Friday, August 6, 2021

Banks do more CSR than NRB requirement

Kathmandu, Aug 3

Banks and Financial Institutions (BFIs) in Nepal have mobilised more resources to the Corporate Social Responsibility (CSR) than the limit set by the Nepal Rastra Bank.

A recent study by the NRB has found that the BFIs mobilised about 1.58 per cent of the net profit in the Fiscal Year 2019/20 for the CSR activities and programmes while the central bank’s provision is 1 per cent of the profit. They have deposited the money in their CSR Fund.

Class ‘A’ commercial banks have deposited 1.54 per cent of their profits to the fund, Class ‘B’ development banks 1.55 per cent and Class ‘C’ finance companies 1.66 per cent while Class ‘D’ microfinance institutions have separated 2.01 per cent of their profits for the CSR.

The central bank has conducted an online survey on ‘CSR in Nepalese banking industry’ from  November 5 to  December11, 2020 with the objective of finding the reality of CSR exercise and status of the implementation of NRB’s directives.

The study found that the BFIs participating in the survey said that they conducted CSR with the purpose of image building of the respective company. About 85 per cent of the companies have their CSR policy and 51 per cent formulate an annual plan for the same.

However, the CSR expenditures do not have the provincial balance, more than two-thirds of the fund is utilised in Bagmati province.

Four years ago, only 35 per cent commercial banks have mentioned the sectorial expenditures of the CSR in their annual reports while the number increased to 38 per cent last year. Only 30.08 per cent BFIs have mentioned the province-wise expenditures.

The central bank said that clear guideline and directive was needed to make the CSR expenditures more balanced and transparent. 

Published in The Rising Nepal daily on 4 August 2021. 

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