Performance of Social Goods in the Indian Banking sector and its Impact
Subscribe/Renew Journal
Purpose : The objective of the present article was to investigate corporate social responsibility (CSR) activities in the Indian banking industry. This study empirically examined the relationship between the two variables, CSR spent and net profits after tax of public and private sector banks, and how CSR by banks contributed to producing value in society.
Methodology : The study examined the key CSR initiatives — social, environmental, women's empowerment, employment, healthcare, and education, independently carried out by banks, and the CSR spent was taken as independent variables. Further, sustainability and net profits after tax as the financial performance were considered to be the dependent variables. For the study, annual reports from the years 2018 – 2021 were considered, and the analysis was conducted using the Pearson coefficient on NCSS 2022.
Findings : This analysis highlighted a correlation between an organization’s annual CSR spending and its subsequent year's net profits after tax. Banking is crucial to the social and economic advancement of India.
Practical Implications : This study suggested that additional research in this field of CSR in the banking sector be conducted as banks have a well-defined structure to meet social demands and are working extremely hard to meet their goals.
Originality : Unlike the prior research on CSR, the present work created a relationship between the social performance and the financial performance of the companies irrespective of any industry and their step toward sustainability.
Keywords
Banks, Corporate Social Responsibility, CSR Spent, Net Profits after Tax, Social and Economic Development, Sustainability.
JELClassification Codes : G2, O1, O16
Paper Submission Date : July 28, 2022 ; Paper sent back for Revision : March 20, 2023 ; Paper Acceptance Date : March 26, 2023 ; Paper Published Online : April 15, 2023
- Arli, D. I., & Lasmono, H. K. (2010). Consumers' perception of corporate social responsibility in a developing country. International Journal of Consumer Studies, 34(1), 46–51. https://dsoi.org/10.1111/j.1470-6431.2009.00824.x
- Behal, V., & Gupta, M. (2022). Reporting of corporate social responsibility practices: An evidence from Indian BSE-listed companies. Prabandhan: Indian Journal of Management, 15(3), 42–58. https://doi.org/10.17010/pijom/2022/v15i3/165633
- Chaudhury, S. K., Das, S. K., & Mishra, D. P. (2012). Corporate governance practices in selected Indian financial institutions. European Journal of Business and Economics, 5, 39–48. https://doi.org/10.12955/ejbe.v5i0.170
- Dhingra, D., & Mittal, R. (2014). CSR practices in Indian banking sector. Global Journal of Finance and Management, 6(9), 853–862.
- Dutt, R., & Grewal, H. (2018). Corporate social responsibility (CSR) in Indian banking sector : An empirical study on State Bank of India Limited. Amity Journal of Corporate Governance, 3(1), 35 – 45.
- Freeman, R. E., Harrison, J. S., Wicks, A. C., Parmar, B. L., & De Colle, S. (2010). Stakeholder theory: The state of the art. Cambridge University Press. https://doi.org/10.1017/CBO9780511815768
- Govindasamy, V., Suresh, K., & Gunasekar, S. (2018). Textile industry CSR disclosure trends: Reflections from India and Malaysia. Prabandhan: Indian Journal of Management, 11(12), 35–50. https://doi.org/10.17010/pijom/2018/v11i12/139989
- Gupta, S. S., & Wadera, D. (2021). Consumer understanding of corporate social responsibility dimensions: An application of CSR pyramid model in the Indian context. International Journal of Indian Culture and Business Management, 22(1), 110–136. https://doi.org/10.1504/IJICBM.2021.112612
- Hossain, S. M., & Khan, M. R. (2016). Corporate social responsibility (CSR) in banking sector: An empirical study on the Hong Kong and Shanghai Banking Corporation (HSBC) Limited. IOSR Journal of Business and Management, 18(4), 53–61.
