**3. Patterns of direct CSR expenditures by banks**

**Table 1** presents the sector-wise distribution of direct CSR expenditures by banks over the period 2007–2020. **Table 1** reveals that CSR spending by banks scaled up from Bangladesh Taka (BDT) 226.40 million in 2007 to BDT 5273.6 million in 2015, and then BDT 9675.5 million in 2020. Among different sectors, health, humanitarian and disaster sectors received primary importance in the initial phase of the CSR evolution in Bangladesh (2007–2010). However, at this phase, banks allocated maximum CSR funds to meet other purposes, such as buying books, scholarships for students, and boat races, as there was a lack of proper guidelines for reporting CSR spending. The education sector received considerable attention in receiving CSR in 2011, although the humanitarian and disaster relief sector dominated the CSR expenditures in the last couple of years. The education sector received BDT14.30 million (6.32%) in 2007, which increased to BDT 612.48 million (28%) in 2011, then nearly BDT3800 million (38%) in 2018. However, in 2020, the education sector captured 10.8% of the CSR spending by banks because the COVID-19 hurt the education sector severely. By contrast, the humanitarian and disaster relief sector captured 42% of the CSR


*Sectoral distribution of direct CSR expenditure by banks (2007–2020).*

**Table 1.**

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

expenditures in 2020 from 8.51% in 2011. The health sector appeared to be the third most crucial sector in capturing CSR expenditures in recent times, receiving 18.1% of CSR expenditures in 2020. The environment sector has been given priority since 2010. However, it bagged nearly 3.07% of the total allocated amount over the period (2010–2020), implying that bank officials were less concerned about the adverse effects of global warming. Notably, the two new sectors, infrastructure improvement and income-generating activities, were included in 2015 as a part of CSR spending, leaving sports as a minor priority sector. In addition, the arts and cultural sector received 9.23% in 2020, while the same was 4.16% in 2016 and 14.12% in 2010.

On the whole, we find that Bangladesh has a much narrower understanding of CSR activities because the allocated amount to CSR activities is still meager, although it has increased over the years with some exceptions. Also, CSR spending by banks on different sectors tends to follow a zigzag trend and is mainly limited to health, education, and contribution to natural disasters and humanitarian activities. These are partly due to regulators' frequent changes in CSR policies and reporting formats. It is worth noting that until the year 2014, Bangladesh Bank compiled the CSR expenditure by banks under seven different sectors, including (1) education, (2) heath, (3) humanitarian and disaster relief, (4) sports, (5) arts and culture (6) environment, and (7) others. However, in 2015, Bangladesh Bank included two other sectors, such as infrastructure improvement and income-generating activities, and made some changes to the items in the previously prescribed sectors for reporting CSR activities. For example, the sports and arts and culture sectors were advised to register under the cultural welfare sector. In addition, Bangladesh Bank guided banks to allocate CSR funds to impoverished areas, such as virtuousness and anticorruption publicity, and advised banks to report them in the others section. The changes in CSR policies resulted in banks' uneven allocation of CSR budgets to different sectors. Apart from this, some sectors, such as education, health, environment, and disaster relief, have been the priority sectors for the CSR spending by banks in Bangladesh.
