Tk50 lakh each sought from 20 banks for police school project, stirring CSR debate

Highlights:

• BAB asked 20 banks for Tk50 lakh each
• Funds sought to build police families' school at Demra
• Project cost Tk10 crore; no government funding available
• Banks received letters requesting CSR contributions
• Bank leaders warn against pressured or "directed CSR"
• Regulators stress CSR should prioritise underprivileged groups

The Bangladesh Association of Banks (BAB) has sought Tk50 lakh each from 20 commercial banks to help finance the construction of a school for police families, prompting debate over the appropriate use of corporate social responsibility (CSR) funds.

The request follows a letter from the Dhaka Metropolitan Police (DMP) headquarters to the BAB seeking financial support for the proposed eight-storey school, which will be built inside the Demra Police Lines. 

In response, the BAB on 1 February wrote to 20 commercial banks asking them to contribute from their CSR allocations, aiming to raise a total of Tk10 crore.

According to officials at around 10 banks who spoke to TBS, the letters were received. Copies of the correspondence have also been reviewed by the newspaper.

The proposed school is intended to serve the children of police personnel as well as other residents. The initiative comes after the construction of a 20-storey residential building for 300 police families at Kayetpara under the Demra police station.

The residential complex is part of the DMP's eastern regional police lines, built on 36.66 acres of land, where families of personnel from the DMP, Armed Police Battalion and Criminal Investigation Department have already begun residing.

In its letter to BAB, the DMP headquarters estimated the total cost of constructing the school building, including furniture and equipment, at Tk10 crore. It stated that no government allocation is currently available for the project and that self-financing is not feasible. 

Considering the overall situation, it described the school's rapid construction within the Demra Police Lines as necessary and sought support under banks' CSR programmes, arguing that the institution would contribute to expanding education among police families and the local community.

A senior BAB official confirmed that the proposal was discussed at a board meeting and that 20 banks had been approached for Tk50 lakh each. Although the names of the 20 banks could not be confirmed, he said, financially strong ones were approached.

Multiple attempts over the phone by this newspaper to contact Abdul Hai Sarker, chairman of BAB, were unsuccessful.

Concerns over 'directed CSR'

While the cause is viewed as noble, the request has sparked a debate within the banking sector regarding the nature of "directed CSR." 

Mashrur Arefin, MD & CEO of City Bank and chairman of the Association of Bankers Bangladesh (ABB), noted that while the purpose is good, such directives carry historical baggage.

"The concern with this kind of 'directed CSR' is that, in the past, whenever funds were used for specific causes under the previous regime, bank MDs were later questioned by the Anti-Corruption Commission. Under the circumstances, 'directed CSRs' should stop," Arefin said.

He added that City Bank has not yet placed it before the board for approval.

Other bank managing directors expressed similar reservations, questioning why banks are being pressured for funds when the residential project was funded elsewhere. 

One managing director remarked, "The BAB is doing what it used to do before; this is not right. It creates a kind of pressure on the banks."

CSR guidelines and priorities

According to central bank guidelines, the core philosophy of CSR is to support the country's poorest, underprivileged and marginalised groups by contributing to education, healthcare, income-generating activities, infrastructure development, disaster management, and sports and cultural initiatives.

Banks and financial institutions are permitted to allocate 30% of their CSR budgets to education, 30% to healthcare, 20% to environment and climate change mitigation and adaptation, and the remaining 20% to other areas, including income-generating activities, disaster management, infrastructure, sports and culture.

Arief Hossain Khan, spokesperson and executive director of the central bank, emphasised that CSR funds should be directed towards individuals or institutions lacking financial capacity. 

"Generally, CSR support should not go to individuals or institutions that have the capacity. Rather, it should assist those for whom support is essential but who lack the means," he said.

Economists have also weighed in on the broader issue of CSR priorities. 

Ashikur Rahman, principal economist at the Policy Research Institute, said CSR resources could be more effectively deployed in the health sector to address systemic weaknesses. 

"If our CSR model were utilised more in healthcare, it could mitigate some of the vulnerable areas of society. It should be structured in a way that benefits poor patients in hospitals," he said.

CSR is widely regarded as an essential component of achieving the United Nations Sustainable Development Goals. It reflects a business ethos in which companies pursue economic growth while remaining socially and environmentally accountable – a concept often described as the "triple bottom line" of people, planet and profit.