CSR Spending in Banking Sector in India

The banking sector is considered the backbone of an economy and the performance of the sector is a measure for the performance of the whole economy. Going by this, the report tries to analyze the performance of the Indian banks in Corporate Social Responsibility (CSR) spending. After the enactment of the new Companies Act 2013, CSR has become mandatory for a certain class of companies in India.

The analysis of the CSR spending of 19 Indian banks reveals that the sector is yet not prepared for 2% of the net profit spending on CSR projects. The 19 banks analyzed in this report have spent just 0.70% of their average net profit of FY 2011, 2012 and 2013. The situation is even worse with public sector banks. Out of the 19 banks, 12 are public sector banks and their CSR spending is just 0.43% of their average net profit of FY 2011, 2012 and 2013. Private sector banks have been spending a lot more on CSR, than their peers in public sector. Private sector banks have spent 1.17% of their average net profit of FY 2011, 2012 and 2013 on CSR projects.

Overall, these 19 banks have spent INR 535.85 Crores on CSR activities in FY 2013-14 and they need to spend almost three times of this amount, INR 1628.1 Crores, in FY 2014-15 to comply with the mandatory CSR clause of the new Act.

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