EXECUTIVE SUMMARY

Corporate social responsibility (CSR) has become an important part to the organization and
community. Maximizing profit to the shareholder is the ultimate goal but at the same time
organization should contribute to the community who contribute to the profit of the organization.
Its also played an important factors is establishing the company image and reputation.
According to World Business Council for Sustainable Development, CSR is the continuing
commitment by business to contribute to economic development while improving the quality of
life of the workforce and their families, as well as of the community and society at large. CSR
looks beyond profit and instead focuses on how business can benefit the greater community
(Harris, 2016).
Over the years, the obligation to perform CSR is said to have arisen due to various reason. Some
cited that the pressure of prevailing humanistic, religious and democratic value and attitude as
the important factor (Frederick, 1994). The idea of social responsibility exists in most of the
religions and philosophy in the world.
Financial Institute whether Islamic or conventional also similar to other organization which does
CSR to the community. In fact, Islamic financial institutions have greater responsibility and
expectation to give more to community. It can be seen as a collective religious obligation (fardh
kifayah). Conventional financial institution does not have this obligation.
This paper will evaluate contribution by both Islamic financial institution and conventional in
term of their contribution and activities. Bank Muamalat and Public Bank have been selected for
this study. Although Public Bank have Syariah window in their group, the analysis will look at
the group activities rather than the entities itself.

Bank Muamalat Malaysia Berhad

Bank Muamalat is one of the two independent full-fledged Islamic financial institutions. The
Bank was established on 1 October 1999 from the Islamic banking divisions of the former Bank
Bumiputra Malaysia, Bank of Commerce (Malaysia) and BBMB Kewangan. The shareholders
comprise DRB- HICOM, with 70% shares in the bank while Khazanah Nasional owns the
remaining.
Being among the pioneer of Islamic banking, the Bank is strongly supported by Shariahs
scholars who are highly qualified and experienced in the Islamic jurisprudence, advising not only
in issues pertaining Shariah products and services but also as advisors to parties that are planning
to raise Islamic Capital Issues or other new innovative products.
Bank Muamalat like other organization also performing CSR consistently. Since 2010 Bank
Muamalat does not stop from organizing or contribute to various organizations. Profitability is
not the only objective but Bank Muamalat also stated that their contribution to the society is
important in line with what has been stated in the Quran:
It is not righteousness that you turn your faces towards the East and the West, but righteous is
the one who believes in Allah, and the Last Day, and the angels, and the Book and the prophets
and gives away wealth out of love for Him (God) to the near of kin and the orphans and the
needy and the wayfarer and to those who ask and sets slaves free (Surah Al Baqarah: 177)
Together with Tabung Mawaddah, Bank Muamalat philanthropic arms, CSR team has work
closely with other organization within community and national level agencies to help others in
need.
There four main areas that Bank Muamalat has identify in an effort to contribute to the
community which is:
1234-

Workplace
Environment
Community
Marketplace

Workplace can be described as corporate social responsibility towards their organization or their
employee. In year 2016, Bank Muamalat sends 6 of their employees to perform pilgrimage in
Mecca. They also celebrate fathers day on 19 th June 2016. During this event, 800 food and
present including flowers were given to the employees. Despite that, blood donation and medical
checkup also has been conducted as well as sports day. These are all event conducted in year
2016.
In year 2015, Bank Muamalat even conducted Tilawah of Alquran amongst its employee. Prizes
were given to the winners. Sending their employees to perform pilgrimage is a yearly event
which also has been held in 2015.
Below are the events that have been conducted on yearly basis:
1- Performing Umrah by the employee
2- Medical checkup and blood donations
3- Sport Event
The second are that Bank Mualamat focus their CSR is environment. So far, there is only one
program which was held in Bagan Lalang in 2014. The program is called Seeding and Hatchery
Mangrove Trees and River Cruise.
Bank Muamalat CSR program have visited lots of schools and communities as part of their
contribution towards community. Together with Tabung Mawaddah, CSR program have donates
their portion to build new school building, surau and also sponsoring student to further studies.
The last area focus by Bank Muamalat is the marketplace. In this area, Bank Muamalat organize
various event participate among the player in the Banking industries.
In term financial impact on CSR, the annual report does not specifically mention about total
contribution. However, from audited account, we can see that total donation made in financial
year 2016 was RM10.8 million compare to only RM3.1 million in 2015.

Below are the summary of other Overhead and expenditure extract from Bank Muamalat Audited
Account:

However, these numbers are small compare to contribution made in 2013 where Bank Muamalat
spends RM22.9 million for donation and Sponsorship.

Having spent vast amount of money, Bank Muamalat clearly serious in making sure their CSR
program met the target and able to reach various community.

REFERENCES
Harris, Amanda (2016, June 21). The Importance of Corporate Social Responsibility
for your Business Image. http://www.kcdpr.com/the-importance-of-corporate-socialresponsibility-for-your-business-image/
Frederick, W.C. 1994 From CSR1 to CSR2: The maturing of business and society
thought. Business and Society Vol 33 No 2, pp 150-164
Audited

Financial

Report

as

at

March

2016.

http://www.muamalat.com.my/corporate-overview/financials/2016.html
Audited

Financial

Report

as

at

March

2015.

http://www.muamalat.com.my/corporate-overview/financials/2015.html
Audited

Financial

Report

as

at

March

2014.

http://www.muamalat.com.my/corporate-overview/financials/2014.html
Bank

Muamalat

Annual

Report

2015.

http://www.muamalat.com.my/downloads/corporate-overview/annual/2015_BI.pdf
Bank

Muamalat

Annual

Report

2014.

http://www.muamalat.com.my/downloads/corporate-overview/annual/2014_BI.pdf