Corporate Social Responsibility Persuasive

Corporate Social responsibility is best defined by the World Business Council as “The continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large”.

Banking is a specialized business. Banks have large number of creditors and failure of one bank can lead to the failure of many other banks as the customers lose faith that can cripple the entire economy of a nation. The recent global financial meltdown has created a negative and gloomy sentiment in all the stakeholders in the entire banking industry, including in India since financial markets in India even if loosely, but are connected to global financial markets. However, prior to this meltdown, customers, and other stakeholders held positive expectations about their banks performance.

If banks can leverage this social capital in times of distress, it can help to negate or reduce the potential negative influence on their performance. CSR orientation of banks can be a useful tool for them to tide over such crises in future, if banks maintain their relationships with stakeholders in making their businesses more sustainability. CSR, among other things, is a key stakeholder relationship building activity. It was also found that the CSR brand does reap more relationship benefits from its social initiatives than do its competitors indicating the competitive positioning and relationship benefits of the brands associated with CSR.

In the Indian context too, previous studies have shown that Indian banks concentrate its CSR activities more on areas such as, education, balanced growth, health, and environmental marketing, and incorporate customer satisfaction as a CSR activity. Given this evidence, can we expect that banks in India consider CSR orientation and stakeholder relationship marketing orientation as flip sides of the same coin.

In 2011, a debate was triggered on increasing the social responsibility of India’s corporate, as the government of India was mulling over the idea of a mandatory spend of 2 % of profits on social responsibility programs by all Indian companies. With the implementation of this step, the collective spending on CSR initiatives would be approximately $ 2 billion a year (almost Rs 80,000 million) (Source: www.banknetindia.com/ banking). Even if CSR spends are not mandated by the government, even then it has initiated an awareness among Indian corporate to spend more on building healthy social relationships with their customers and other stakeholder.

ROLE OF STATE BANK OF INDIA IN CSR ACTIVITIES

Indian Banks were not to be left behind. In August 2011, the largest bank in India, State Bank of India (government of India is a majority stakeholder) announced that it would spend $ 2 million (almost Rs 800 million) on CSR initiatives, such as by donating fans to schools in the vicinity of all its 13,000 bank branches. (Source: www.indiacsr.in). This announcement by the largest bank in India, signals the increasing pace with which Indian banks may try to catch up with their peers using CSR initiatives in building relationships with its stakeholders.

ROLE OF SBI IN CSR
State Bank of India is found to be adopting an integrated approach of combining CSR with the ultimate customer satisfaction voluntarily. In recent years an attempt has been initiated to ensure socially responsible behavior of banking sector in more systematic manner. RBI has also insisted upon taking measures for sustainable development of economy through realizing the dire necessity of CSR.

Chart 1: Core thrust areas for reported CSR activities encapsulated by SBI

FROM INCEPTION TO TILL DATE
The SBI Group is vigorously promoting business activities in harmony with corporate social responsibility (CSR) with our password to success, “integrity is the basis of profit.”

2001-2002 – SBI donated 1% of its profit to the Children’s Social Welfare
Corporation and incorporated the decrease in the interest of education loan. 2001-2005 – SBI representatives visit local governments and child welfare facilities across India to learn about child welfare facilities. SBI representatives visit local authorities across India and participate in public hearings for women empowerment. 2003-till date – The bank held an annual campaign for the elderly people on Oct 1 for eye checkup and free cataract operation. 2006 – SBI came up with campaigns and loan facilities in the rural areas of Bihar to empower the farmers. 2007 – Donated 1.4% of annual revenue for the development of rural area farmers. Enunciated GBP (Green Banking Policy).

2011-2012 – SBI had spent Rs 71 Crore towards CSR.

RELEVENT CSR ACTIVITIES OF SBI
State Bank of India become signatory to the Carbon Disclosure Project (CDP) State Bank has been undertaking several environmentally and a socially sustainable initiative through its 14000 plus branches spread across the length and breadth of the country and was one of the few banks in the country to have enunciated a ‘Green Banking Policy’, as early as in 2007. Bank was the first in the entire Banking, Insurance and Financial Services sector to have conceptualized and owned wind farms for generation of green power to part substitute consumption of thermal power by its offices in India and it has already launched a project to measure and manage organization level foot print to achieve carbon neutrality.

Partnering with CDP has only reiterated the Bank’s resolve and commitment towards sustainable development. The Carbon Disclosure Project (CDP) is an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world. Some 3,000 organizations across the world’s largest economies now measure and disclose their greenhouse gas emissions and climate change strategies through CDP, in order that they can set reduction targets and make performance improvements. This data is gathered on behalf of 534 institutional investors, with combined assets under management in excess of $64 trillion, as well as purchasing organizations and government bodies and made available for integration into business and policy decision making. SOURCE: WWF%20India%20%20State%20Bank%20of%20India%20become%20signatory%20to%20the%20Carbon%20Disclosure%20Project.htm SBI to spend Rs 80 Crore on CSR in 2011 fiscal year and donation of 10 fans in each school

State Bank of India chairman Pratip Chaudhuri on Monday said the bank spent Rs 80 crore this fiscal on CSR initiatives which will involve donation of ten fans each to a school in the vicinity of all the 13,000 branches. Mr. Chaudhuri was speaking to reporters at a civic body run school in south Mumbai’s Colaba area after announcing help for the school as a part of the bank’s corporate social responsibility activities. He said Government is ‘quite committed’ to infuse funds through the bank’s proposed Rs 20,000 crore rights issue. “The Government is quite committed on the rights issue and it is not right for the bank to put a finger on the quantum.

