**2. Overview of CSR guidelines by Bangladesh Bank**

As a controller of financial institutions, Bangladesh Bank issues CSR guidelines for all scheduled banks and nonbank financial institutions to ensure corporate accountability, ethical practice, and social justice. On June 01, 2008, Bangladesh Bank, for the first time, issued a circular on CSR reporting for all scheduled banks and nonbank financial institutions (NBFIS) to provide equitable and meaningful solutions to social and environmental issues. In this circular, Bangladesh bank asked commercial banks to include CSR at the corporate level (board of directors of the bank), select CSR action programs, fix performance targets in consultation with the internal and external stakeholders, and disclose CSR activities ad-hoc basis. The circular outlined four sections of CSR that include: (a) introduction, (b) source materials helpful in drawing up CSR programs and sustainability reports, (c) initiating CSR programs in banks and financial institutions, and (d) monitoring of CSR performance. Also, the circular was attached with "Annexure-A," where 14 related references were given to report CSR performance. Then on June 02, 2009, Bangladesh Bank issued another circular with reference to the previous circular to help massive Cyclone Ayla affected people in Bangladesh. Then, on July 15, 2010, Bangladesh Bank enclosed a format for monitoring the CSR adoption and performance for banks and asked them to submit a statement on CSR activities following the prescribed format on a half-yearly basis within 30 days of each half-year period. These guidelines are viewed as a milestone for CSR activities for the banks in Bangladesh. It outlined some critical issues, such as financial inclusion, social projects, community investment, and the number of beneficiaries for CSR reporting, and made the CSR report mandatory for banks. After this circular, Bangladesh Bank issued another circular on December 20, 2010, asking banks to establish a separate CSR desk in banks for proper communication. Then, on February 10, 2011, Bangladesh Bank provided policy guidelines for practicing green banking. Following this circular, banks were required to report initiatives under the green banking program to Bangladesh Bank quarterly. Also, banks were asked to disclose green banking activities in their annual reports and update their websites as well. In the following circular on December 01, 2011, Bangladesh Bank focused on gender equality in the workplace and provided a format to report gender equality-related performance. The green banking initiative and gender equality in the workplace is a breakthrough in promoting CSR activities in Bangladesh.

Another significant regulatory development related to CSR activities took place in April 2013 when Bangladesh Bank established a Green Banking and CSR Department (GBCSRD) to ensure proper monitoring of the CSR activities by banks. On April 11, 2013, the GBCSRD issued a circular to submit reports on school banking on a halfyearly, green banking quarterly, and other CSR activities, such as gender equality and educational support activities quarterly. On December 22, 2014, the GBCSRD issued another circular titled "Indicative guidelines for CSR expenditure allocation and enduse oversight" to cover administrative setup, budgetary allocation process, expected range/coverage of allocations, and end-use monitoring of CSR expenditures in CSR reporting. In the expected range/coverage section, banks were asked to allocate at least 30% of total spending to the education sector, 20% to preventive and curative health care supports, and a significant amount of funds for meeting any urgency, such as environmental disasters. One of the remarkable progresses in this circular was that banks were responsible for monitoring the proper utilization of CSR funds and keeping all end-use monitoring records available for inspection by internal and external auditors and supervision officials from Bangladesh Bank.

#### *Does Board Structure Matter in CSR Spending of Commercial Banks? Empirical Evidence… DOI: http://dx.doi.org/10.5772/intechopen.105589*

Afterward, on June 10, 2015, the GBCSRD issued a new format for CSR reporting under the "statement on corporate social responsibility initiatives." This format outlined three critical areas for CSR reporting: Corporate governance, policy issues, and CSR expenditures. The corporate governance section emphasized reporting the initiatives for institutionalizing the corporate governance framework to add value to the stakeholders, such as shareholders, customers, partners, and employees. Policy issues covered the transmission of information approved by the board regarding CSR, and the CSR expenditure section highlighted the areas of CSR spending, including (1) social projects, (2) community investment, and (3) priority sectors. Then, on June 23, 2015, GBCSRD advised banks to include "virtuousness and anticorruption publicity expense" as CSR activity and report it in the "others" section as per the previously enclosed format. Finally, on January 10, 2022, GBCSRD issued a new guideline for CSR spending focusing more on healthcare and environmental issues to uphold the country's sustainable growth. As per this circular, banks and NBFIs were advised to allocate a minimum of 30% of total CSR expenditure for health care, another 30% for education, and a minimum of 20% for tackling the adverse impact of global warming and climate change and urban migration.

As a whole, it is observed that since the year 2008, Bangladesh Bank has taken substantial measures to enhance the CSR activities of the commercial banks. In the initial phase, CSR was recognized as a philanthropic activity for banks to report ad hoc. However, after a couple of years, CSR was included in the lending model of the banks, and it became a policy instrument for sustainable growth. Also, Bangladesh bank institutionalized CSR activities by setting up a new CSR department (GBCSRD) and widening CSR activities in areas, such as health, education, sanitary, gender equality, environmental disasters, and green banking. Simultaneously, Bangladesh Bank made CSR reporting mandatory for commercial banks and made them responsible for monitoring the end-use of CSR expenditures while keeping all those records for internal and external audits. In addition, Bangladesh Bank decided to publish the CSR activities of banks on a half-yearly basis to ensure transparency and accountability. All these initiatives indeed enhanced the CSR activities of the commercial banks, as illustrated in Section 3 of this chapter.
