Evaluating CSR Activities: A Report on State Bank of India (SBI)

This report provides a comprehensive analysis of State Bank of India's (SBI) Corporate Social Responsibility (CSR) policies and activities. It highlights SBI's philosophy and commitment to social and economic well-being, particularly for underprivileged communities, and its efforts to minimize environmental impact. The report details SBI's focus areas, including healthcare, education, environmental protection, and rural development, with a significant portion of CSR funds allocated to rural development initiatives. The analysis also touches upon the bank's historical involvement in CSR, predating mandatory regulations, and its structured approach through the SBI Foundation and Corporate Centre. The report further emphasizes the bank's dedication to sustainable development and its role as a responsible corporate citizen through various community service banking initiatives.

A Report on
Corporate Social Responsibility of
State Bank of India
ASSESSMENT 2
ACC706 – Accounting Theory and Issues T3 2018
Submitted to: Demi Chung
Submitted by: Ana Caroline Coutinho de Almeida – 11700864
Sahara Pokhrel – 11800554
Rita Akhter – 1180054

Executive Summary
The main aim of this report is to highlight the policy andactivities done under corporate
social responsibilities of State Bank of India (SBI), anIndian banking firm which has many
branches all around India. The report provides a cohesive and significant evaluation of
SBIviewing concern for several matters asbenefits to stakeholders, ethics, environmental and
socio-economic issues. SBIhas always focused on achieving its long-term goals by
providingits clients with excellent service. In a nutshell, the report is centred on the bank’s
CSR towards its stakeholders.

Introduction
The State Bank of India (SBI) is one of the prevalent financial services firm in India, that
provides wide range of services to institutional customers, individuals, public bodies, large
corporate and commercial enterprises. The main headquarter of SBI is at Mumbai and it
offers products and services to the customers through its several subsidiaries, branches and
outlets, associate companies and joint ventures.It provides services as life insurance, credit
card, merchant banking, mutual funds, pension fund management, factoring, security
trading, and primary dealership in the money market. Likewise, SBI operates under the
State Bank of India (SBI) Group which also comprises of various non-banking and foreign
banking subsidiaries and joint ventures (Group, n.d.).The State Bank Group has the largest
network of banking branch all over India with over 16,000 branches, among which the
State bank of India comes under 10th most renowned company in the world as per Forbes
and they are the only Bank which is authorised 74% stake in the insurance business.
The bank functions in four business divisions, namely Retail Banking, Treasury,
Wholesale/ Corporate Banking, and Other Banking Business. All personal banking as well
as lending activities to corporate customers having relation with branches in the National
Banking Group, is controlled by retail banking. Likewise, the treasury segment handles
foreign exchange and derivative contracts which includes investment portfolio. The
lending activities of Stressed Assets Management Group, Corporate and Mid Corporate
Management Accounts Group is looked after by the wholesale/corporate banking (IIFL,
n.d.).The company has expanded its business named as SBI Foundation with the aim of
making improving the lives of underprivileged and be an institute that promotes equality
and growth.
Corporate Social ResponsibilityPhilosophy and Policy
State Bank of India introduced the concept of Corporate Social Responsibility(CSR) in early 1973.
Back then, it covered both banking as well as non-banking activities such as health camps, blood
donation camps, tree plantation, adult literacy etc, under the name of Innovative Banking. Initially, it
emphasied on assisting weak and downtodden groups of the society by stipulating opportunities for
the upliftmentin their economic condition.Through all these community service, bank plays the role of
a responsible corporate citizen and discharges its corporate social responsibility to the community
(State Bank of India , n.d.).
The corporate philosophy of SBI can be listed as:
 The bank itself is a corporate citizen and owes a sombre duty towards the under-privileged
and less fortunate members of the society in which it operates its business.
 The bank motivates its staffs to understand people around them and put effort into removing
unquestionable social and developmental gaps. Doing so will not only improve the image of
the bank, but It will also lead to self-development of the staffs.
Further, as per the CSR policy ofSBI, the bank is committed to use value-driven engagement to
enhance the value of stakeholders. Similarly, it works for the social and economic well-being of
people specially the less fortunate and under-privileged members of the society. Lastly, SBI

