Rupali Bank Ltd. Final Report

Introduction

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1.1 Origin of the report: As a student of the BBA Program at School of Business, Department of Finance, Asian University of Bangladesh, every student has to conduct a practical orientation in any organization for fulfilling the requirements of the 3 months Internship Program. The BBA program mainly focuses on the theoretical aspects of the business practices. The Internship program is intended to provide a student the opportunity to practice his/her knowledge of theory in the field of practical life. This report is based on my internship experience at Rupali Bank Limited.

1.2 Rationale of the study: In order to fulfill the requirement of the Internship program I chose Rupali Bank Limited. The Human Resource Division (HRD) of Rupali Bank Limited placed me to its Uttara Model Town Corporate Branch.The topic of my report is “An Evaluation of the Corporate Social Responsibility Practices in Rupali Bank Limited”. During this period I tried to get familiarize myself with the theoretical concept and practical process of Banking Activities and CSR practices in Rupali Bank Limited.

1.3 Objectives of the report: There are two types of objectives of the report. One is primary objective and the other is Secondary objective.

Primary Objective: The primary objective of this report is to use the theoretical concepts, gained in the classroom situations, in analyzing real life scenarios. This is also a partial requirement of the BBA program. This objective is basically met by remaining attached with a reputed organization and by gaining some real life experiences, so that it adds value to the knowledge base of me.

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Secondary Objectives: The Secondary objectives of this Study are as follows: • To observe and understand the activities of the different departments of the host organization: Rupali Bank Limited (RBL) • To determine the nature and extent of CSR practices in RBL. • To provide a thorough understanding of the CSR reporting by RBL in compliance with the Bangladesh Bank Guidelines. • To assess the need of proper CSR disclosures. • To assess the need to improve CSR activities of RBL. • To provide suggestions to ensure better CSR practices in RBL.

1.4 Scope of the study: Since the selected topic of my report is “An Evaluation of the Corporate Social Responsibility Practices in Rupali Bank Limited”, I have got the opportunity to collect different documents relating to activities of RBL and its CSR initiatives. Though I was placed to Uttara Model Town Corporate Branch, the officials of Central Accounts Division (CAD) of Head Office who are responsible for CSR reporting and disclosure about CSR practices helped me to prepare a constructive report by providing relevant paper and files for which I was highly encouraged. Besides this I have faced many difficulties to prepare a report on this topic. To prepare this report it requires much time, much contacts, careful attention and huge study.

1.5 Methodology of the study: To prepare the report, I have collected data from the primary and secondary sources. Data have been collected by oral interviewing the responsible officers. They also gave me annual report, annual budget of CSR and other documents. After collecting data from the interview and material, the data was first carefully scrutinized. Then the data was organized as required. In order to make the study effective and efficient, following two sources of data and information have been used widely.

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Sources of Data

Primary Sources . Face

Secondary sources

to face conversation with the

head

of

the

CAD

Division,

 Annual report of the RBL and Bangladesh Bank.

respective officers and Staff of

 Annual Budget of the RBL.

RBL.

 Various document of the RBL.

 Relevant document’s studies as provided

by

the

officers

concerned.  Observation of CAD Division of RBL.

 Extensive literature search on the basis of these documents of publication.  Web site of NBR, Bangladesh Bank and RBL.

 Discussion with my supervising teacher.

 Circulars

and

reviews

of

Bangladesh Bank  Newspaper, journal, articles etc.

1.6 Limitation of the study: Though the report was prepared with highest level of dedication and sincerity, still it is not free from some drawbacks, like: 

Time is a major obstacle here. It was very difficult for me to go through

everything while preparing the report. Much information was overlooked though it was not the intension. 

Employees in the bank are immensely busy all the time with clients.

Sometimes it is tough for them to find a break and provide assistance from their busy schedule even if they are willing to. 

Confidentiality is a major factor. Much information is not allowed to be

given as it is a matter of secrecy. Any kind of misplacement of any information can cause the bank to face difficulties. Information if disclosed to the competitors, the bank can lose its competitive advantage.

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 Lack of primary and secondary data is another limitation.  Lack of sufficient previous year’s information in an organized way is also an

obstacle.

5

Literature Review

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2.1 Definition of CSR

CSR can be understood in terms of corporate responsibility, but with greater stress upon the obligations a company has to the community, particularly with respect to charitable activities and environmental stewardship. “Social responsibility (is the) responsibility of an organisation for the impacts of its decisions and activities on society and the environment through transparent and ethical behaviour that is consistent with sustainable development and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated throughout the organisation.” (Working definition, ISO 26000 Working Group on Social Responsibility, Sydney, February 2007) A key point to note is that CSR is an evolving concept that currently does not have a universally accepted definition. Generally, CSR is understood to be the way firms integrate social, environmental and economic concerns into their values, culture, decision making, strategy and operations in a transparent and accountable manner and thereby establish better practices within the firm, create wealth and improve society. The concept and business awareness of CSR has evolved considerably since it first emerged in the 1950s (de Bakker et al., 2005). Over this time, the concept has developed from relatively uncoordinated and voluntary practices into more explicit commitments in response to stakeholder pressures and eventually into ongoing future commitments. With these changing perspectives of CSR a significant body of literature has been produced but the problems of definition remain (Clarkson, 1995). Due to the difficulties in defining CSR, alternative conceptualizations have been developed, representing various aspects of the same concept of corporate “doing good”. : CSR is a stakeholder-oriented concept that extends beyond the boundaries of the organization, driven from an ethical understanding of the responsibility of the organization for the impact of its business activities, seeking in return the willingness of

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society to accept the legitimacy of the business (based on Gray, Owen, & Adams, 1996).

2.2 Stakeholders: Stakeholders may be defined as ‘‘those groups who have a stake in or a claim on the firm’’ (Freeman, 1984, p. 54) or alternatively as ‘‘groups and individuals the concept of stakeholders is central to CSR who can affect, the achievement of an organization’s mission or affected by’’ (Evan and Freeman, 1988, p. 97). CSR can involve a wide range of stakeholders:

Source: http://strategis.ic.gc.ca/epic/site/csr-rse.nsf/vwapj/stakeholder.txt/$FILE/stakeholder.txt

Critical eye on corporate actors or furthermore, include all those entities that maintain and the stakeholder concept may extend to a wider perspective (Bomann-Larsen and Wiggen, 2004). The expectations of society and Ambitions of the organization and Stakeholders, thus, form the link between the aims (Whetten et al., 2002). Organization success and survival hinges on the organization’s ability to generate sufficient wealth stakeholder theory also emphasizes that, value for its primary stakeholders, though not exclusively for shareholders or satisfaction (Clarkson, 1988). For example, Post et al. (1996) for the organization to realize or services for customers to be the primary stakeholders or consider those whose direct relationships are essential its mission in producing goods. Political actors who support the mission by providing

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their tacit approval of the organization’s activities and thereby making them acceptable and giving the business credibility by including social secondary stakeholders. Local communities, governments, and nongovernmental organizations such secondary stakeholders may include (NGOs).