- Inamdar, S. C., & Nagendra, A. (2017). A study on the relationship between the presence of women on boards and corporate reputation. Prabandhan: Indian Journal of Management, 10(12), 20–31. https://doi.org/10.17010/pijom/2017/v10i12/119978
- Kolk, A., & van Tulder, R. (2010). International business, corporate social responsibility and sustainable development. International Business Review, 19(2), 119–125. https://doi.org/10.1016/j.ibusrev.2009.12.003
- Kumar, N., Kumar, P., & Nigam, D. (2021). A study of interaction effect of financial performance on the relationship of board gender diversity and corporate social responsibility. Prabandhan: Indian Journal of Management, 14(8), 8–24. https://doi.org/10.17010/pijom/2021/v14i8/165676
- Lentner, C., Szegedi, K., & Tatay, T. (2015). Corporate social responsibility in the banking sector. Public Finance Quarterly, 95–103. https://www.researchgate.net/publication/303697394
- Malagatti, V. D. (2017). Holistic framework and its dimensions for egalitarian implementation of corporate social responsibility. Prabandhan: Indian Journal of Management, 10(4), 49–59. https://doi.org/10.17010/pijom/2017/v10i4/112771
- Matten, D., & Moon, J. (2008). "Implicit" and "explicit" CSR: A conceptual framework for a comparative understanding of corporate social responsibility. Academy of Management Review, 33(2), 404–424. https://doi.org/10.5465/AMR.2008.31193458
- Moharana, S. (2013). Corporate social responsibility: A study of selected public sector banks in India. IOSR Journal of Business and Management, 15(4), 01–09.
- Moisescu, O.-I. (2017). From CSR to customer loyalty: An empirical investigation in the retail banking industry of a developing country. Scientific Annals of Economics and Business, 64(3), 307–323. https://doi.org/10.1515/saeb-2017-0020
- Öberseder, M., Schlegelmilch, B. B., Murphy, P. E., & Gruber, V. (2014). Consumers' perceptions of corporate social responsibility: Scale development and validation. Journal of Business Ethics, 124, 101–115. https://doi.org/10.1007/s10551-013-1787-y
- Patro, B., & Pattanayak, J. K. (2017). Association of CSR disclosure with accounting conservatism: A study of select Indian mining firms. Indian Journal of Finance, 11(3), 7–25. https://doi.org/10.17010/ijf/2017/v11i3/111646
- Pérez, A., & Rodríguez del Bosque, I. (2013). Measuring CSR image: Three studies to develop and validate a reliable measurement tool. Journal of Business Ethics, 118, 265–286. https://doi.org/10.1007/s10551-012-1588-8
- Rajpurohit, P. D., & Rijwani, P. R. (2020). Financial reporting practices and internal corporate governance mechanisms in emerging markets. Prabandhan: Indian Journal of Management, 13(8–9), 8–27. https://doi.org/10.17010/pijom/2020/v13i8-9/155230
- RBI Notification. (2011). CSR in Indian banks, corporate social responsibility, sustainable development, and non-financial reporting - role of banks (RBI/2011-12/216: DBOD No Dir.BC.58/13.27.00/2007- 08, Dec.20). Reserve Bank of India.
- Sharma, E., & Mani, M. (2013). Corporate social responsibility: An analysis of Indian commercial banks. AIMA Journal of Management & Research, 7(1/4), Article No. 6. http://115.124.122.139/iibf/documents/Eliza_Sharma_Mukta.pdf
- Singh, A., & Verma, P. (2017). Investigating the nexus of corporate social responsibility and brand equity: A systematic review. Prabandhan: Indian Journal of Management, 10(2), 7–25. https://doi.org/10.17010/pijom/2017/v10i2/110625
- Tran, Y. T. (2014). CSR in banking sector - A literature review and new research directions. International Journal of Economics, Commerce and Management, 2(11), 1–22.
- Van Marrewijk, M. (2003). Concepts and definitions of CSR and corporate sustainability: Between agency and communion. Journal of Business Ethics, 44, 95–105. https://doi.org/10.1023/A:1023331212247
Abstract Views: 159
PDF Views: 0