continually works to reduce the direct and indirect influence of its operations over the environment.
The Sustainable Development Policy of SBI has been divided into three categories – Environmental
Responsibility, Social Responsibility and Economic Responsibility which is applicable to all the
business groups of SBI. Once the policy is made, it is formulated throughout the departments and is
communicated to all employees through internal portals, induction program, orientation etc. The
employees of SBI follow a vital complaint handling procedure to identify and resolve grievance.
CSR’s disclosure
SBI introduced concept of CSR in early 1973, named as Innovative Banking with a motive to
assist groups that belonged to downtrodden and weaker sections by giving opportunities for
upliftment in their economic condition.The idea of corporate social responsibility was fristly
brought by The Companies Act, 2013 by mandating that each company should set aside 2%
of their net profits for social activities but in context of SBI, it was assigned to pay only 1%
of its total profit as per RBI Regulations as SBI’s CSR activities are done through the SBI
Foundation and Corporate Centre with support of sixteen circles, Apex Training
Institutes(ATIS) and Branches and Administrative Offices.
The vision statement of SBI is to be a bank which brings sustainable development in the
lives of underprivileged group whereas its objective is to engage in the activites that benefits
the skill development, health, education, disaster relief, environment protection etc sections
of such less fortunate society.Being a parent company, the Board of the Bank’s Corporate
Social Responsibility Committee (CSRC) ensures an apparent monitoring procedure for
implementation of projects operated by the foundation.The ceiling and allocation of budget is
done as per the instructions provided by Reserve Bank of India (RBI). The bank can pass
donations of 1% of the profits from previous year out of which 0.75% is to be allocated for
Normal Donations like to voluntary organizations, public charitable trusts, NGOs etc.
Similarly, the rest 0.25% is for National DonationsI,e, donations recognised by State or
Central Government like national defend fund(State Bank of India , n.d.). Further, the policy
states that the bank can not carry forward any amount unused from the acceptable limit of any
year for use in following years and should provide reasons for not spending the allocated
budget in the Directors’ Report.
With the motive of improving overall socio-economic status, the bank has directed its CSR
activities on following areas:
i. Focuses on the primary and preventive health care
ii. Provides knowledge to people about hygiene, sanitation and provision of safe
drinking water
iii. Conducts enviornment protection activities like tree plantation, water and soil
conservation, wildlife conservation, rain harvesting etc
iv. Promotes games and sports
v. Works for the maintenance and restoration of historic monuments
vi. Provides assistance during natural calamities like earthquake, draught, flood etc
vii. Supports schools to promote education for all, specially girls’ education and
introducing digital education

viii. Works for spreading IT education among downtrodden classes throughout the remote
areas of the country
ix. Supports empowerment of youth, women, children and senior citizens
x. Conducts entrepreneur development prgrams and supports livelihood
xi. Works for rehabilitation and welfare of poor and handicapped, war widows, armed
forces and others
There are several other areas as well that is looked after by the bank but above mentioned
are the main focused areas. The main purpose of CSR is to have a lasting impact that benefits
the deprived sections of the society by having maximum utilisation of available funds and
discouraging the use of donation in recurring expenses, sundry items, construction activities
or acquiring of real estate etc. For that, there must be euqitable distribution of donations
among the Circles rather than limiting donation to few institutions. All the activities done
under CSR by SBI is controlled by CSR Committee. Its functions are to provide directions
for the effective implementation of CSR Policies of the bank, conduct meetings quarterly and
review the CSR activities performed in previous quarter and provides suggestions to improve
the functioning of the activities. In a nutshell, the bank provides full disclosure of its CSR
policy, composition of CSR Committtee and details of sectoral spend.
Analysis
CSR activities aims to sync the needs of the organization with that of the society and integrate the
social, economic and environmental needs that would help in sustainable development in the future.
In case of SBI the company has been the pioneer of CSR in India and have always tried to give back to
the society through its CSR activities and goals(Boghossian, 2017). These CSR activities of the bank
are known as Community Service Banking. With the legal framework making it compulsory for the
companies to contribute 2% of the total profit every year in CSR based activities it becomes
imperative that there is a huge growth in the same, but in case of SBI, the bank has been actively
participating in such activities before that and this has been a pioneer in this field. It helps the bank
to play the role of a responsible corporate citizen and discharge its social responsibility accordingly.
Few of the CSR projects of the bank includes-
SBI Children Welfare Fund-
This was founded in 1983 with the aim to support the children that are underprivilege and
downtrodden and provides them with necessities like food clothing along with supporting their
education including vocational training and health care. The contributions for the same are made by
the staff members and equal contributions are made by the Bank. The main aim is to provide these

children with all kinds of support and that is done through guided channels which involves a lot of
NGOs and orphanages and schools.
Research and Development Fund
This was founded in 1977 with the aim of supporting the research work that was done by the bank
mainly. The main aim in this case was to grant research funds to universities and institutions for
undertaking research that was directed towards the Bank and banking industry and having indirect
relevance to the same. In this case the bank gives preference to projects that are related to CREDIT,
particularly in the field of renewable energy and sustainability and these research studies would be
used in banks that would give them relevance to review the performance of the bank
annually(Charles H, et al., 2015).
Overall CSR aims of the company
The main aim of the company with respect to its CSR activities would include-
1. Focusing majorly on health care programs.
2. Promoting education specially of the girl child.
3. Focusing on rural development through integrated development approach.
4. Supporting empowerment of children and women and senior citizens.
5. Welfare and rehabilitation of the poor people and armed forces and other.
6. Environmental protection like the water conversation and energy conversation and rain
harvesting, wildlife protection etc(Coate & Mitschow, 2017).
7. The bank has also aided during natural calamities like the earth quake, floods, drought etc.
8. The bank also aims to dissipate information technology information to the remotest area of
the country so that technology boom is there, and people are able to get access to it from all
end. The main purpose of the bank is to spread IT education to the needy people.
The Case
According to the last SBI’s Corporate Social Responsibility report (2017-18), donations and
investments are currently being done towards health care; education; sustainability and
environment; arts, culture and heritage; empowerment of persons with disability; and rural
development. Among the cited focus areas, more than half – 55.28% is being sanctioned to
rural development, followed by arts, culture and heritage, with 20.69% of the budget. The

