In a thorough Policy Guidelines on Corporate Social Responsibility (CSR) for banks and financial institutions announced on Sunday, the central bank indicated that more money may be spent on the health sector from CSR funding.
The specific standards were developed by a Bangladesh Bank team led by Khondkar Morshed Millat, general manager of the sustainable finance department, to provide openness and responsibility to the usage of CSR funding.
Previously, banks were only authorized to spend a minimum of 20% of their CSR funding on healthcare, however, this was temporarily increased to 60% during the Covid epidemic.
The education allocation has been maintained at a minimum of 30% of the total CSR allocation. The BB also increased the minimum budget limitation for climate change mitigation and adaptation. Under the latest policy, the allocation for the environment and climate change mitigation and adaptation was increased to a minimum of 20 per cent from 10 per cent.
Apart from the 80%, the remaining 20% of the overall CSR budget can be used for income-generating activities, disaster relief, infrastructure development, sports and culture, and other areas.
The BB’s new policy also specified sub-sectors of the eight sectors in which the CSR fund can be spent to ensure more transparency in CSR fund use.
Banks and NBFIs have also been asked to publish CSR annual reports on their websites, submit CSR reports to the BB on a half-yearly basis and disclose their CSR activities in a specific chapter of their annual reports.
In its instructions, the central bank also enabled banks and non-bank financial institutions to borrow at a lower interest rate from their corporate social responsibility fund for socially responsible financing for BB-approved purposes.
Previously, the definition of CSR was not defined, but the new policy guidelines do so, along with the objectives.