sets up a conflict of
interest that could potentially cause the demise of business as it is known today. According
to Friedman, this demise will almost certainly occur if business is continually forced to
perform socially responsible actions that directly conflict with private organizational
objectives.

Friedman also argues that to require business managers to pursue socially responsible
objectives may, in fact, be unethical, because it compels managers to spend money on some
Individuals that rightfully belongs to other individuals.

In a free enterprise, private property system, a corporate executive is an employee of the

owners of the business. He has direct responsibility to his employers. That responsibility is
to conduct the business in accordance with their desires, which generally will be to make as
much money as possible while conforming to the basic rules of society, both those embodied
in law and those embodied in ethical custom. Insofar as his actions reduce returns to

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stockholder, he is spending their money. Insofar as his actions raise the price to customers,
he is spending the customer’s money.

An example that Friedman could use to illustrate his argument is the Control Data
Corporation. Former chairman William Norris involved Control Data in many Social
responsible programs that cost the company millions of dollars- from building plants in the
inner city and employing a minority workforce to researching farming on the Alaskan tundra.
When Control Data began to incur net losses of millions of dollars in the mid-1980s, critics
blamed Norris's "do-gooder" mentality. Eventually, a new chairman was installed to
restructure the company and return it to the profitability.

2.4. Corporate Social Responsibility in Bangladesh

CSR concepts and practices in Bangladesh have a long history of philanthropic activities from
time immemorial. These philanthropic activities included donations to different charitable
organizations, poor people and religious institutions. Till now, most of the businesses in
Bangladesh are family owned and first generation businesses. They are involved in
community development work in the form of charity without having any definite policy
regarding the expenses or any concrete motive regarding financial gains in many instances.
Moreover, most of the SMEs fall under the informal sector having low management structure
and resources to address the social and environmental issues. These limitations drive the
top management of local companies to think only about the profit maximization rather than
doing business considering the triple bottom line: profit, planet and people.

The discussions on CSR practices in Bangladesh in its modern global terms, are relatively
new, but not so for the concept itself. Because, being a part of the global market, it is difficult
to ignore CSR standard specifically in the export sector. In general, it is true that in
Bangladesh, the status of labor rights practices, environmental management and
transparency in corporate governance are not satisfactory, largely due to poor enforcement
of existing laws and inadequate pressure from civil society and interest groups like
Consumer Forums. Globally, as CSR practices are gradually being integrated into
international business practices and hence is becoming one of the determining factors for

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market accesses, it is becoming equally instrumental for local acceptability. A focus on CSR
in Bangladesh would be useful, not only for improving corporate governance, labor rights,
work place safety, fair treatment of workers, community development and environment
management but also for industrialization and global market access.

Since, CSR entails working with stakeholders it is important to work from within and
diagnose the stakeholders; concerns so that CSR is truly embedded in the companies. By
now, many CSR dimensions are practiced in Bangladesh. The SMEs largely depend upon
export. The US and EU buyers set guidelines to Readymade Garment (RMG) industry to
ensure the standards. Moreover, some buyers from EU visited the sites of recently collapsed
garments factories. A temporary ban was also imposed on shrimp export to the EU on health
and hygienic standard and appropriate remedial action followed in that instance too. But,
some of the exporters found difficulty in convincing the US/EU buyers to have positive
attitude toward Bangladesh due to inadequate CSR practices.

Businessmen need to recognize the implications of CSR for business activities. Companies
are facing the challenges of adapting effectively to the changing environment in the context
of globalization and in particular in the export sector. Although Consumer Rights Movement,
enforcement of government regulations and a structured view regarding the economic
importance of CRS are not yet so widespread in the corporate world in Bangladesh,
companies have gradually been attaching more importance to CSR in the local market as
well. They are increasingly aware that CSR can be of direct economic value. Companies can
contribute to social and environmental objectives, through integrating CSR as a strategic
investment into their core business strategy, management instruments and operations. This
is an investment, not a cost, much like quality management. So, business organizations can
thereby have an inclusive financial, commercial and social approach, leading to a long term
strategy minizing risk linked to uncertainty.

Businessmen need to recognize the implications of CSR for business activities. Companies
are facing the challenges of adapting effectively to the changing environment in the context
of globalization and in particular in the export sector. Although Consumer Rights Movement,

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 CSR Activities of MBL

enforcement of government regulations and a structured view regarding the economic

importance of CRS are not yet so widespread in the corporate world in Bangladesh,
companies have gradually been attaching more importance to CSR in the local market as
well. They are increasingly aware that CSR can be of direct economic value. Companies can
contribute to social and environmental objectives, through integrating CSR as a strategic
investment into their core business strategy, management instruments and operations. This
is an investment, not a cost, much like quality management. So, business organizations can
thereby have an inclusive financial, commercial and social approach, leading to a long term
in developing, economy, society and environment.

