RELATION OF PROFITABILITY OF COMMERCIAL BANK’S ON CORPORATE SOCIAL RESPONSIBILITY AN INDIAN PERSPECTIVE (original) (raw)
In this study we will analyze the corporate social responsibility (CSR) activities carried out by Indian commercial banks according to their size and profitability. The study is based on the secondary data taken from the annual reports of the banks for the year 2009-10 to 2013-14. The analysis will be done on the basis of patterns of expenditure by major firms then we move on to analyze the expenditure of various commercial banks according to their size and profitability. The analysis shows that though the Indian banks have woken up late but they have geared themselves up to the challenges of CSR requirements. In the CSR sphere some of the Banks are doing excellent work however, some bank's performance need much to be done. The banks with big balance sheet size and better geographical presence tend to diversify in their CSR activities. Smaller banks due to size and geographical constraints spend on CSR accordingly. It is observed that spending on CSR by relationship oriented organizations depends more on customer retention as well image building. The public sector banks have overall highest contribution in CSR activities. Private sector banks and foreign banks are still lagging in this area. As banks see it as a strategy to reach out to their current as well as targeted customers they can formulate their CSR policies accordingly. However, smaller banks can take the CSR route to increase their customer base and also make a positive impact in the minds of people about their brand.. Though all the concerns of social responsibility are projected as a social welfare initiative, they also carry a profit motive which may not yield results in the short term, but would definitely do so in long run. Today, the social responsibility initiatives of organizations are showcased through various awards and publicity. One important question that always attracts the attention of the public is, whether or not the motive behind such concerns is indeed sacrosanct. The study has a scope of further research where the CSR performance of banks can be related to better image building and deep trust between banks and customers. The further scope can also lead to differentiation between the concepts of only welfare minded CSR which undermines the real profit maximization motives of business houses. Keywords: Commercial banks, corporate social responsibility, Profitability, Public Sector Banks, CSR Performance.
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