2.3 Schools of thoughts in CSR Based on two shared ideas most definitions of CSR: (1) these responsibilities apply not only to shareholders but also to stakeholders, in other words, everyone who has a stake in the company's actions and (2) companies have responsibilities that go well beyond profit-seeking (economic responsibilities) or merely complying with the law (legal responsibilities); (Freeman, 1984). Another

assumption

starting

the

Milton

Friedman

instruct who

can

draw

the consideration process correct reverse to Adam Smith's determining The prosperity of countries will direct to the "imperceptible hand" that directs business to supply broader civilization with the merchandise and working people require. Others, commencing the contradictory end of the theoretical range, would dispute that undertaking "good" is merely the exact mania to do (Strategic Direction. 2008). would take the view that customer relations were best served if it simply posted a profit. (Gande, Fortanier and Tulder, 2009).

2.4 Corporate Social Reporting in Emerging Economies: Historically, the study of corporate social responsibility (CSR) reporting has largely been within the context of Western economies. Most of the CSR studies in emerging economies have concentrated on the Asia-Pacific and African regions. Most of these studies are descriptive in nature, used content analysis method and measured the extent and volume of disclosures contained within the annual reports. Moreover, most of these studies provide indirect explanation of the reasons behind CSR.

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However, many large corporations now claim to be taking steps to improve their environmental and social performance within developing countries. Dr Ataur Rahman Belal, Aston Business School, Aston University, UK, using the lens of stakeholder theory, in his book ‘Corporate Social Reporting (CSR) in Emerging Economies: A Review and Future Direction’ (2009) examined whether the current practice of CSR reporting in developing countries is motivated by a desire to discharge accountability to all relevant stakeholders or whether it is being driven by the imperative of advancing corporate economic interests. The author considered the current CSR reporting practices in a number of developing countries, with particular attention given to illuminating a case study of Bangladesh. He made theoretical considerations within the context of Bangladesh and an analysis of social disclosures by Bangladeshi companies with managerial perceptions of CSR reporting in Bangladesh and in other developing countries. .This was the first review of CSR studies purely from the emerging economy perspective. On the basis of this analysis the present authors suggested some important future research questions. In addition, it provided a ‘one stop service’ to the existing and future researchers undertaking CSR research from the emerging economy perspective without re-inventing the wheels.

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Guide Lines & Policy Support Regarding CSR

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3.1 Role of Bangladesh Bank to formulate policy in encouraging CSR practice: Bangladesh Bank (BB) monitors CSR practices of Banks and financial institutions considering an additional dimension of their management performance. BB has taken initiatives to formalize CSR on June 01, 2008. Banks can make CSR contribution through its core business activities, diversity efforts, volunteerism, health care, sports, environment, creation of social awareness, rehabilitation of distressed people to mitigate human sufferings. These are some of the major areas where banks and other financial institutions carry out social and philanthropic activities. CSR practice can be made by banks and financial institutions in their own internal operations. Banks can contribute in major CSR activities by speeding up financial inclusion of the socially disadvantaged group. BB has suggests some areas where banks can make CSR contribution as financial inclusion discussed following: -Self-employment credit and Small and Medium Enterprise (SME) lending programs, taken up solo or in association with locally active Micro Finance Institutions (MFIs), designed to create productive new on-farm / off-farm employment, such initiatives are of particularly urgency for regions with endemic high seasonal unemployment; -Financing programs for installation of biomass processing plants (e.g. biogas plants), solar panels in rural households, for waste recycling plants in locations populated by urban poor, and for Effluent Treatment Plants (ETPs) in manufacturing establishments; -Credit programs for diversified production of crops, oilseeds, spices, vegetables, fruits etc. by rural households, financing the growers directly or through suitable intermediaries in the value chain. Credit support for combinations of farming activities ( like co-production of a minor crop with a major one, fish/duck farming with aman rice of deepwater variety in low lying fields), may also be well worthwhile; -Mobile phone based/local MFI outlet supported programs promptly delivering remittances from migrant workers to recipients in remote rural households; programs for card based/ mobile phone based delivery of financial services to households; -Financing programs supporting folk crafts, folk musical and performing arts, aimed at promoting domestic tourism and markets in cultural products/events besides income and employment for the population groups involved. [DOS CircularNo.01, June1, 2008] 12

3.2 Green Banking in Bangladesh: The state of the environment in Bangladesh is rapidly deteriorating. In order to protect environmental degradation and ensure sustainable banking practices in Bangladesh, an indicative Green Banking Policy and Strategy framework for banks has been developed by Bangladesh Bank (BB). A Green Bank is an ethical bank, a socially responsible bank or a sustainable bank efficient in using water, light, air, energy and resources. Green Banking means providing innovative green products by the green banks that cover financial services to support the activities that are not hazardous to environment and help conserve the environment. Green finance contributes to the transition to resource-efficient and low carbon industries i.e. green industry and green economy in general. Green banking products are those that help create a favorable impact on environment. The banking sector can play a significant role in protecting the environment by financing support to high impact environmentally sensitive sectors. Banks, by using their commercial lending and securities underwriting, are in a position to catalyze the necessary transition to an economy that minimizes air pollution, relies on energy efficiency and low/no carbon energy sources. BB previously advised banks to provide their clients with utmost assistance when opening Letters of Credit (L/C) for the installation of Effluent Treatment Plants (ETP) in industrial units; financing solar energy, bio-gas and ETP; complying with the guidelines on Corporate Social Responsibility (CSR) (banks have been asked to concentrate on linking CSR at their highest corporate level for ingraining environmentally and socially responsible practices) and engaging with borrowers in scrutinizing environmental and social impacts. Banks have been brought under the purview of e-commerce with a view to providing the customers with online-banking facilities including payments of utility bills; money transfers and transactions in local currency through the internet. BB has launched a refinance programme of Taka 2.00 billion for bio-gas plant, solar power plant, ETP and Hybrid Hoffman Kiln (HHK) in brick fields.

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Considering the adverse effects of climate change, banks have been advised to be cautious about the impacts of natural disasters and encourage farmers to cultivate salinity resistant crops in salty areas, water resistant crops in the waterlogged and floodprone areas, drought resistant crops in drought prone areas. They should also be encouraged to use surface water instead of underground water for irrigation, organic fertilizer and natural insecticides instead of chemical fertilizer and pesticides. Banks in Bangladesh are required to implement Green Banking activities through the following three phases:

Source: Bangladesh Bank Annual Report, 2010-2011 Banks have been advised to submit the first ever quarterly report of their green banking initiatives/practices under the Phase-I programme on 30 June2011basis with 15 July 2011 and reports of the subsequent quarters within 15 days of the respective quarter's end. Banks shall report on the initiatives/practices to BB and disclose information on their websites as well. Preferential treatments for Compliant Banks have been taken into consideration. BB will award points to banks on the criteria of "management" while computing CAMELS rating where there will ultimately be a positive impact on overall rating of a bank. BB will declare the names of the top ten banks for their overall performance in green banking activities on the BB website. BB will actively consider green banking

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activities/practices of a bank while according permission for opening new bank branches. SME/Agriculture bank branches to be established/ opened after 20 June 2011 will be required to be eco-friendly ensuring that a solar panel is installed at the branch. [Bangladesh Bank Annul report, 2010-2011]