Lack of enforcement of Industrial Laws and Regulations, weak unions, absence of consumer
rights groups and high level of corruption within the regulatory bodies make CSR violation
rampant in Bangladesh. Two most significant foreign exchange sources is the RMG sector
and the overseas manpower export. Unbelievably low compensation, working hours,
health/hygiene/sanitation conditions, fire safety and various types of abuse are so common
and to the extent of inhumanity that will shock any conscientious individual to the core.

Lack of enforcement of Industrial Laws and Regulations, weak unions, absence of consumer
rights groups and high level of corruption within the regulatory bodies make CSR violation
rampant in Bangladesh. Two most significant foreign exchange sources is the RMG sector
and the overseas manpower export. Unbelievably low compensation, working hours,
health/hygiene/sanitation conditions, fire safety and various types of abuse are so common
and to the extent of inhumanity that will shock any conscientious individual to the core.

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 CSR Activities of MBL

3.0. Overview of the organization

3.1. Profile of the organization

Features Values

Name Mercantile Bank Limited

Generation Mr. Md. Abdul Jalil, M.P was the founder and chairman of the Mercantile
Bank Limited. At present, Morshed Alam, M.P is the chairman. Mercantile
Bank Limited was incorporated in Bangladesh as a Public Limited Company
with limited liability under the Bank Companies Act, 1991 on May 20, 1999
and commenced commercial operation on June 02, 1999. It was listed in
Dhaka Stock Exchange and Chittagong Stock Exchange on February 16, 2004
and February 26, 2004 respectively.

Registered Address: 61, Dilkusha C/A, Dhaka-1000

Address(main
branch)

Legal Status Public Limited Company

Chairman Shahidul Ahsan

Managing Director Kazi Masihur Rahamn

& CEO

Date of 20 May 1999

Incorporation

Commencement of 02 June 1999

Business

Total Asset BDT 182800.17 Million

Number of ATMs BDT 19,140 Million

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 CSR Activities of MBL

3.2. Mission

“Will become most caring, focused for equitable growth based on diversified deployment of
resources, and nevertheless would remain healthy and gainfully profitable Bank”

3.3. Vision

“To make finest corporate citizen”

3.4. Objectives
 To be market leader in product innovation.
 To achieve positive Economic Value Added (EVA) each year.
 To be one of the top five financial institutions in Bangladesh in terms of market share in
all significant market segment they serve.
 To be one of the top three financial institutions in Bangladesh in terms of cost efficiency.

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 CSR Activities of MBL

3.5. Corporate Structure of MBL

Managing Director and CEO

Additional Managing Director

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

First Vice President

Assistant Vice President

First Assistant Vice President

Principle Officer

Senior Executive Officer

Executive Officer

Assistant Officer

Figure: Corporate structure of MBL

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 CSR Activities of MBL

3.6. Financing Highlights of MBL

Following table shows the financial highlights of Mercantile Bank limited for the last few
years:

Table: Financial Highlight (Annual Reports 2010-2016)

(Taka in million)
Particulars 2010 2011 2012 2013 2014 2015 2016
Authorized 1300.00 3500.00 3500.00 9000.00 9000.00 9000.00 9000.00
capital
Paid up capital 1198.12 1488.90 1898.64 2,258.42 4172.21 4978.09 6,210.7
Total asset 37259.62 55940.54 55938.72 66266.52 87240.11 117553.0 154140.1
Total deposit 33327.56 39448.00 49539.39 58133.47 76629.12 112262.0 142093.6
Credit deposit 82.53 83.02 88.65 89.22 88.77 82.68 78.26
ratio (%)
Earnings per 42.22 32.05 29.53 31.67 42.04 35.9 23.6
share(EPS)
P/E ratio( 8 12 11 12 15 16 20
times)
Source: Mercantile Bank Limited
3.7. Product and service offerings of MBL

The bank is continuously differentiating itself from other banks through its products and
services. Their service is only for their target customers to fulfill their needs so that their
needs and demands can be met accurately. These are as follows:

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 CSR Activities of MBL

Loans and advances

Mercantile Bank Ltd. provides following types of loans to their clients

Retail Loan:
 Consumer credit scheme
 Lease finance
 Any purpose loan
 Home loan scheme
 Doctors’ credit scheme
 Car loan scheme
 House furnishing loan
 Cottage Loan
 Overseas employment loan scheme
 Rural Development scheme

