Intern at ional Journal of Applied Research 20 15; 1(11): 265-268

ISSN Print: 2394-7500

ISSN Online: 2394-5869
Impact Factor: 5.2
Customer perception towards corporate social
IJAR 2015; 1(11): 265-268
www.allresearchjournal.com
responsibility (CSR) in banking sector
Received: 18-08-2015
Accepted: 22-09-2015
Pooja Rani, MS Khan
Pooja Rani
Research Scholar, Department Abstract
of Rural Management, School CSR is the obligation of businessmen to pursue those policies, to make those decisions, or to follow
for Management Studies, those lines of actions which are desirable in terms of the objectives & values of our society”. CSR has
Babasaheb Bhimrao got popularity and contentious field of study since the 1970s. CSR which has largely been voluntary
Ambedkar University contribution, by corporates has now been Included in law. Now every company has to do CSR
(A Central University), activities which come under the guidelines of new companies act, 2013. This research paper tried to
Lucknow-25 know the consumer perception towards CSR practices in Indian Banking sector. Both Primary &
secondary data has been used for this study.
Dr. MS Khan
Associate Professor
Keywords: CSR, Banking sector, Customer, Perception, Companies act
Department of Rural
Management, School for
Management Studies, Introduction
Babasaheb Bhimrao The relationship of the company beyond the legal existence to the socio-economic scenario is
Ambedkar University well summarized by Berle (1959), the ‘company’ is not merely a legal institution. It is rather
(A Central University), a legal device for the publicly and by being socially responsible. It is, therefore, a combined
Lucknow-25 political, social, economical, and legal institution. This brings us to the concept of corporate
social responsibility (CSR) as corporations derive wealth from society, create wealth for
society, and earn profit by dealing with the wealth for society. Thus, in the larger
perspective, it is society that actually gives permission to business to operate in society and
earn money. This obviously demands that the business worlds pays for this permission by a
legitimate sharing of the wealth it is earning from society by sharing it with society.
There is not any prescribed definition regarding CSR but some different definition of CSR
shown in Table 1.

Table 1: definitions of CSR

CSR definitions from
Definition of CSR
different sources
“The obligation of businessmen to pursue those policies, to make those
According to Bowen
decisions, or to follow those lines of actions which are desirable in terms of
(1953)
the objectives & values of our society”
“ The firm’s considerations of, and response to issues beyond the narrow
According to Davis
economic, technical, and legal requirements of the firm to accomplish social
( 1973 )
benefits along with the traditional economic gains which the firm seeks”
“ The social responsibility of business encompasses the economic, legal,
According to Carroll
ethical, and discretionary expectations that society has of organizations at a
( 1979)
given point of time”
According to WBCSD “The commitment of business to contribute to sustainable economic
(2001), as cited in development, working with employees, their families and the local
Correspondence Jamali (2006) communities”
Pooja Rani
Research Scholar, Department
Corporate social responsibility & companies act, 2013: The act enacted on 29 August
of Rural Management, School
for Management Studies, 2013 on accord of Hon’ble President’s assent, has the potential to be a historic milestone, as
Babasaheb Bhimrao it aims to improve corporate governance, simplify regulations, enhances the interests of
Ambedkar University minority investors and for the first time legislates the role of whistle-blowers. The new law
(A Central University), replaced the nearly 60-year-old Companies Act, 1956. The 2013 Act has introduced several
Lucknow-25
provisions for changing the way to do business of Indian corporates and it also introduced a
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new provision regarding spending on Corporate Social making profit the shareholders. Carroll developed a
Responsibility (CSR) activities. On the basis of CSR theoretical framework of CSR, where he proposed four
provisions it became mandatory for Indian companies and dimensions of CSR. These are economic, legal, ethical and
Companies have to spend a particular amount on CSR philanthropy of CSR. Carroll defined economic CSR is
activities as well. They have to mention their report measured in terms of shareholders wealth maximization
regarding CSR activities in a prescribed format in their generates profit, being competitive (high quality & low
website. The Reporting of CSR will be implemented on an cost), operational efficiency, and continuous profitability.
annual basis commencing from fiscal year 2014-15. Carroll defined legal responsibilities of CSR dimension is
measured in terms of the extent that organization’s
Objective of the Study activities are consistent with laws and regulations, law-
 To know the concept of Corporate Social Responsibility. abiding corporate citizen, fulfilling legal obligation, and
 To know the customer perception regarding CSR goods and services must meet the minimal legal
implementation of Indian Banking sector. requirement. Carroll defined Ethical responsibility of
CSR dimension is measured in terms of societal mores
Literature Review: The concept of CSR originated in the and ethical norms, extent that organization adjust
1950‘s in the USA but it became prevalent in early 1970s. themselves to emerging moral norms, degree of
During the 1980‘s to 2000, corporations recognized and compromising ethical standards or norms, corporate
started accepting a responsibility towards society. citizenship behavior accepted by society and the extent that
Corporate social responsibility (CSR) focuses on the organization go beyond the legal and regulation
wealth creation for the optimal benefit of all stakeholders requirements to maintain integrity of the organization.
– including shareholders, employees, customers, Carroll defined Philanthropic is the highest level of CSR,
environment and society. where it will be measured in terms of philanthropic and
According to Bowen, ―CSR refers to the obligations of charitable expectation of society, assistance provided to fine
businessmen to pursue those policies to make those decisions and performing arts, extent that managers and employees
or to follow those lines of relations which are desirable in of the organization involvement voluntary charitable
terms of the objectives and values of our society. activities organized by community, and assistance provided
Carroll, (1991) [2] defined that CSR is the social by organization to the projects that enhances “quality life”.
obligations towards wider stakeholders, environment while