3.3 Tax Rebate on Corporate Social Responsibility (CSR) Activities: Tax concession indicates that the Government sacrifices the amount which could be earned as revenue. A corporate entity was given a tax rebate at the rate of 10% of CSR (Corporate Social Responsibilities) expenditures. For example, if a company has a taxable profit of Tk. 1000000/- and the company is subject to 40 percent of tax, then its tax liability would be Tk. 400000. If the company’s CSR expenditure is Tk. 100000/-, then it would be get a rebate of Tk. 10000/- (10 percent of Tk. 100000/-).Therefore, the company’s tax liability would be Tk. 390000/- ( Tk. 400000/- Tk. 10000/-). There was no ceiling of CSR expenditure in AY2010-2011. Now the ceiling has been fixed at Tk. 8 crore or 20% of total income, whichever is lower. 3.3.1 List of CSR Activities: AY 2011-2012 [new SRO No. 229-Ain/Aykar/2011, dated 04.7.2011 u/s 44(4)(b)] (1)

Donations for redressing the hardships caused by natural calamities such as cyclone, earthquake, tidal wave and flood channelled through Government organizations;

(2)

Donations to organizations engaged in establishment and management of old persons’ homes;

(3)

Donations to organizations engaged in the welfare of mentally or physically handicapped;

(4)

Donations to educational institutions run for the purpose of education of rootless children;

(5)

Donations to organizations engaged in projects on accommodation for the slumdwellers;

(6)

Donations to social organizations engaged in publicity of movements relating to women’s rights and anti-dowry practices; 15

(7)

Donations to organizations engaged in feeding and clothing and sheltering and rehabilitation of orphan/rootless children;

(8)

Donations to organizations engaged in research on independence war, regaining and expansion of the consciousness of the independence war and the act of honourable living of the freedom fighters;

(9)

Donations to organizations engaged in healthsome sanitation in Chittagong Hill Tracts, char1 areas and areas surrounding breaking up of banks of river;

(10) Grants to organizations engaged in treating cleft lips, cataract, cancer and leprosy; (11)

Grants to organizations engaged in treating acid victims;

(12) Donations to hospitals engaged in providing free medical treatment to poor patients and specialized for developing the quality of treatment, such as cancer, liver, kidney, thalassemia, eye and cardio; (13) Grants to Public Universities; (14) Expenditure incurred through educational institutions recognized by Government for providing technical and vocational education for meritorious poor students; (15) Money invested in establishing lab for providing training on computer or information technology and in establishing infrastructure or in purchasing educational materials for implementing English education in public/private educational institutions (under Monthly Pay Order or MPO); (16) Donations to organizations engaged in providing technical and vocational training to unskilled or semi-skilled labour for export of human resources; (17) Donations to organizations involved with infrastructure of sports and provision of training at national level.

1

A strip of sandy land rising out of the bed of a river or a sea above the water-level,

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3.3.2 New CSR Activities inserted under SRO No. 229-Ain/Aykar/2011, dated 04.7.2011: (18) Donation to national level institution set up in memory of the liberation war; (19) Donation to national level institution set up in memory of Father of the Nation; and (20) Donation to Prime Minister’s Higher Education Fund. 3.3.3 CSR Activities withdrawn by SRO No. 229-Ain/Aykar/2011, dated 04.7.2011: However, five areas for CSR (allowed under SRO No. 270-Ain/Aykar/2010, dated 01.7.2010) for AY 2010-2011 have been withdrawn: (1)

Donations to organizations engaged in clean water management;

(2)

Donations to organizations engaged in afforestation;

(3)

Donations to organizations engaged in beautification of cities;

(4)

Donations to organizations engaged in waste management; and

(5)

Donations to organizations distributing freely at the level of use of birth-control products with a view to solving the population problem and to conduct camps for voluntary sterilization.

3.3.4 Conditions for Tax Rebate on CSR Expenditures: The conditions for this tax rebate are: (1)

The company which will be willing or motivated to obtain tax rebate through CSR activities: (a) shall have to pay regular salary and allowances to officers and employees worked and shall have arrangement of waste treatment plant in the factories operated by it, particularly in case of production of industrial products; (b) shall pay income tax, value added tax (VAT) and customs duty regularly. (c) can make donation or provide money within the scope of CSR only to organizations approved by the Government; and (d) shall comply all the provisions existing in the Labour Code.

(2)

The money spent or expenditure incurred on CSR by a corporate entity cannot be treated as allowable expenditures in Production Account, Trading Account or Profit & Loss Account.

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(3)

Necessary evidences in relation to the fact that money claimed for CSR has actually been spent are to be submitted to the concerned Deputy Commissioner of Taxes (DCT).

(4)

The corporate entity shall have to intimate the National Board of Revenue the plan on CSR activities adopted and obtain a certificate on income tax rebate in relation to that.

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An Overview of RBL

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4.1 Background of Rupali bank Limited: The Government of the Peoples Republic of Bangladesh ( GOB) formed Rupali Bank Limited on 26 March, 1972 under the Bangladesh Bank’s Nationalization order of 1972 ( P O number 26 of 1972) by merging the three former Pakistani commercial bank’s i.e. Muslim Commercial Bank Ltd. , Australasia Bank Ltd and Standard Bank Ltd. Those were operating in the then East Pakistan. The bank emerged as a Public Limited Company incorporated under the Companies Act 1913 on December 14, 1986 after taking over and acquiring the undertaking and business of Rupali Bank with all its Assets, Liabilities, Benefits, Rights, Powers, Authorities, Privileges, Borrowings and Obligations of former corporate body. RBL has now become a sate-owned commercial bank (SCB) through its vendor’s agreement dated 15 November 2007.

4.2 Present Business Philosophy: The philosophy of the present management of RBL is to develop the bank into an ideal and unique banking institution. The perception is that RBL should be quite different other privately owned and managed commercial bank operating in Bangladesh. RBL is to grow as a leader in the industry rather a follower. The leadership will be in the area of service; constant effort being made to add new dimension so that the clients can get “something additional” in the matter of services to the commensurate with the needs and the requirements of the country’s growing society and developing economy.

4.3 Vision: RBL’s Vision is to expand loyal customer base by being known as the financial partner of choice that constantly exceeds customer expectations.

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4.4 Mission: RBL’s mission is to: •

Develop long-term relationships that help customers achieve financial success.

•

Offer rewarding career opportunities and cultivate staff commitments.

•

Uphold ethical values and meet its customer’s financial needs in the fastest and most appropriate way and continue innovative works in order to achieve human resource with superior qualities, technological infrastructure and service packages.

4.5 Core Values: * Social Responsibility- care for and contribute to their communities * Performance- measure results and reward achievements * Integrity- uphold trustworthiness and business ethics * Respect- cherish every individual * Innovation- encourage creativity * Teamwork- work together to succeed The first letters of the initial words form “SPIRIT” and carry equal importance.

4.6 Strategic Objectives: •

Develop a customer oriented service culture with special emphasis on customer care and convenience.

•

Increase market shares by following a disciplined growth strategy.

•

Achieve a significant share of deposit and credits from the existing and niche markets.

•

Leverage technology platform and pen scalable systems to achieve costeffective operations, efficient MIS, improved delivery capability and high service standards.

•

Develop innovative products and services that attract targeted customers and market segments.

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•

Maintain a high quality assets portfolio to achieve strong and sustainable returns and to continuously build shareholder’s value.

•

Explore new avenues for growth and profitability, particularly by diversifying loan portfolio through structured finance and expansion of retail and SME financing.

•

Strengthen the bank’s brand recognition.

4.7 Corporate Profile at a glance ( as on 31st December, 2010): Name of the Company : Rupali Bank Limited Chairman

: Ahmed Al Kabir, PhD.