Corporate Loan:
 Short Term Finance
 Long Term Finance
 Real Estate Finance
 Import Finance
 Construction Business
 Export Finance
 Structured Finance
 Loan Syndication

SME Financing:
 Chaka (Term Loan)
 Samriddhi (Continuous loan)
 Mousumi (Short term seasonal loan)

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 CSR Activities of MBL

 Anannya (Women entrepreneur’s loan)

Agriculture Loan:
 Nabanno (Polli loan)
 Sakti (Solar energy loan/Bio gas)

MBL Card:
 Debit Card
 Credit card (Local card, international card, Duel currency card)
 MBL pre- paid card (Student card, hajj card, travel card)
E-banking Services:
 Online Banking
 Mobile financial services (My Cash)

4.0. CSR initiatives of Mercantile Bank Limited

4.1. CSR activities of MBL
CSR is an integral part of MBL culture. Through different projects MBL presume to
contribute to the community, but their main focus is to help millions of underprivileged
children and poor people in Bangladesh. MBL has always been active in social responsible
projects since the inception. Basically, They deem CSR as MBL's most static business model
which is socially responsible and environmentally sustainable wherein, 'socially responsible'
refers to the activities those are beneficial for the society and 'environmentally sustainable'
refers to their activities conducive to the environment. MBL is fully dedicated and motivated
with this notion.
CSR is the continuing commitment by business to behave ethically and contribute to
economic development while improving the quality of life of the workforce and their families
as well as at local community and society at large. For instance, the CSR definition used by
Business for Social Responsibility is: "Operating a business in a manner that meets or
exceeds the ethical, legal, commercial and public expectations that society has of business".
The rationale for CSR has been articulated in a number of ways. In essence, it is about
building sustainable businesses, which need healthy economies, markets and communities.
The key drivers for CSR are:

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 CSR Activities of MBL

 Enlightened self-interest - creating a synergy of ethics, a cohesive society and a

sustainable global economy where markets, labors and communities are able to
function mutually befitted well together.
 Social investment - contributing to physical infrastructure and social capital is
increasingly seen as a necessary part of doing business
 Transparency and trust -usually, business has low ratings of trust in general public
perception. There is increasing expectation that companies will be more open, more
accountable and be prepared to report publicly on their performance in social and
environmental arenas.
 Increased public expectations of business - globally companies are expected to do
more than merely provide jobs and contribute to the economy through taxes and
employment.
CSR plan of MBL is mainly about the awareness of actions in support of environmentally
sustainable societal development. Different organizations have framed different definitions
of CSR although there is considerable common ground between them. MBL consider CSR as
how companies manage the business processes to produce an overall positive impact on
society and environment. CSR is integrated into their operations, is part and parcel of their
business and is also actively pursued at every level of the Bank. Their obligation to Corporate
Social Responsibility ensures remaining true to our tradition of honesty; maintain a long-
term point of view to make economically sound, environmentally responsible and socially
supportive decisions. In line with this view, MBL has always been keen to deploy its
resources not only towards maximizing economic profitability, but also to offer better
quality of life to both our internal and external stakeholder groups. MBL Corporate Social
Responsibility, overseen by the MBL Foundation, has over the years aided them to ensure
that our funding to many corporates all over the country been never void of five key
philanthropy pillars: community outreach, the arts, education, medical research, and the
environment.
4.2. Building a Sustainable Society
A more common platform of CSR is 'Philanthropy'. MBL believes that CSR is indeed a
fundamental part of the long-term business and sustainable growth and success, which plays
an important role in promoting values both locally and internationally. There is no dilemma,
through our day-to-day business operations; we are adding values to the society and the
economy. Ultimate goal of CSR activities of MBL is "Building a Sustainable Society". The Bank
promotes CSR activities, apart from its own fund, through Mercantile Bank Foundation,
which acts as a helping hand to the distressed people of the country. Investment in CSR
programs is always supported and encouraged by the Board of Directors. Through "CSR
Desk", the Management reports to the Board and Regulatory Bodies on CSR activities and is
responsible to implement a specific line of approving authority, control and monitoring for
financial support of such activities.