Fig 1: Pyramid of social responsibility by Carroll (1991) [2]

Namrata singh, Rajlaxmi srivastava et al. (2013) proposed a activities for social spending and allocation of separate funds
study on CSR practiced & CSR reporting in Indian banking for this purpose. Moreover, to have an impact of the CSR
sector, concluded that at present the Banking Sector spending and utilization of allocated budget, there should be
performing their banking services more effectively in a system of periodical monitoring and reporting to the Board
comparison with the past and also started working of Directors.
towards social banking that is Corporate Social
Responsibility. Maximum number of banks whether related Research Methodology: A survey was conducted to find out
to private sector or public sector highly performing CSR the perception of customer regarding CSR. The survey was
activities as per their priority but if we look towards the CSR conducted to banking employees, Lucknow. The convenient
reporting then we can see that most of the banks are still not sample of 100 banking employees was taken for the study
disclosing their amount for such initiatives in their websites. out of which 85 employees gave their feedback.
After the involvement of RBI the CSR becomes the The study is descriptive and exploratory in nature. Primary
important part of Banking Sector but still more regulations data has been collected through questionnaire with the
and new policies are required to implement the concept of Respondents. A well, structured questionnaire was designed
CSR in Indian Banking Sector. for the study. Non probability sampling has been used to fill
Suman kalyan chaudhary, Sanjay kanti das et al. (2011) the questionnaires. Secondary data has been obtained from
explored a study on Practices of Corporate Social existing literature, published books, articles published in
Responsibility (CSR) in banking sector in India: An different journals, Banks website, news papers and
assessment resulted that in India there is a need to promote a magazines. The opinion was later analyzed and computed by
drive in banking Companies towards greater accountability mean, percentage.
on Corporate Social Responsibility (CSR). In order to attain
the social objectives, there is a need for framing a CSR Result & Data Analysis: According the responses given by
Policy in every banking company for prioritization of the respondents following analysis has been calculated.
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Fig 2: Customer perception regarding CSR implementation

The above given chart shows the percentage of customer agreed, 40% are agreed, 7% are neutral on this
perception regarding nine statements about CSR statement.
implementation by the Banks.  Bank should be more focus on customer welfare CSR
 CSR should be responsibility of every Bank: The 50% activities: The 31% customers are agreeing, 15% are
customers are strongly agreed, more than 30% neutral & 52% are strongly disagreeing with this
customers are agreed & more than 10% customers are statement.
neutral with this statement.  Bank should be more focus on poverty eradication
 CSR is a strategic tool for economic objective: More CSR activities: The 73% customers are strongly agreed,
than 50% customers are neutral, near about 30% 14% are agreed, and only 12% are disagreeing with this
customers are strongly agreed & around 15% customers statement.
are agreed & very few customers are strongly  Bank should provide financial support to the poor
disagreeing with this statement. people through CSR activities: The 45% customers are
 Focus on charity & donations: The 40% of customers strongly agree, 24% are agree, 20% are neutral, 10% are
are agreed, 30% customers are strongly agreed, more disagree with this statement.
than 10 % are neutral & around 15% are disagreeing  CSR has a great impact on customer of Banks: The
with this statement. 56% customers are strongly agree, 32% are neutral, 11
 CSR is helpful to solve society problems: Around 50% % are disagree with this statement.
customers are agreed, 24% are agreed, 10% are neutral  Bank should be more focus on health care activities:
and more than 10 % are disagree with this statement. The 20% customers are strongly agreed, 50 % are
 Bank should be more focus on vocational training, agreed, 25% are neutral & only 5 % are disagree with
education, credit counseling for rural development this statement.
through CSR activities: 53% customers are strongly
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Conclusion: According to the result of data analysis it is

proved that Customers has a positive approach towards
corporate social responsibility. Very few customers are
agreeing that CSR is a strategic tool for earning profit. Most
of customers have given believe that CSR is a social
responsibility tool & very helpful to solve the issues of
society. The customers also believe that Bank should be
focus on areas like healthcare, women empowerment, rural
development, poverty eradication, customer welfare etc.
Many customers are neutral and disagreed on the bank’s
social responsibility towards customer welfare. The
customers are very strongly agreed that banks should be
more focused on the poverty eradication. Because when
poverty will be reduce than country will also developed
automatically. It is also shown that CSR activities done by
the banks develop a positive impact on customers’
perception towards banks. I would suggest that CSR should
be meeting the general population & should be based on the
principles of paying back to the society.

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