Managing Director

: M.Farid Uddin

Company Secretary

:Md. Shahjahan Khandaker

Legal Status

: Public Limited Company

Date of Incorporation : 14 December 1986 Registered Office

:34, Dilkusha Commercial Area, Dhaka-1000,Bangladesh

Authorized Capital

:TK. 700 Crore

Paid up Capital

: TK. 125 Crore

Reserve & Retained Earnings: TK. 420 Crore

Credit Rating by CRAB (2009): Long Term- BB3 Short Term-ST3 National Support-AAA Number of Employees

: 4503

Number of Branches

: 492

Number of Subsidiary Companies: 01 (Rupali Investment Limited) SWIFT BIC

:RUPBBDDH

Website

:www.rupalibank.org

E-mail

:[email protected]

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[email protected]

4.8 Five Years Performance at a Glance Amount in crore Particulars Financial Performance Interest income Interest expenses Net interest income Non-interest income Non-interest expenses Net-non interest income Profit before provision

2010

2009

2008

2007

2006

555.26 346.28 208.88 270.10 234.30 35.80 244.68

497.86 323.88 173.98 226.37 190.48 35.89 209.87

409.06 308.05 101.01 175.91 162.41 13.50 114.51

342.25 302.29 39.96 392.05 150.63 241.42 281.38

371.92 306.80 65.12 111.93 151.58 (39.65) 25.47

and tax Profit for loans and others 102.11 Profit after provision 142.57

43.02 166.85

27.10 87.41

1383.12 (1,101.74)

11.00 14.47

before tax Provision for tax Profit after tax

166.85

87.41

-1,101.74

14.47

82.54 60.03

-

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Financial Position Authorized capital Paid-up capital Total shareholders’ equity Deposits Borrowings Other liabilities Total liabilities Investments Loans and advances Property, Plant and Equipment Other assets Net current assets Earning assets Total assets Capital Measurement Total risk weighted assets Core capital (Tier-1) Supplementary capital (Tier-2) Total capital Required capital Capital excess/(shortfall) Foreign Exchange Business Export Particulars Import Remittance

700.00 125.00 1415.15 9112.38 26.95 1888.98 11028.30 1571.72 6604.90 952.07

700.00 125.00 (558.18) 7380.34 33.72 1923.26 9337.32 1430.30 5234.42 233.25

700.00 125.00 (816.91) 7028.05 2.33 1924.97 9048.1 1254.57 4903.00 232.33

700.00 125.00 (1054.91) 7244.61 3.01 1872.86 9206.11 1409.06 4708.03 52.98

700.00 125.00 32.87 6783.21 3.74 721.47 7591.19 1206.82 4570.95 51.51

1971.64 563.69 7975.20 12443.45

775.57 667.99 6125.72 8779.14

702.18 (617.10) 5070.81 8231.18

868.2 (1,119.85) 4722.38 8151.20

689.71 (508.24) 5117.92 7624.05

11140.17 8211.27 368.88 (899.83) 686.40 187.15

4907.05 3578.99 (1038.93) (1126.34) 176.4 64.60

4557.88 260.00 36.00

1055.28 1002.62 52.66

(712.68) 656.90 (1369.58)

(862.53) (1061.74) 490.71 357.90 (1353.24) (1419.64)

296.00 410.21 (114.15)

849.00 2010 6024.47 1985.14

745.81 2009 2519.41 2231.17

728.42 2008 2058.97 2164.27

696.00 2006 1484.00 1804.97

639.88 2007 1985.67 1889.43

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Other Information Number of employee Officers Staff Total Number of zonal office Number of corporate office Number

of

3457 1046 4503 25 7

foreign 163

correspondents Number of branches Number of shareholders

492 3578

3148 1381 4529 25 7

2830 1439 4269 25 7

2749 1681 4430 25 7

3006 1747 4753 25 7

160

160

160

160

492 5150

492 5396

492 5358

492 5199

4.9 Management Hierarchy:

Figure: corporate organogram

4.10 Product Line: 4.10.1 Deposit schemes 25

--Savings Deposit --Current Deposit --Short Notice Deposit --Time Deposit --DPS --Rupali Deposit Pension Scheme --Festival Deposit --Call Deposit Interest Rates SL No. 1. 2. 3.

4. 5. *

Types of Deposit Interest Rate per annum Savings Deposit 4.50% Short Notice Deposit 3.50% Time Deposits a) 3 months & above but less than 6 7.50% 7.75% months 8.00% b) 6 months & above but less than 1 year 8.50% c) 1 year & above but less than 2 years d) 2 years & above but less than 3 years Deposit From foreign Remitance 6.00% Rupali Bank Deposit Pension-Scheme 2 6.50%

The rates of interest are changeable from time to time depending upon market competition.

4.10.2 Loans & advances: General Products  Cash credit(Hypothetical)  Cash credit(Pledge)  Overdraft (OD)  Loan against FDR  Loan against Deposit Schemes  Industrial Project Loan (Long & Multi Term)  Short Term Loan  Syndicate Loan

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 Housing Loan-General and commercial  Personal Loan/ professional Loan  House Loan  Self Reliance and special Program Loan  Local bank Guarantee  Loan under Equity Entrepreneurship Fund (EEF)

Small and medium Enterprise Loan (SME)  SHOHOJ  SHULOV  BABOSHAYEE  MAJHARI

Small Enterprise Financing Manufacturing  Fixed Assets Financing  Working Capital Financing

Trading & service  Fixed Assets Financing  Working Capital Financing

Rural and agro credit  Young Farmer’s Loan  Solar-Energy and Bio-Gas Establishment Loan  Fishery Loan  Shrimp Cultivation Loan  Goat/Sheep Rearing Loan

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 Poultry Loan  Dairy Loan  Loan Against Crop Storage in Silos  Small Loan  Micro-Credit  Micro-Credit for the Handicapped  Loan for Tree Plantation  Peas, Bean, Maze and Spices Loan

Other Loans  Bank-NGO Linkage Credit  Loan Against Share/Debenture  Loan Against Brickfield/ Gold Ornaments  Loan for Preservation of Potatoes in the Cold Storage  Transport Loan/Car Loan  Woman Entrepreneur Financing Program  Consumer Credit/Travel Agency and Diagnostic Centre Business Loan

4.11 Branch Network: Rupali Bank has 492 existing branches and some other proposed branches all over the Bangladesh to provide better service to their valuable customers. The present status of the branches network by zone is:

Zone

No.

of

Branches Dhaka Central Dhaka North Dhaka South Chittagong East

21 24 21 27 28

Chittagong West Rajshahi Sylhet Khulna Kushtia Rangpur Dinajpur Comilla Feni Noakhali Narayangonj Mymensingh Jamalpur Barisal Patuakhali Faridpur Bogra Jessore Pabna Tangail

22 22 27 28 7 25 15 23 18 22 13 20 9 26 9 18 28 15 9 9

4.12 Uttara Model Town Corporate Branch of Rupali Bank Limited:

Uttara Model Town Corporate branch of Rupali Bank Limited is a profit earning branch. It was established in12th October, 1988. It is situated at the ground floor of Nawab Habibullah Ideal School Bhaban, Plot no,-02, Shahjalal Avenue,setor-4, Uttara, Dhaka-1230. It is a very important place as the place is becoming a more commercial area day by day.The Branch has 14 Officers of which the Head of the Branch Md.Ketab Ali Mondol is an assistant general manager of Rupali Bank Limited .The Branch has 1 Senior Principal Officers, 2 Principal Officers, 2 Senior Officers and 8 Officers. Also the branch has 3 office assistants and two security guards. The workforce of this branch is very much co-operative both to each other and to the clients.

