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Corporate Social Responsibility In the Banking Sector
Corporate Social Responsibility In the Banking Sector
Updated on Dec. 15, 2022, 1:02 p.m.
We can remove lot of restrictions taking place in our economy through a free trade and restriction free markets. The CSR always allows the business to use their strength in order to offer power to the citizens in a systematic manner.
Banking is one of the major segments in India and gave lot of vitality towards achieving the welfare scenario known as the Pareto Optimum.
Furthermore, the Corporate Social Responsibility CSR, is the main mantra and the tantra to allow each individual to invest the hard-earned money with awesome results, so that people will benefit in the long run.
What is Corporate Social Responsibility?
To be honest, there is no centralised or universal definition of the CSR or the Corporate Social Responsibility. This is gaining prominence in the banking segment in India.
This can be described as one of the major instruments, or a business model or an enterprise, encouraging the banks and financial establishments to have a fundamental change in the attitude of the people.
The attitude and focus will shift from financial modalities and returns on the investments to the process of protection of the interest of the people and promotion of the welfare along with profit maximisation.
This concept revolves around the community of people functioning in a natural and social environment. The banking has not been open to accepting the CSR principles in the past, however after 1990 they have it responded to CSR by giving a new meaning wherein they will legalise and develop economy of various segments along with personification of the business concepts.
Components of the banks consists of Banks, Shareholders, Top management, Owners, Managers, Regulators, Employees and the Depositors as well. The major aspect of Banking segment is that it affects a large number of people.
The CSR practices of the banking segment is also very different where in it consists of components like
- Philanthropy
- Legal Responsibility
- Ethical Responsibility
- Economic Responsibility
Banks play a major role in moulding the society and they have direct impact on the environment.
Furthermore, this is done in the form of donating financial help to Small Companies, Orphanages, Hospitals, Educational Institutions Like Schools, Colleges and Universities, assisting in setting up Research centres, creating awareness against AIDS, Corona, Road Accidents, Eliminating Poverty, Unemployment drives, offering vehicles to police and ambulances to hospitals and others.
Role Played by Banks in CSR
There are various activities played by the banks in relation to assisting the people in the field of Corporate Social Responsibilities and they are given below as follows:
- Economic Responsibilities: The banking segment will have a major role in developing the economy of India by protecting various sectors like Power, Transport, Logistics, Defence, Fashion, Pharmacy, Technology, IT, Fishing, Iron and Steel, Agriculture, Retail, Warehouses, Manufacturing, Services and others. Enhanced financial assistance is the need of the hour and they create new chances for Risk management and systematic management of the resources. Furthermore, Using the Corporate Social Responsibility, you can go ahead and build trust with your esteemed customers through undertaking initiatives given below like:
- Financing literacy drive in schools.
- Offering clean water to the locals.
- Providing financial assistance to NGO.
- Giving vehicle to police and hospitals.
- Setting up the vaccination camps for all.
- Protection to the physically handicapped.
- Opening account for the under privileged.
- Supporting the arts culture and scientific goals.
- Providing the self-employment training to locals.
- Development of new bus shelters in your locality.
- Advanced medical equipment to health care institutions.
- Financial assistance for the day care/Senior Citizen homes.
- Legal Responsibilities: The financial institutions and banks will have some legal roles to play and this is done to protect the interest of the customers and promote their welfare. Most of the rules and statues are brought in order to ensure safety and confidence in the financial structure of our nation. The best example is the Data Protection Act, where in there are various subsidiary bodies, and the trade association coming under this parameter. The core function will be to prevent any data leakages and other valuable data to reach the strangers.
- Effective Customer Outreach: The process of reaching customers can be done by undertaking many awareness programs, drives, community events and others in a methodical manner. Effective social engagement will play a major role in enhancing the image of the people, how people understand that establishments, smoother interaction and feedbacks and others.
If you look at companies offering local food items to the food bank to feed the needy then are considered to be more ethical and humane than those who do nothing. Banks and financial institution like Axis, HDFC are undertaking lot of efforts ranging from Dry waste collections, Distribution of aids to poor, financial help to children of poorer families, Literacy Drives, Blood Donation camps and others.
Examples of Corporate Social Responsibility
Some of the examples of the Corporate Social Responsibilities are as follows:
- Canara Bank is providing free food and education services to unemployed youths and school drop outs, Women Empowerment, Education and others.
- ICICI Bank is offering free healthcare, eradicating hunger and stressing on sanitations to the Swatchh Bharat Kosh.
- SBI has launched the SBI Grama Seva to empower more than 10 lakhs villages in India and protect the differently abled.
- AXIS Bank has come forward in getting rid of paper work and save the trees campaign sponsored by Axis Foundation.
- HDFC Bank has come up with the program of Skill Development and Enhancement program sponsored by Parivarthan, a wing of the HDFC Bank.
Benefits of the Corporate Social Responsibility
Some of the benefits of the Corporate Social Responsibilities are given below as follows:
- The CSR encourages business houses to use their strength to help the local communities.
- Spreading the CSR will encourage business houses and banks to minimise loss and maximise the returns.
- This initiative plays a major role in boosting the functioning of the organisation and make it productive in nature.
- You will develop an amazing ability to retain the staff and nurture them.
- The CSR programme plays a pivotal role in enhancing the customer retention and loyalty.
- This initiative plays a major role in supporting the local and global communities in our nation.
- This helps in getting rid of Money Laundering, Corruption and other financial terrorism.
- Under this scheme, the banks and financial institution will experience their personal and professional growth patterns.
- A good Corporate Social Responsibility will play a major role in mitigating the risks and also avoid trouble some situations.
To be honest all the banks, Public or Private must come forward and engage with the people in key areas like Education, Removal of Malnutrition, Organ and Blood Donation, Skill Development Drives to make India self-reliant, after 75 years of independence and make a difference.
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