A Comparative Study of CSR Practices of Islami Shariah Based PCBs and Conventional PCBs in Bangladesh
DOI:
https://doi.org/10.13135/2421-2172/3831Keywords:
Islamic Finance, Corporate Social Responsibility, Islami Shariah Based Private commercial Banks, Conventional Private commercial Banks.Abstract
CSR is an obligation of corporate entity towards society for social development. The term was coined during 1950s and mostly practiced by developed countries so far. For least developed countries like Bangladesh, the practice of CSR wasn’t so popular before 1980s, in the years of 2016, Bangladesh ranked 31st largest economy, and in 2019 it ranked as 5th fastest growing economy around the world. With such exponential growth of Bangladesh economy, the private sector is currently booming with enormous potentiality, especially the banking industry. Following the drastic change of economy, Bangladesh government has declared 10% tax rebate on CSR activities to promote social development. The banking industry of Bangladesh is mainly dominated by two types of private commercial banks (PCBs), Conventional and Islami Shariah Based banks. The objective of this study is to find out the trends and preferences for CSR investment area of each bank type. The study was conducted by using secondary source of data, which was collected over the duration of 4 years (2015-2018). Online version of annual reports, CSR reports and journal were used in this study. Quantitative analysis method was used to find out the heavily and narrowly invested CSR areas. The study reveals that the both Islami Shariah Based PCBs and conventional PCBs invest heavily on 3 common areas (Disaster management, Education and Health) and narrowly invest on areas Sports, Arts-literature & culture and Environment, this study also indicates that Islami Shariah Based PCBs have significant higher CSR expenditure than conventional PCBs on prescribed CSR areas.
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