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4.12.1 Hierarchy of Rupali Bank Limited in Uttara Model Town Corporate Branch: The following is the hierarchy of Uttara Model Town Corporate Branch of Rupali Bank Limited.

The assistant general manager is full for the activities of the bank and accountable for the day-to-day activities of his branch. Under him, the Senior Principal Officer is working. He supervises all the operations of each department. Especially the

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communication process with the Head office is maintained by him. Then two departments have their in-charges, who supervise the activities of respective departments.

4.12.2 Divisions within Uttara Model Town Corporate Branch This branch has two divisions as the following: 1. General Banking (GB) Division & 2. Credit Division

1. General Banking Divisions The main functions of this division are: 

To open & maintain account of customer



To provide local & foreign remittance service



To provide online branch Banking service



To offer different deposit Schemes



To provide other services like- Clearing service, Cash service, Cheque Book Issuance and Stop payment, Deposit encashment, Providing Bank Statement, ATM Service etc.

2. Credit Division This department is responsible for the following jobs:  Meeting the requirements of Head Office and Customers of Credit to cooperate with other departments for smooth operation 

Preparing CIB Statements



Preparing Credit Proposal and Statement



Administration of Retail Credit



Monitor and follow up the loans and advances provided by the bank

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Project Part-CSR Practices in RBL

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5. Corporate Social Responsibility Practices of Rupali Bank Limited: Rupali Bank Limited (RBL) has been playing a pioneering role in implementing social and philanthropic programs to help disadvantaged people of the country. Education, healthcare, human resource development, conservation of nature, creation of social awareness, rehabilitation of distressed people and such other programs to mitigate human sufferings are some of the important areas where the bank carries out its social and philanthropic activities. RBL has devised several special deposit and investment products for the less fortunate segment of the country as part of its CSR activities. The bank has formed a five members CSR committee headed by the Managing Director to oversee the overall activities and management of the CSR fund of the bank. Mainly,RBL renders various services as CSR since 2010. Before 2010, RBL reported in its annual report about their responsibility of performing corporate social obligation, but the bank in genuine sense, has taken initiatives to perform corporate social responsibility since 2010. RBL is keen to the financial inclusion program. As a part of the program the bank is circulated as many as four circulars to its 492 branches in the year 2010. The CSR initiatives reported by RBL for the year 2010 are discussed below:

5.1 Financial Inclusion: Rural Development Program: Rupali Bank provides small loan and micro-credit for the socio-economic development of the country. Loan for the crops like peas, bean, maze and spices at only 2% interest rate is under disbursement in 14 districts through 14 branches of the bank. Bank-NGO Linkage Credit Program was initiated in 2008. Rupali Bank is providing Bank-NGO Linkage Credit Facilities to NGOs like Bureau Bangladesh, TMSS, ARS Bangladesh, Podokhyep, Uddipon etc. Young-farmer credit program has been made operative in order to disburse credit against bank account to those farmers who have obtained “Agricultural Inputs and Assistance Card” and have bank accounts or will open

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accounts in the bank with a view to assisting in their agricultural works. Bank is also disbursing credit in establishing solar-energy and bio gas plant in rural areas. Banking Service for the Disadvantaged Groups and Empowerment of the Poor: RBL has been providing wholesale credit facilities to different micro credit institutions which are in turn lending amongst the poor people in different income generating activities (IGA). Moreover, with 492 branches all over Bangladesh (271 in urban areas and 221 in rural areas), Rupali Bank could reach banking services to the disadvantaged group and encourage them in mobilization of their hard earned savings and creation of investment opportunities for them. Arrangement to open accounts for TK.50.00 is being made for the young males and females with a view to assist them in their efforts in self-employment. Rupali Bank is opening and operating accounts of women labor through REOPA project and accounts of farmers for tk.10.00. Total number of accounts in the category for the TK. 10.00 up to 30 June, 2010 has been 4, 35,794. The accounts under the above mentioned three categories are free of charges. Supporting SME: Rupali Bank Limited Has introduced four SME products named as ‘SHOHOJ’, SHULOV’, ‘BABOISHAYEE’ and ‘MAJHARI’ giving SME the top priority in its loan and advances portfolio. RBL is providing SME loans through all its 492 branches and aims at creating the opportunity of employment for two lac people within two years since the role small and medium enterprises (SMEs ) is indispensable for overall economic development of a developing country like Bangladesh.

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5.2 Social Services: Seventy four branches of RBL are engaged in works relating to the payment of portion of salaries paid by the government to the teachers and employees of registered nongovernment educational institutions including teachers of non-government educational institutions, forty seven branches are involved in payment of scholarship and stipends to the girl students of primary levels and fifty one branches at secondary levels. In addition to these, almost all the branches of Rupali Bank are engaged in work relating to the payment of pension bill to the retired government, civil and military personnel and the receipt of utility bills such as PDB, DESA, REB, WASA, gas and telephone and other service-related work of the government like receipt of Municipal Tax and Land Development Tax, purchase and sale of Prize Bonds, receipt of Hajj money etc. Rupali Bank has been facilitating banking service to the women community through six of its branches in five districts

5.3 Environment: Environment and Green Banking: Rupali Bank Limited is keen to play proper role to save the environment from degradation and has taken this as its prime responsibility. Environment is one of the prime considerations in Rupali Bank’s regular operation and business activity. RBL has made obtaining the clearance from the Department of Environment at a mandatory requirement of the concerned business entity before applying for any loan/advance by the bank. Besides, environment is one of the prime considerations before opening any of its branches. RBL is using a slogan “Plant tree, save the environment” in all its pads and envelops in building awareness among the people. Pursuant to the policy adopted by the government RBL has contributed a lot to “Plant trees and Save environment” Scheme. Effluent treatment plants ( ETPs) in manufacturing establishments especially in dying industries are made mandatory while financing by the bank. RBL is financing in dying industries with ETPs.

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The bank is scrutinizing and assessing the probable adverse impact of any proposed business undertakings by its borrowers on environment as well as on society through its daily banking practice. It is disseminating the valuable environmental know-how to customers, associates and suppliers. The bank is monitoring the conditions imposed by the Department of Environment to be fulfilled by the entrepreneurs in operating the business. A comprehensive green banking policy, separate green banking unit/cell or green banking fund are yet to be adopted, established or approved by Rupali Bank. But the bank is showing general commitment on environment through few of its in-house performance covering Phase-I following Policy Guidelines by Bangladesh Bank to adopt green banking. A general instruction has already been circulated in all 492 branches for efficient use of electricity that supports initiating in-house environment management. Ongoing automation program will help reducing the reliance on printed documents and postage expenses or printing costs as well. Rupali Bank has included solar installation, bio gas and agro-based projects for financing as specialized sector in its SME loan portfolio with 1-2% less interest rate to conform to the spirit of green banking. Environment and Climate Change Risk will be incorporated as part of the existing credit risk methodology complying with the instruction stipulated in the detailed guidelines (expected to be circulated soon) on ‘Environment Risk management(ERM)’ by Bangladesh Bank.

