The corporate social responsibility initiatives of the private commercial banking sector with special reference to Islamic banking in Bangladesh: An evaluation

Abstract

The globally-booming Islamic banking is making strides and gaining popularity in Bangladesh, with experts predicting that the Shariah compliant industry will continue in steady steps to become the mainstream banking system in Muslim South Asian nation. The evolution of Shariah based profit–loss sharing centered Islamic banking, worldwide has changed the thought of financial institutions even of the developed countries in the west. On the other hand the recognition of the importance of corporate social activities in the business organizations as well as in financial institutions has accelerated the significance of Islamic banks as in Islam these CSR practice have been emphasized in different ways. Likewise the Islamic financial institutions all over the world, Islamic banks in Bangladesh are also being engaged in various social activities as a part of their responsibilities. In this study it has been tried to find out whether the Islamic Banks of Bangladesh are adhering to the prescribed forms of the CSR activities or not. This paper is mainly designed based on the CSR forms to be followed by Islamic banks under the light of Islamic Shariah. The research found compliance to the mandatory forms by the 8 full-fledged sample Islamic banks in Bangladesh whereas variety in involvement in recommended forms of CSR activities by considering the scenario of banks from2009 to 2013. The study also finds a strong positive correlation between CSR expenditure and sample banks’ deposit, loan and profitability.