Corporate social responsibility (CSR) spending by the country’s banks declined by 9.22% in the first half of this year compared to the same period last year. 

According to the latest data from Bangladesh Bank (BB), the 61 banks in the country spent Tk 5.71 billion on CSR from January to June this year, down from Tk 6.29 billion in the corresponding period last year.

The main reason cited for this reduction is the slow growth in profits due to the ongoing economic crisis. During the first half of this year, profits of 35 listed banks in Bangladesh decreased by 9% year-on-year, totaling Tk 41.60 billion.

Banks are currently facing several challenges, including high non-performing loans (NPLs), a shortage of liquidity, and a lack of corporate governance, all of which have contributed to the decrease in CSR spending.

As of March this year, NPLs amounted to Tk 1,316.20 billion, or 8.80% of the total disbursed loans, reflecting a 16.02% year-on-year increase, according to BB data.

Dutch-Bangla Bank was the leader in CSR expenditure for the first half of this year, spending Tk 613.2 million. 

This bank spent Tk 390 million on CSR during the same period last year. 

In contrast, Islami Bank Bangladesh spent only Tk 460 million on CSR-related expenses this year, compared to Tk 2.02 billion spent last year, which was the highest among all banks.

Other banks that contributed to CSR initiatives include Al-Arafah Islami Bank (Tk 420 million), Shahjalal Islami Bank (Tk 380 million), Jamuna Bank (Tk 380 million), Mercantile Bank (Tk 350 million), United Commercial Bank (Tk 300 million), and Exim Bank (Tk 280 million).

However, ten banks have not allocated any funds to CSR initiatives due to their deteriorating financial health.

Banks primarily channeled their CSR funds into education, healthcare, disaster management, and climate change adaptation, aligning with central bank guidelines. These guidelines dictate that banks should allocate 30% of their CSR funds to education, 30% to healthcare, and 20% to disaster management and climate change adaptation. 

In the first half of this year, banks invested Tk 2.16 billion in the healthcare sector, Tk 900 million in education, and Tk 490 million in disaster management and climate change adaptation. The remaining Tk 2.14 billion was used for other sectors, according to BB data.