5.4 Making Technology Affordable: Rupali Bank Limited has taken huge initiatives implementing its ongoing automation program to reach the benefits to the customers enabling them to make easy and seamless transaction. Bank is firmly committed to provide tele banking, SMS banking and mobile banking within 2011.

5.5 Staff Welfare:

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RBL provides two special schemes to ensure welfare for its employees. Death Relief Grant Scheme: The Bank operates a Death Relief Grant Scheme. The scheme is applicable to all employees of the bank and payments out of this fund are made to the successors of the employees on their death while in bank’s service. The quantum of payment is determined as per scale and grade of such employees. Retirement Benefit Scheme: The bank operates alternative Retirement Benefit Schemes for its permanent employees, elements of which are as under: 1) Contributory Provident Fund (CPF) Scheme 2) General Provident Fund (GPF) Scheme a) Pension Fund b) General Provident Fund RBL ensures a modern, healthy and safe workplace for its employees through initiating different renovation, modernization and reorganization in its various operations and business activities: •

Adoption of modern human resource management policy in place of conventional personnel management.

•

Adoption strategy of attracting, retaining and motivating the talented people and to look after the people who want to make long-term career with the bank.

•

Encouraging excellence in performance by rewards and recognition.

•

Reorganization of the present framework of RBL to ensure healthy and safe workplace.

•

Imparting improved training and workshops to more than 1000 officers in a year on different areas of banking including Foundation Course on banking, SME and foreign exchange and arranging proper posting for them.

Training facility:

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RBL also arranges for more improved training to a considerable number of talented officers to implement BASEL-2 in accordance with the instruction of Bangladesh Bank aiming at human resources development through augmenting the work efficiency and inspiration of the employees. Assisting various institutions in this regard are RBTI, BIBM, PINNACLE Executive Training Institute and other Rupali Bank Training Institute is being strengthened with infrastructural facilities, up gradation of its course curriculum, introducing the training calendar and by posting the resource persons there •

Renovating the branches with modern decorations and facilities

•

Three years plan for completion of ongoing automation programs and introducing on-line banking with all modern banking products and tools.

•

Introducing a modern and on-line database and creation of very strong and complete database.

•

Updating the bank’s website with all the adequate information regularly.

•

Ensures better healthcare of the employees with the help of two medical consultants at head office and thorough medical checkup facility at discount rate for employees under contract between RBL and Ayesha Memorial Specialized Hospitals (Pvt.) Ltd

5.6 Summary of CSR Activities initiated by Rupali Bank Limited during the Year 2010: 11th South Asian Games, 2010( 29 January to 09 February) : RBL Sponsored Bangladesh Olympic Association in organizing the 11th South Asian Games in Dhaka which was inaugurated by Honorable Prime Minister of Bangladesh. This Participation in sponsorship with other state owned banks and financial institutions facilitated BOA in successfully arranging of the biggest sports festival in South-Asia. The Games enhanced the positive image of Bangladesh among the world community.

Independence Day, 2010:

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RBL provided financial assistance to the Bangladesh Enterprise for Development and Security Studies (BEDSS) in March and five organizations of the bank employees in June, 2010 for celebrating The Great Independence Day, 2010. They organized different programs like rally, discussion meetings and cultural functions to nourish the Spirit of the War of Liberation. International Convention for world-Peace, Humanity and Justice: Rupali Bank Limited granted financial assistance to arrange International Convention for World –Peace, Humanity and justice which was organized by Muktijodhyo Smrity Sangrakhyan Kendro in June, 2010 in Dhaka. The convention was organized by Justice Mohammad Golam Rabbani , Professor Muntasir Mamun and Mr. Shahriar Kabir. The convention helped building opinion home and abroad in favor of the government to develop the human rights situation, demolition of the fundamentalist and militant forces and implementing social justice and the spirit of the War of liberation in the country. Liberation War Museum: RBL awarded a handsome amount of financial grant as one of the premier patrons to the Board of Trustees of the Liberation War Museum in August, 2010 in order to establish the permanent Museum. The bank aims at helping to recover and expand the spirit of the War of Liberation and to promote research on the same. Documentary on the War of Liberation and Bangabandhu: RBL sponsored National Media Ltd. to make and broadcast two rare exclusive documentaries named ‘Nine Months of Freedom’ (58 minutes color) and ‘ Meeting a Milestone’ (28 minutes color) and footage on the war of Liberation and Bangabandhu on different media in December, 2010. Bijoy Mela: RBL donated fund to organize the Sommilito Muktijudhyer Bijoy Mela Porisod organized ‘Sommilito Muktijudhyer Bijoy Mela 2010’ in December in Chittagong for twenty one days. Honorable Prime Minister Sheikh Hasina with a number of Honorable Ministers was present in the fair. The fair has been helping people to share the pleasure of the great victory in the War of Liberation for last several years. RBL donated fund to organize the fair. Sector Commander’s Forum: 39

The Sector Commander’s Forum is helping the government to arrange the trial of the War-Criminals of 1971 providing necessary evidences, witnesses as well as support in building mass opinion against the war-criminals. RBL donated fund to the Sector Commander’s Forum in September,2010 for organizing their different programs and conventions. Observing the 150th Birthday of Rabindranath Tagore: Rupali Bank Limited had a significant contribution to arrange a huge program organized by Jatio Rabindra Sangeet Sommilon Parisod to celebrate 150th Birthday of the Nobel Laureate Bishwa Kabi Rabindranath Tagore on 31st December, 2010 and 1st January, 2011 at ‘Rabindra-Katchari Bari’ in Shajadpur under Sirajgonj District. More than four hundred artists, performers along with eminent intellectuals of our country took part in the colorful program. Sheikh Rasel Shishu Kishore Parisod: RBL made a donation to ‘Sheikh Rasel Jatio Shishu Kishore Parisod’ for arranging different competitions including the Art and Cultural Competition for the children all over the country from 1-18 October, 2010 Disaster Relief: RBL always extends helping hands to the helpless people at the time of natural calamities. The bank provided assistance to the victims of Nimtali-Begunbari Tragedy and Aila affected people of Bhola. RBL donated funds to the Prime Minister’s Relief Fund for the treatment and rehabilitation of the fire- burnt people in a severe fire accident at Nimtali, Dhaka on 4 June, 2010. This bank also offered a grant to the injured at the collapse of a multistoried building at Begunbari, Dhaka on ! June, 2010. RBL has awarded a financial grant to three brides Runa, Ratna and Asma through the Honorable Prime Minister In June, 2010, who lost most of their family and other near relatives in the severe fire accident at Nimtali on the occasion of their marriage ceremony. Rupali Bank Limited donated a significant amount of money to maintain the relief activities to the flood and tidal wave affected people of the Bhola Sadar Upazilla in October, 2010. 40

Iftekhar Kamal Benevolent Fund: A donation has been made by RBL to the ‘Iftekhar Kamal Benevolent Fund’ for treatment abroad to save the life of Iftekhar kamal Chowdhury ,a talented student of Khulna University of Engineering and Technology (KUET) in June, 2010 who was suffering from Blood Cancer. Medical Treatment: RBL provided financial assistance for the faco operations in the eye of an eminent lawyer of Bangladesh Supreme Court, Dhaka in August, 2010. This bank also helped for the rare treatment of eye of a Professor of Bangladesh Open University inSeptember, 2010.The rare treatment was arranged in International Center of Retinis Prigmentosa under International Medical Service in Havana, the capital of Cuba. Boishakhi Park: Rupali Bank Limited donated funds to Banani Society for beautification of ‘Boishakhi Park’ in Banani in June, 2010. The University of Dhaka: RBL sponsored Annual Senate Meeting of the University of Dhaka was held on 28 June, 2010.