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 CSR Activities of MBL

In the spirit of corporate citizenship, MBL is set to fulfill its social obligations through a broad
range of versatile activities. Our CSR activities are focused to encourage our culture and
uphold our tradition; extending a helping hand to the deprived and the destitute; victims of
natural calamities and the disabled. Even we extend our hands of cordial co-operation to the
meritorious poor students. A significant contribution of BDT 49.4 million has been made by
MBL under CSR in 2011, along with many other CSR initiatives in the offering, which
demonstrates our commitment to the Community people as well as to the principles of a
good "Corporate Citizen". Sector-wise contribution of the Mercantile Bank Limited under
CSR activities in 2016 has been furnished beneath:
Sector-wise contribution of the Mercantile Bank Limited

Sectors (BDT in Millions) Percentage

23.08%
Education 11.80

Health 14.10 28.54%

18.62%
Disaster Management 9.20

Sports 1.90 3.85%

9.72%
Art & Culture 4.80

Others 7.60 15.38%

Total 49.40 100%

Source: Mercantile Bank Limited

Pie Chart of Sector wise Contribution of MBL

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 CSR Activities of MBL

Contribution

15.38%
23.08%

9.72%

3.85%

28.54%
18.62%

Education Health Disaster Management Sports Art & Culture Others

Source: Mercantile Bank Limited

4.5. Mercantile Bank Foundation
MBL believes that, true success does not consist in profit maximization only rather in doing
something for the betterment of deprived part of the society. With this vision, MBL has
established a foundation in the name and style, "Mercantile Bank Foundation" in 2000, just
after a year of its inception, to work for the distressed and disabled people. Actually, the
Foundation has been promoting a dialogue between the Bank and its community people.
Since the inception, MBL Foundation took part in several social welfare activities.

MBL contributes 1% of its Operating Profit or BDT 4.00 million, which one is maximum, to
the Mercantile Bank Foundation every year, and from this amount, the Foundation cares the
distressed and disabled people of the country. Since inception, the foundation has been
awarding some noted intellectual personalities of the society for their outstanding
performance and contribution in their respective fields. In 2011, Mercantile Bank
Foundation (MBF) launched a new scholarship program, "MBF Education Scholarship".
Under this program, In 2016 MBL has provided scholarship among the meritorious but poor
students who have secured a considerable brilliant results in JSC, SSC and HSC in 2015 across
the country despite oppressed by the inevitable fate accompanied by the poverty.

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 CSR Activities of MBL

Furthermore, the funding policy has focused on five major areas: Community outreach,
Health & Medical research, Education, Arts & Culture, development of Sports. MBL runs
numerous philanthropy programs all over the country, and Mercantile Bank Foundation is
forever destined to "do good" and even better in the days to come.
4.6. Objective of Mercantile Bank foundation
 Mercantile Bank Foundation has been formed with the aim of achieving some
underlying objectives including:
 To take possible initiatives in increasing social well- being and alleviating poverty
from the country.
 To support the education by establishing new educational institutions, providing
stipends/ scholarship to the poor but brilliant students
 To provide awards to the Scholars in eleven significant arenas for their outstanding
contribution, as they uphold nation's pride brightly even across the geographical
boundaries. These arenas are:
 Bengali Language and Literature
 Education
 Culture
 Liberation War based Research
 Economy and Economy related Research
 Healthcare
 Science and Technology
 Industry and Commerce
 Journalism
 Agriculture based Research and Development
 To assist research activities on Bengali Literature through Bangla Academy.
 To support the writers and publishers through purchasing their books and
distributing these to different educational institutions on the occasion of national and
historical days.
 To assist the unemployed young to make them self-sufficient.
 To assist the rootless and distressed orphans and mentally retarded children through
taking appropriate steps for their mental perfection and self-support.
 To support in establishing hospitals, clinics, etc. for the improvement of the health
sector, to donate one time financial endowment to the poor artiste, literature-patron,
for ailing fatal disease-affected poor patients, to support the poor father for arranging
his daughter's marriage, and to help poor but bright students.

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 CSR Activities of MBL

4.7. Mercantile Bank Award

MBL always has encouraged the motive in mind to build an ever-lasting warm relationship
with the customers, employees, finance providers, regulatory bodies and the community
people at large. Keeping this motive in mind, the Bank always cares all of its stakeholders
and the community people since its inception. Mercantile Bank Foundation has been
established to act as a helping hand to the community people and Bank's commitment
towards CSR. From foundation, MBL each year on its founding anniversary award some
noted intellectual personalities of the society for the outstanding performance in their
respective field.
In continuation, during 2016, the Foundation of the Bank provides awards to 11 (eleven)
Scholars for their outstanding contribution in eleven areas under the heading "Mercantile
Bank Award-2016". The Award includes a Gold Medal (2 Vori), a Crest and one time financial
endowment worth BDT 1.00 lakh. Hon'ble Finance Minister of Government of Bangladesh,
Abul Maal Abdul Muhith was the Chief Guest of the program, while Dr. Atiur Rahman, Hon'ble
Governor of Bangladesh Bank was present as Special Guest. Md. Abdul Jalil, M.P, Hon'ble
Chairman of the Bank presided over the program. The Scholars who have been honored with
Mercantile Bank Award-2016 are as under:

Mercantile Bank Award-2016

Arenas Scholars Rewarded
Bengali Language and Literature Dr. Mustafa Nur Ul Islam
Education Dr. Sirajul Islam Chowdhury
Culture Rafiqun Nabi
Liberation War based Research Shahriar Kabir
Economy and Economic Research Dr. Binayek Sen
Healthcare National Professor Brig. Dr. Abdul Malek
Science and Technology Dr. Maksudul Alam
Commerce and Industry Abdulla Hel Bari
Journalism Kamal Lohani
Sports Musa Ibrahim
Liberation War Lt. Col. (Rtd.) Kazi Nuruzzzaman (posthumous)
Source: Mercantile Bank Limited

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4.8. MBL Education Scholarship Program

Mercantile Bank launched a Scholarship program in the name and style, "MBF Education
Scholarship" for the meritorious but poor students across the country under the category of
JSC, SSC and HSC. MBF Education Scholarship program is an explicit expression of MBL's
motive towards building the nation through extending hands of assistance to the future
generation of the country.

In the light of corporate citizenship, Mercantile Bank is set to fulfill its social obligations
through a broad range of activities. Among them, MBL presumed that, education is the
foremost tool for social change. As CSR activities, MBL foundation has continued the major
contribution in Education & Research purpose. In 2016, MBL, from its foundation provided
scholarship among the numerous poor but meritorious students who have successfully
passed (with minimum CGPA of 4.50) J.S.C/S.S.C/H.S.C in 2015 across the country and really
in need of financial assistance to continue their studies further. The tenure of the Scholarship
is 1 (One) year. The details information of the scholarship is as under:

Scholarship Program 2016

Money Awarded Per No of Beneficiary Tenure

Category
Month

J.S.C BDT 750 349 1 year

S.S.C BDT 1,000 321 1 year

H.S.C BDT 1,500 167 1 year

Source: Mercantile Bank Limited

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 CSR Activities of MBL

Division wise information of scholarship awardees in 2016

Number of students
Division Name
J.S.C. S.S.C. H.S.C. Total

Dhaka 70 43 34 147

Rajshahi 65 65 50 180

Rangpur 48 40 20 108

Chittagong 45 35 10 90

Sylhet 42 50 15 107

Khulna 50 50 20 120

Barisal 29 38 18 85

Total 349 321 167 837

Source: Mercantile Bank Limited

Total amount of Disbursement (one Year)

Disbursement (BDT)
Category Number of Students
Per Student Total

J.S.C 349 9,000.00 3141000

S.S.C 321 12,000.00 3852000

H.S.C 167 18,000.00 3006000

Source: Mercantile Bank Limited

4.9. MBL's Responsibilities to Society People
MBL Foundation receives requests for financial aid from disabled people, disaster victims
and various organizations including educational and professional institutions and charities.
In response to these requests, the Foundation comes forward and provides financial
assistance to these people and institutions every now and then.

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MBL as a legal corporate entity is fully aware of its responsibility about how its operational
activities impact on its stakeholders, the economy, the society, its staff and last but not least,
the environment. Conducting business in an ethical way, creating opportunities for business
and economic growth, empowering people to fulfill their aspirations, ensuring protection of
environment while financing businesses along with supporting the distressed people of the
society are the focal point of the CSR policy of MBL. In discharging the CSR responsibilities,
the Bank contributes on the areas of education, health, employment, professional
development, art & culture, disaster management and contribution to the national exchequer
as well.
4.10. Community outreach: a helping hand for populations at-risk
MBL is fully committed to providing opportunities for the economically disadvantaged
communities by fostering economic development and supporting local communities. The
Bank strives to assist the victims of natural disaster by providing financial help in
rehabilitation and rescue purposes.
Distribution of Winter Clothes among the Poor People
MBL has distributed winter clothes among the distressed people of the cold affected areas of
the country. About 36,750 pieces of new winter clothes like Blankets, Shawls, Quilts and
Sweaters worth BDT 6.00 million has been distributed with the co-operation of the Local
Peoples' Representatives in the different cold affected areas of the country.
MBL continues Financial Support to BDR Mutiny affected Families
BDR mutiny in February, 2009 caused an irretrievable loss to the nation. MBL has widened
its arms to share the sufferings of the revolt-affected families. In continuation, this year also
MBL donated BDT 0.96 million to two BDR mutiny-affected families.
4.11. Health and Medical
Donation to Ivy Rahman Blood Bank
MBL has donated BDT 1 million for purchasing Hematology Analyzer for Cell Screening to
Sheikh Hasina Institute of Transfusion Medicine and Ivy Rahman Blood bank, USTC Project.
Hon'ble Chairman of the Bank Md. Abdul Jalil, M.P, handed over the cheque to National
Professor, Nurul Islam and Professor Dr. Mujibur Rahman
MBL Donated an Ambulance to Shahid Monsur Ali Medical College
MBL has donated an ambulance to Shahid Monsur Ali Medical College. Md. Abdul Jalil, M.P,
Hon'ble Chairman of MBL, handed over the Ambulance to Dr. Jamal Uddin Chowdhury,
Chairman of Shahid Monsur Ali Medical College.
Donation to Liver Foundation