Gift Drishti
On the occasion of World Elder’s Day on 1st October, CSR initiative – “Gift Drishti” was launched in partnership with Help Age India, a registered national level voluntary body, working for the cause of disadvantaged aged persons. Restoring vision is done through Intra Ocular Surgery (IOL). SBI Life employees made monetary contributions to the cause. SBI Life donated twice the sum contributed by its employees. Eye sight for thousands of elderly citizens was restored across the rural parts of the country. Read India Pledge

SBI Life undertook the Corporate Social Responsibility (CSR) initiative, aimed at driving the cause to make children read and write. The campaign, “Read India Pledge” sensitized general public towards the cause and urged them to pledge & support the cause monetarily or by devoting time. The campaign was partnered by Pratham, one of the leading child-cause related NGOs and Radio Mirchi, a leading radio station. SBI’s CSR INITIATIVE IN KOLKATA

As a part of CSR activity, State Bank of India (SBI) has donated a phaco emulsifier Unit costing Rs.10,40,000 to Suvendu Memorial Seva Pratisthan located at Gobrapota, Krishnanagar to enable them to examine the needy eye patients at the remotest area of Nadia District with modern technology. SBI’s Bengal Circle chief general manager Suriender Kumar has inaugurated the equipment in presence of a large gathering of local rural people and eminent dignitaries. Mr Kumar has also presented a cheque for Rs 2, 61, 617 towards the cost of a generator set to the secretary, Helen Keller Smriti Vidyamandir, Krishnangar in order to use the same at the aforesaid Blind School. PK Nag, deputy general manager, Bidhannagar Module and other top officials of the bank attended the programme. A tree plantation programme has been conducted by the SBI, Krishnanagar Branch where the CGM planted trees along with others. SBI’s CSR SPEND NORM

Although the two per cent minimum CSR spend norm is only at a proposal stage and yet to be enacted into law, Viswanathan said SBI’s spend this fiscal may even exceed 2 per cent of the net profits of the bank. S.B. Nayar, Deputy Managing Director & Group Executive (Corporate Banking Group), said that the bank was more in the purpose than on the percentage when it came to CSR spends. RECENT INITIATIVES TAKEN BY SBI

Recently, Ministry of Rural Development (MoRD) and Ministry of Corporate Affairs (MoCA) has also issued voluntary CSR guidelines for Indian Banking and Corporate sector respectively. To highlight the role of banks in corporate social responsibility, the RBI circulated a notice on December 20, 2007 for all the scheduled commercial banks in India. SBI is one of the leading banks in initiating these applications. One of these are GREEN BANKING. Green banking involves environmental and social responsibility. This word is new in Indian banking and it appeared in 2009 when there were concern on environment conservation and it was realised that banks can play a big role in this movement. Green Banking encompasses a wide variety of banking services.

The banks are providing finance to primary metallurgical industries, paper and pulp, pesticides / insecticides, fertilisers, chemical / pharmaceuticals, textiles etc. and bank may play a big role by scrutiny of investment projects from the environmental angle. Banks are now started to obtain NOC from respective state pollution control board. Many banks are promoting online banking services as a form of green banking. Benefits of online banking include less paperwork and less driving to branch offices by bank customers. Green banking also reduces the expenditure of bank and branch by minimizing the use of paper work and mailing fees. Thus, green banking not only important for environmental point of view but also mitigate the credit risk, legal risk and reputation risk.

CONCLUSION
Indian banks have come a long way from treating their CSR orientation as mere compliance (in the olden days), to a more strategic level, by aligning their CSR orientation with their stakeholder orientation, by choosing to focus on few selected areas for CSR activities. SBI is the firms that focus on market-driven sustainability by integrating the customer (and other important stakeholders) into marketing Stakeholders have now entered into the corporate boardrooms like never before, creating a new space for themselves in the form of “triple bottom-line” philosophy, going beyond the shareholder value driven philosophy prevalent so far. SBI in the current times has become highly proactive and dynamic and the business of banks in the liberalized market economy of India has become so stakeholder-focused.

Such elevation of its CSR orientation to a strategic level can indeed bring direct and sustainable competitive advantage to them, provided it is done without missing the customers, and other primary and secondary stakeholders. Sustainability is now being increasingly viewed from the perspective of CSR and stakeholders; to the extent that a firm’s CSR orientation can create strong relationships with its stakeholders even goes onto suggest the formula for firms’ market-focused sustainability as, market orientation plus multiple stakeholders plus corporate social responsibility. It seems that it is about time that Indian banks to integrate their CSR orientation with market orientation, by adopting market-focused approach to stakeholder relationship marketing.