The University of Rajshahi: The Alumni Association of the Department of History, The University of Rajshahi organized their 5th Biennial Conference in 20-25 December, 2010. RBL contributed to the conference and helped to share the university alumni the memories, emotions, views and educational system of the country. Society for Development and Cooperation (SODAC): RBL supported SODAC in December, 2010 to help them to arrange research, seminars and symposiums to assist in policy formulation. This donation helped to organize programs to analyze different national significant issues and to build mass opinion for the public interest. Sriticharon Gobesona Sahitte Bangabandhu Chorcha:

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Rupali Bank Limited sponsored to Mr. Kamruzzaman Liton to publish a voluminous of book named ‘Sriticharon Gobesona Sahitte Bangabandhu Chorcha’ in December, 2010. Manush Manusher Jonno: RBL donated fund to six poor, helpless and distressed people from five districts through six of its branches by opening six saving accounts free of charges to make them rehabilitate and self-reliant. Honorable Chairman of RBL handed over the drafts and payment orders to the said six persons during suiting of an episode of a documentary of 52 episodes named ‘Manush Manusher Jonno’ directed by Mr. Imrul Chowdhury was broadcasted on BTV.

Janakantha Family Day:

RBL sponsored celebrating the ‘Janakantha Family Day’ which was held on 06 August, 2010. Death Anniversary of the Father of the Nation: RBL provided financial assistance to support Bangabandhu Parisod to arrange month long programs like rally, discussion meeting, milad mahfil etc. in observance of the death anniversary of the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman to build a mass opinion against killing of Bangabandhu and his family members on 15th August, 1975.

Corporate Social Responsibility Expenditure of RBL For the year2010 at a glance: Date 13-01-2010 28-03-2010 07-06-2010 07-06-2010 13-06-2010 17-06-2010 28-06-2010 28-06-2010

Description of Programs South Asian Games 2010, Dhaka Victory Day Programs Nimtali Tragedy Medical Treatment Beautification of Park International Convention for Justice & Humanity Independence Day Nimtali Tragedy

Amount Tk. 10000000 Tk. 50000 Tk. 2500000 Tk. 3500000 Tk. 50000 Tk. 300000 Tk. 27000 Tk. 600000

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29-06-2010 04-08-2010 09-08-2010 12-08-2010 09-09-2010 09-09-2010

Sponsor Money Sponsorship(Janakantha Family Day) Patronizing Liberation War Museum Medical Treatment Convention of Sector Commander’s Forum 15th August Program on Bangabandhu Sheikh

Tk. 454000 Tk. 80000 Tk. 5000000 Tk. 30000 Tk. 100000 Tk. 100000

09-09-2010

Mujibur Rahman Medical Treatment

Tk. 50000

31-10-2010

For helping distress people of Bhola Upazilla

Tk. 550000

02-11-2010

“Manush Manusher Jonno”- A TV program to

Tk. 180000

23-11-2010

enable six people self reliant “Sheikh Rasel Sishu Kishore

Parisad”-

For Tk. 25000

arrangement of Cultural program & Art competition 23-11-2010

University of Rajshahi Alumni Association to Tk. 100000 arrange there 5th Convention

09-12-2010

“Sriticharon

Gobesona

Sahitte

Bangabandhu Tk. 10000

Chorcha”- A publication 09-12-2010

Society for Development & Co-operation for Tk. 50000

09-12-2010

organizing meeting and seminar Documentary on the War of Liberation and Tk.1442000 Bangabandhu

21-12-2010

Bijoy Mela

Tk. 100000

30-12-2010

Celebrating the Birthday of Rabindranath Tagore TOTAL =

Tk. 50000 Tk.25,348,000

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Findings and Analysis

6. Findings and Analysis: Rupali Bank Limited has taken vast initiatives to perform CSR activities since 2010.RBL is incurring its CSR expenditure directly from its own budget. There is no separate entity established as foundation or trust supported by contribution from CSR expenditure allocation of the bank concerned to incur CSR expenditure.

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6.1 Promotion of Financial Inclusion: Rupali Bank enthusiastically participated in BB’s financial inclusion drive including lending to SMEs, Credit support to young farmers, opening and operating accounts for farmers, unemployed youth and hardcore poor, providing wholesale credit facilities to different micro credit institutions, providing Bank-NGO linkage credit facilities to NGOs, disbursing credit in establishing solar-energy and bio-gas plant in rural areas. These initiatives entail modest indirect impact on earning level of the RBL to the extent of forgone income differential, if any, relative to other available investment options. In the longer run however, these forgone income are likely to be more than made up by the larger income potential from the broadened and diversified customer base.

6.2 Ingraining CSR practices within the organization & client businesses: In accordance with the BB guidance circular suggestion on ingraining environmentally and socially responsible practices within the organization RBL has reported having taken steps for adoption of socially and environmentally responsible practices in their own internal operations. RBL has adopted socially and environmentally responsible practice in its internal operations and provided a modern, healthy and safe work place and created a learning and development environment, ensured compliance of regulatory environmental and social requirements.

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6.3 Initiatives to adopt green banking policy: RBL is now at Phase-1 of green banking according to the Policy Guidelines of BB. The bank has only covered few of its in-house performance and many of the green banking activities of Phase-1 like green finance, green marketing, climate risk fund, reporting green banking practices are yet to be adopted.

6.4 Tax rebate for CSR: RBL renders various CSR activities according to the regulations prescribed Bangladesh Bank. This bank has been performed CSR practices since 2010 and RBL’s income tax assessment has been finalized up to 2002 and case pending for the year 2003 to 2008. Income tax return of 2009 has been submitted but assessment has not been completed. As, the bank has performed its many CSR activities in accordance with Bangladesh Gazette [new SRO No. 229-Ain/Aykar/2011, dated 04.7.2011 u/s 44(4) (b)], but some CSR activities undertaken by RBL are not included in the areas of getting tax concession in accordance with the regulation . They are: CSR activities

Amount

of

Expenditure Tk. 50000 Beautification of Park Tk. 80000 Sponsorship(Janakantha Family Day) “Sheikh Rasel Sishu Kishore Parisad”- For arrangement of Cultural Tk. 25000 program & Art competition (assumed that this organization is not approved by Government) Celebrating the Birthday of Rabindranath Tagore Total CSR Expenditure

Tk. 50000

Tk. 205000

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Allowable CSR expenditure for tax rebate= (Total direct CSR expenditure- Unallowable CSR expenditure) =Tk.25348000-Tk.205000 =Tk.25143000 So the tax rebate is Taka 2514300(Tk. 25143000*10%) The above tax rebate is calculated on the basis of CSR activities following the guideline. But it totally depends on National Board of Revenue after the assessment of Income tax return and CSR activities of RBL.