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MBL has donated BDT 1.11 million to Liver Foundation of Bangladesh for purchasing 2 (two)
medical equipments. Md. Abdul Jalil, M.P, Hon'ble Chairman of MBL handed over the Cheque
to Prof. Mohammad Ali, Secretary General of Liver Foundation of Bangladesh.
4.12. Education: teaching the young and spreading knowledge
Donation to Metropolitan University, Sylhet
MBL has donated BDT 1 million for development of the Library of Metropolitan University,
Sylhet. A.K.M. Shahidul Haque, Managing Director & CEO of MBL handed over the donation
cheque to Professor Abdul Aziz, Vice-Chancellor, Metropolitan University, Sylhet.
MBL Donated a Bus to NSTU
MBL has donated a 52 seated Bus to Noakhali Science and Tecnology University (NSTU). Md.
Abdul Jalil, M.P, Hon'ble Chairman of MBL, handed over the Bus to A. K. M. Sayedul Haque
Chowdhury, Vice Chancellor of NSTU.
4.13. The Arts: preserving cultural heritage and sponsoring the performing arts
Celebration of Bangla New Year-1418
MBL has celebrated the Bangla New year-1418 as it has been doing since inception. All its
offices were decorated to a colorful festive look. Customers in the Branches were invited to
share the joy of festival and they were entertained with sweets as a traditional ritual. This
kind of participation enhance the relationship and social bondage. Apart from that, MBL also
donated to various cultural and educational institutes to celebrate the Bangla New Year-
1418.
4.15. Traditional Games and Sports
MBL always encourages the development of games and sports of the country. In different
times, the Bank has contributed to organize a variety of traditional games and sports. In
2016, the Bank contributes to different institutions/clubs to arrange games and sports such
as,
 Bangladesh Martial Arts Association for arranging WUKF Tournament;
 Soccer Club, Feni; etc.
4.16. Professional Development
From the inception, each year MBL has been supporting the various Professional bodies.
Some professional institutions that MBL donates in 2016 are:

 Bangladesh Photo Journalists Forum;

 The Dhaka University Alumni Association;

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 CSR Activities of MBL

 The Chittagong Press Club;

 Jahangirnagar University Club;
 Association of Bankers Bangladesh.

4.17. Playing part in the Economy

The Bank has contributed to the economy by generating employment of over 1668 full time
employees. It also plays an imperative role in creating job opportunities by financing to the
productive sectors. The Bank recruits a number of fresh graduates and experienced officers
every year. In 2016, a total of 113 fresh graduates and 43 experienced bankers have joined
with MBL Family. In the intermediation process, the Bank mobilized resources of BDT
102,262.02 million from the surplus economic unit and deployed BDT 79,999.80 million in
2016 to deficit group. Following table depicts the Bank's performance in terms of deposit
mobilization, its deployments, international business, inward foreign remittance and
employments as at December 31 of 2016 and 2015:
MBL’s Contribution to Economy

Contribution to Economy In 2011 In 2010

Mobilization of Deposit (BDT in million) 102,262.02 75,629.14

Deployment of Loans and Advances (BDT in million) 79,999.80 66,377.70

Export Business (BDT in million) 81,311.80 59,404.20

Import Business (BDT in million) 95,008.70 89,524.10

Inward Foreign Remittance (BDT in million) 7,150.00 5,108.10

Employment (in numbers) (BDT in million) 1,668 1,526

Source: Mercantile Bank Limited

4.18. Contribution to the National Exchequer
The Bank plays its responsibility to the Government of Bangladesh paying corporate tax
regularly. As per tax law, the bank deducts at source income tax, VAT, excise duty from
various payments and services for ultimate credit to government exchequer. This year,
42.50% Tax is to be paid to the National Exchequer from its operation profit. The Bank has
made provision of BDT 1,250.00 million for corporate tax in 2016 against BDT 1,010.59
million in 2015.

