Banks' H1 CSR spending drops 51pc

Corporate social responsibility (CSR) expenditure of banks fell by nearly 51 per cent in the first half (H1) of 2025 compared to the previous half (July-December 2024), according to Bangladesh Bank (BB) data.

During the January-June period, banks spent over Tk 1.50 billion on CSR activities, while the expenditure had stood at nearly Tk 3.07 billion during the preceding half year, marking a decline of about Tk 1.57 billion.

According to the latest data of the central bank, scheduled banks channelled most of their funds into disaster management.

A sector-wise breakdown shows that banks spent Tk 342.5 million (22.75 per cent) in education, Tk 281.2 million (18.67 per cent) in health, and Tk 52.1 million (3.46 per cent) in environment and climate change mitigation and adaptation. The largest share, Tk 829.9 million (55.12 per cent), went to "other sectors."

Under this "other sectors" category, disaster management alone accounted for Tk 751 million, representing nearly half (49.88 per cent) of total CSR expenditure. Banks also spent Tk 40.8 million in miscellaneous areas, Tk 36.4 million in sports and culture, Tk 0.9 million in infrastructure development, and Tk 0.8 million in income-generating activities. Education emerged as the second-largest CSR sector, with banks providing scholarships, learning materials, and support for educational infrastructure.

Sector insiders said most of the disaster management funds were used for distributing blankets to cold-hit and poor people in northern districts.

Syed Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank PLC (MTB), noted that a significant portion of CSR funds in the recent period was channelled to the office of former ousted Prime Minister Sheikh Hasina. "Spending by some banks, including Islamic banks, declined sharply, contributing to the overall drop in CSR expenditure," he said.

Mr Rahman emphasised that private sector credit growth is crucial for CSR funds to reach expected levels. "The turnaround of the economy is key to boosting CSR contributions," he said. He further urged the government to focus on energy security, infrastructure development, and other critical areas, while acknowledging steps by both the government and the central bank to ease inflation, which could positively influence CSR spending in the near term.

Among the country's six state-owned commercial banks, only three reported CSR spending, amounting to Tk 10.1 million (0.67 per cent of total CSR spending). Three specialised banks together spent Tk 0.2 million (0.01 per cent).

In contrast, private commercial banks dominated CSR contributions. Out of 43 private banks, 36 spent Tk 1.41 billion, accounting for 94.01 per cent of total CSR expenditure. On the other hand, eight out of nine foreign commercial banks spent Tk 79.9 million (5.30 per cent) during the period.

In the first half of 2025, the total CSR expenditure by 10 Islamic banks amounted to Tk 366.7 million, accounting for about 24.36 per cent of the banking sector's total CSR spending.

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