remaining focus areas receive less than 10% of total budget each. These numbers show the
relevance that State Bank of India gives to rural development.
Rural development refers to the process of improving the quality of life and economic
welfare of people living in relatively isolated and sparsely areas. In India, nearly 70% of its
population lives in rural areas. The main characteristics of this rural population includes high
level of unemployment, low levels of literacy and income, mass poverty and poor nutrition
and health status (SBI Foundation report, 2018). State Bank of India Foundation develops
these areas by integration village development and bringing innovation through talented
urban youth.
The banking industry is one of the few that are considered environmentally neutral once they
are not directly related with the environment. Because of that they are considered a non-
polluting sector (Nieto, M 2017). Thus, banks often focus on different matters, as indicated
through SBI’s CSR report.
Perhaps the importance given to rural development goes beyond altruism and social
responsibility. The fact that most of SBI Foundation’s budget goes toward this area might
indicate that the company has some sort of win out of that.
A common bank provides products and services that aims profit, and they avoid clients that
costs them too much money or that are more likely to fall behind on their debts. As a result,
individuals from low-income communities tend to have less opportunities to borrow. On the
other hand, ethical banks support low-income communities, by saying that this approach can
benefit the country, considering it raises national tax revenues and lowers the number of
people who are dependant on government pensions (Deka, G, 2016). State Bank of India is
run by the public sector, which means that gains to the community is also a gain to the
institution besides profit only.
A study taken in 2013 showed that customers operating e-banking increases every year
(Chilumuri, S. 2013). These results show an improvement on the average person access to
internet and smartphone, which is directly related to their economic situation. Besides such
improvement, the results also lead to a decrease in costs to State Bank of India and other
banks, once the need of spending time with client’s face-to-face plummets. Most of these
people that now have access to these technologies are from rural areas, and the fact that
investments are being made in such areas, help SBI and other financial institutions to reduce
costs in on a short-term basis. The development in these rural areas also leads to more
individual economically healthy that are considered prospective clients.
System-related Theory
The State Bank of India has its own branch that is focused on the social responsibility duties
of the company, which is called State Bank of India Foundation as stated above. SBI
Foundation has its own annual report where information such as financial statements, board
of directors, director’s report and vision/mission are disclosed as any other company that is
profit focused. SBI Foundation has its own company structure, that complies with State Bank
of India’s Corporate Social Responsibility (CSR).

Three accounting theories are system-oriented, which means that information disclosed by
companies considers other areas besides economic, such as social and environmental
considerations in relation to decision making (Rankin, M., Ferlauto, K., McGowan, S. and
Stanton, P. 2017). The system englobes the influence of the companies in the society – which
may include employees, consumers, media, government, suppliers, public – and the other
way around, influence of the society in the company.
Even though it can be seen correlation between SBI’s disclosure with the three system-related
theories – Stakeholder Theory, Legitimacy Theory and Institutional Theory, the theory that
adjusts better to State Bank of India’s case and that is focused in this report is the Institutional
Theory. According to Meyer, Boli and Thomas, institutions are cultural rules giving meaning
to certain activities and entities, integrating them into bigger schemes. The Institutional
Theory connects SBI Foundation’s projects to values of the society. The focus areas which
SBI Foundation makes donation to are areas of great importance and value to the society,
since they improve the well being of many communities across the country – a common
society guideline. SBI’s Foundation CSR has characteristics are likeother companies from the
banking industry. As stated previously, 2% of the profit of Indian companies are allocated to
Corporate Social Responsibility, 1% for State Bank of India due to the fact it is a public
sector company. The donations and investments made with this fraction can be identified in
SBI’s Foundation Annual Report, which shows many different projects with the purpose to
show to the community and other stakeholders that the company is following the standard
structure imposed by common guidelines. The donations are made to projects that are
standard rather than innovative. Besides that, the disclosure is also similar to other
companies’ practices, and it is made to emphasize how the projects improve the society
wellbeing.
Conclusion
Based on the overall analysis it can be said that the company has indulged in a lot of CSR
activities and have completed all of them as per the requirements of the authorities. They
have spent 2% of the total revenue of the company for CSR activities and have made relevant
disclosures regarding the same in their annual report. The company have done a lot of CSR
activities and there is also some scope of improvement given that there are many such areas
like environment conservation and wildlife support that the company can indulge it. It can
also help in innovation in technology and development of the same and that can be included
in CSR activities. CSR is all about giving to the society in which a company is operating and
making sure that their activities do not harm the environment in any way, the overall aim
should be to achieve sustainable growth and development so that the future is also secured
along with the present. In case the company fails to support such CSR activities then the
authorities can take strict legal action against them. SBI as a brand has helped in the growth
and development of many such activities and that has created a benchmark for the other
banks to follow and make an impact based on that. It is thus important that the company
should keep this effort going so that in future the companies follow the footsteps of SBI and
is encouraged to support sustainable development and growth in general.

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