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4.19. Care to Environment: Encouraging new thinking about Environmental Challenges

The core business model of MBL explicitly expresses its sustainability to words environment
and unveils its ecofriendly motives i.e. not to harm or damage 'Green Life Belt' of 'Mother
nature' which eventually ensures a pollution free breathing atmosphere for our future
generations. Our aim is to minimize any harmful effects and consider the development and
implementation of environmental standards to achieve this to be of great importance. MBL
have established a separate unit to turn our Bank as a 'Green Bank'. A lot of measures have
been adopted including green financing, creating awareness among the employees for
efficient use of water, electricity and paper, giving preference to ecofriendly while financing
and reuse of equipments. Green Banking is to provide innovative green products to support
the activities that are not hazardous to environment and help to conserve the environment.
MBL always try to manage the impact of operations and develop initiatives to improve its
environment conducive footprint.
4.20. Involving Employees in the CSR approach
As a "Corporate Citizen", Mercantile Bank Limited is striving to play its responsibility in this
regard. The involvement of employees in the CSR approach is one of the most effective ways
to CSR awareness. In the new CSR strategy, they have developed activities to keep employees
up-to-date with our CSR goals and principles. They believe that they will put their knowledge
to both at work place and in their private lives.
Raising CSR awareness among the Group's employees
MBL arranged a full day workshop program to raise the awareness of its employees
regarding key CSR issues and its policies in this area. To build on this training, environmental
awareness-raising actions have been set up locally
Informing and encouraging dialogue
MBL's employees are also kept updated about day-today CSR events, and are invited to
exchange on new issues and the Group's actions in this area
4.21. Comparison of CSR performance with other banks
For the comparison CSR activities are divided into six major sectors namely a) Education b)
Health c) Environment d) Culture & Heritage e) Social welfare and f) Sports. An un-weighted
index has been prepared under the above mentioned 6 heads with 96 items. If a bank
performs any CSR activity of 96 items it is assigned 1 and if it does not do so it is assigned 0.

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 CSR Activities of MBL

Ranking of the Banks on the Basis of total CSR and Relevant Disclosure
The sample banks have been ranked on the basis of their total CSR activities in education,
health, environment, culture & heritage, social welfare and sports as follows:
Name of Banks CSR Score CSR Score Rank
Achieved
Brac Bank Ltd. 96 20 6
United Commercial Bank Ltd. 96 23 4
Bank Asia Ltd. 96 18 7
Prime Bank Ltd 96 22 5
Mercantile Bank Ltd. 96 26 2
Jamuna Bank Ltd. 96 25 3
Dutch Bangla Bank Ltd. 96 35 1
Mutual Trust Bank Ltd 96 8 11
Standard Bank Ltd. 96 9 10
Southeast Bank Ltd. 96 9 10
Social Islami Bank Ltd. 96 10 9
Shahjalal Islami Bank Ltd. 96 7 12
Exim Bank Ltd. 96 10 9
First Security Islami Bank Ltd. 96 8 11
Islami Bank Ltd. 96 11 8
Pubali Bank Ltd. 96 11 8
Source: CSR report in Bangladesh by Yunus, Kabir and Khan

The study in table shows the total CSR activities of sixteen sample banks. Among the sixteen
banks DBBL is clearly ahead than others with a disclosure score of 35 out of 96. Mercantile
bank is in the second position with a score of 26 while Jamuna bank scored 25 to secure the
third position. Shahjalal Islami Bank is in the last position by performing and disclosing only
7 items out of total 96 CSR items considered in this study to formulate CSR index. Most of the
other banks failed to perform and disclose CSR activities to a satisfactory level.

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 CSR Activities of MBL

Graphical Presentation of CSR performance of different Banks

Score achieved

35
35 26
30 23 22 25
25 20 18
20 11 11
15 8 9 9 10 7 10 8
10
5
0

Score

4.22. Result of the comparison

From the study it is clear that participation of different banks in different areas of CSR
activities is limited. An unweighted index has been prepared where there are 96 items under
the 6 heads of CSR. Most of the banks‟ participations in CSR are limited to 10 to 35. Thus the
highest disclosure is 36.46% while the lowest is 10.41%. Dutch Bangla Bank Limited (DBBL)
has the highest participation (Scored 35 out of 96) in CSR activities, where Mercantile Bank
Limited (MBL) disclosed a total of 26 and placed in the second position whereas Jamuna
Bank Limited (JBL) secured the third position with a disclosure score of 25. Other banks‟
participations are lower to them. Hence, banks‟ CSR performances and related disclosures
are far lower than expected.