6.5 Problems of tax disincentive: As there is a provision of getting 10 percent tax rebate by donating to the institutions or authorities approved by the Government according to the Bangladesh Gazette, but there is a possibility of not getting the tax benefit, if any CSR is not considered by NBR as allowable expenditure. The company’s tax liability will be affected by this unallowable expenditure and the company will be deprived of getting tax concession. According to the CSR activities: AY 2011-2012, [new SRO No. 229-Ain/Aykar/2011, dated 04.7.2011 u/s 44(4)(b)], some CSR activities of RBL such as beautification of ‘Boishakhi Park’, donation to ‘Sheikh Rasel Jatio Shishu Kishore Parishad’, sponsorship to ‘Janakantha Family Day’, contribution to celebrate the150th birthday of Rabindranath Tagoreand are not eligible to get tax rebate and RBL will fail to get tax incentive in the above mentioned areas.

6.6 Branding of Rupali Bank Limited: Many CSR activities like arrangement of big games and sports, observance of different national and international days, sponsorship of big events are a major source of branding of RBL because there is a close link of CSR with brand promotion. RBL’s taking part in the beautification program of ‘Boishakhi Park’, providing sponsorship to the University of Dhaka and University of Rajshahi helped to increase the bank’s brand image broadly in the society.

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6.7 Reporting of CSR initiatives: Rupali Bank Limited has reported the CSR activities in separate chapters of their annual report in accordance with CSR guidance circular issued by Bangladesh Bank. RBL has provided details of their programs in its report but did not make proper disclosure of direct CSR expenditure. The quantitative amount of CSR expenditure was gathered from Central Accounts Division of RBL, The bank has also included future plans in the chapter on CSR activities. Rupali Bank Limited has not issued any separate report of its CSR programs and activities. This bank reported CSR program adoption by decisions at board of directors level; there is no practice of stakeholders consultation in drawing up or implementing CSR programs.

6.8 Gap Between the amount of direct CSR expenditure: According to the Review of CSR initiatives in banks (2010) by Bangladesh Bank, July 2011, the direct CSR expenditure in 2010 reported by RBL is Taka 16,700,000 and the actual CSR expenditure by RBL in 2010 was Taka 25,348,000.This is a huge gap between actual expenditure and reported expenditure. This huge gap that might be caused by lack of proper communication and information.

6.9 Staff welfare: RBL has included Retirement Benefit Scheme such as Contributory Provident Fund (CPF) Scheme, General Provident Fund (GPF) Scheme, Pension Fund and General Provident Fund as a part of CSR activities. These welfare funds are created from the contribution of employees/workers and employers. These funds are part of employee benefits. RBL has reported it as CSR because the bank thinks that charity begins at home and these help employees to maintain a sound life. Besides training facilities, performance recognition program and rewards etc initiated by RBL is helpful to ensure a modern, healthy and safe workplace for its employees that assist on ingraining CSR practices within the organization & client businesses.

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Recommendations and conclusion

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7.1 Summary of Findings: Rupali Bank Limited has under taken fresh initiatives in line with Bangladesh Bank Guidelines in the areas of CSR activities since 2010.RBL participated in promotion of financial inclusion of the large socially disadvantaged rural and urban population segment. In accordance with the BB guidance circular suggestion on ingraining environmentally and socially responsible practices within the organization, RBL has also taken several CSR initiatives. RBL can get some tax rebate for CSR practices in the areas approved by the government. Also, CSR practices in RBL are very helpful to enhance its brand image. But proper adoption of Phase-1 of Green Banking activities, separate CSR reporting including quantitative disclosure of CSR expenditure and eliminating the information gap of reported CSR expenditure are yet to be implemented.

7.2 Recommendation: Based on the evaluation of different aspects of the CSR practices of Rupali Bank Limited, the following recommendations have been made: •

RBL should take more initiatives to exhibit Suitable and well thought-out CSR programs in accordance with Bangladesh Bank Guidelines.

•

Green Banking policy should be adopted properly and RBL should give more attention to adopt Phase-1 of Green Banking since the deadline of implementing the Phase-1within 31 December, 2011 and followed thereby.

•

RBL should establish separate foundation or trust to incur CSR expenditure to manage CSR activities properly.

•

CSR should be given to the areas which are approved by NBR to get tax benefit.

•

RBL should regard public relations and exercise CSR as the principal brand image crisis communications function and give special considerations to it within its marketing and communications strategy formulation and execution.

•

RBL can achieve cost benefit from CSR programs. Those techniques are less expensive and more influential than advertising.

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•

As with all other channels of advertising infrastructure, CSR should get comparable preference while assigning RBL’ communications budget. In fact, partiality to CSR expenses should be greater because it has the ability to raise the public consciousness with a fraction of publicity.

•

RBL can afford to employ CSR employees, who should rely on them to put together well written, influential and perform and plan CSR programmes and press releases that are competent enough to catch public attention. This will also work to minimize the information gap and ensure actual CSR expenditure reporting.

•

RBL Should issue separate report of its CSR programs and activities including quantitative disclosure of CSR expenditure in accordance with the Bangladesh Bank Guidelines.

7.3 Conclusion: In recent times, corporate social responsibility has emerged as an important concept in discourses on development. By incorporating CSR as a strategic investment into their fundamental business strategy, management instruments and operation, companies will be able to contribute to social and environmental issues affecting the development of mankind. CSR is not a cost, it is an investment. Therefore, by incorporating CSR, businesses will be able to contribute to the society and at the same time minimize risk due to uncertainty. In the context of Bangladesh, CSR can contribute immensely for the development of the community. Though Rupali Bank Limited has taken initiatives to perform CSR activities in accordance with Bangladesh Bank Guidelines in most of the cases, but the bank should properly follow the Bangladesh Bank Guidelines.. As there are challenges to implement CSR properly in our country because of limited resources, RBL should prioritize those CSRs which will contribute to poverty reduction and will supplement government’s effort towards achieving the millennium development goals. By exhibiting suitable CSR programs, adopting proper green baking policy, employing CSR employees, RBL can be able to achieve a long term goal of sustainable development.

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Bibliography: Cheney, C (2010). Financial Executives and CSR. Financial Executive. 26 (4), 26. Köhler and Maclean. (2009). Talisman? A responsible corporation?. Corporate Social Resposibility. 122 (23), 36. Iiasa, (2010). Strategic Decision Making. Available: www.iiasa.org.za/Technical/CSR.pdf . Maccarrone, S (2009). Factors influencing the attitude towards corporate social responsibility: some empirical evidence from Italy. Corporate Governance. 9 (2), 97. Worldbank (2010), Corporate Social Responsibility Diamond – Main Elements of CSR. Available: info.worldbank.org/etools/docs/library/57524/csr_diamond.pdf. Sutantoputra, A W (2009). “Social disclosure rating system for assessing firms' CSR reports. Corporate Communications”. 14 (1), 34. Belal,A.R. (2009). “Corporate Social Reporting (CSR) in Emerging Economies: A Review and Future Direction”. Rupali Bank Limited , Annual Report 2010. Rupali Bank Limited ,Annual Report 2009.

Rupali Bank Limited, Annual Report 2008. Bangladesh Bank, Annual Report 2010-2011. Bangladesh Bank, (July, 2011), “Review of CSR initiatives in Banks (2010)” Bangladesh Bank, (April, 2010), “Review of CSR initiatives in Banks (2008 & 2009)” DOS Circular No. 01(1 June, 2008) http://www.bangladesh-bank.org/ http://www.nbr-bd.org http://www.rupalibank.org/

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