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 CSR Activities of MBL

5.0. Findings
 MBL involves in CSR activities as a part of their marketing strategy by contributing
different sectors such as health, education, sports, disaster management, art & culture
and others.
 MBL consider CSR as how companies manage the business processes to produce an
overall positive impact on society and environment. CSR disclosures is not mandatory
in Bangladesh. As it is voluntary in nature, there is no specific guideline to disclose
such activities in the annual report.
 The performance of MBL in CSR sector is better than other bank.
 MBL has stood in the second position of overall CSR performance in Bangladesh.
 Although the MBL’s performance is better than others, overall CSR activities of the
banks are very poor and most importantly contributions in the area of clean water
management, forestation, waste management, and old person‟s homes,
accommodation for the slum dwellers, women‟s rights and anti-dowry practices,
birth control products etc. are totally absent though they have shown better
concentration in education and health related CSR.
6.0. Recommendations
 MBL should focus their CSR activities on education by ensuring proper education
for all.

 Proper channel should be maintained for the best distribution of fund.

 MBL should disburse their fund to the diversified sector for ensuring the proper
management of fund.

 Thus, Bangladesh Security and Exchange Commission (BSEC) should provide a

guideline to be followed to disclose CSR related activities at least for the listed
companies in Bangladesh.

 To motivate the banks to contribute to society government provides tax rebate

facility in limited areas which might be extended further to motivate the banks
to contribute to the neglected areas.

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7.0. Conclusion
Nowadays a Company is no more the sole property of its stockholders; rather it is the
property of the society. So the bank should increase its participation in different areas to
express the society that they it is socially responsible to them.

Bangladesh, as a third world state, has lots of complications. The government frequently
discovers themselves helpless while it approaches to the solution of these difficulties. CSR
has become a standard of generally legitimate corporate effort and the acceptance of its
gradual rises. To motivate the banks to contribute to society government provides tax rebate
facility in limited areas which might be extended further to motivate the banks to contribute
to the neglected areas. Again, banks are mainly dependent on the customers for collecting
fund. So the customers should be more conscious about the CSR of banks and they should
prefer those banks which have higher contributions to CSR.

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8.0. Bibliography

Weygandt, J.J, Kimmel, P.D and Kieso, D.E 2009, "Intermediate Accounting" John Willy &
Sons,Inc, 2011

Choi, John. Seo , An investigation of the initial voluntary environmental disclosures made
in korean semi annual financial reports, Pacific Accounting Review, Vol. 11, No 1, June 1999

Azim M, Ahmed E & Netto DB , “Corporate Social Disclosure in Bangladesh: A Study of the
Financial Sector” International Review of Business Research Papers, Vol. 7. No.2. March
2011, Pp.37-55

Azim, MI, Ahmed S & Islam, MS , “Corporate social reporting practice: evidence from listed
companies in Bangladesh”, Journal of Asia-Pacific Business, vol. 10, No. 2, 2009, Pp. 130-
145

Miyan M Alimullah , “Dynamics of Corporate Social Responsibility – Bangladesh Context”

Journal of AIUB Bangladesh, August, Vol. 3, No. 1, 2006, Pp. 13-32

Alam, SMS, Hoque, SMS & Hosen, MZ 2010, ‘Corporate Social Responsibility of Multi
National Corporations in Bangladesh: A Case study on Grameenphone‟, Journal of
Patuakhali Science and Technology University, vol. 02, no. 01, June, pp. 51-61

Azim, MI, Ahmed, S, & Islam, MS 2009, ‘Corporate Social Reporting Practice: Evidence from
Listed Companies in Bangladesh‟, Journal of Asia-Pacific Business, vol.10, no. 2, pp. 130 –
145

Azim, MI, Ahmed, E, & D'Netto, B 2011, „Corporate Social Disclosure in Bangladesh: A
Study of the Financial Sector‟, International Review of Business Research Papers, vol. 7, no.
2, pp. 37-55.

Bhagwati, J 2010, „Whose Corporate Social Responsibility‟, Economics Time, October 29,
2010

http://assignmentpapers.blogspot.com/2010/07/corporate-social-responsibility-
csr.html

http://www.assignmentpoint.com/business/assignment-on-corporate-social-
responsible-activities-of-jamuna-bank-ltd.html

http://www.reportbd.com/articles/989/1/CSR-Activities-of-Islami-Bank-Bangladesh-
Jamuna-Bank-Mercantile-Bank-and-Mutual-Trust-Bank-Ltd-Part-9/Page1.html

http://www.mblbd.com/

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