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PRACTISE OF
BANK OF KATHMANDU LIMITED
A Seminar Paper
Submitted by
Submitted to
Faculty of Management
Purbanchal University
Biratnagar, Nepal
July, 2014
Kathmandu
CORPORATE SOCIAL RESPONSIBILITY
PRACTISE OF
BANK OF KATHMANDU LIMITED
A Seminar Paper
Submitted by
Submitted to
Faculty of Management
Purbanchal University
Biratnagar, Nepal
July, 2014
Kathmandu
CANDIDATE’S DECLARATION
I, ……………….., certify that the work embodied in this seminar paper entitled
“CORPORATE SOCIAL RESPONSIBILITY PRACTISE OF BANK OF
KATHMANDU LIMITED” is my own bonafied work carried out by me as in the form of
partial fulfillment of the requirement for the Master of Business Administration (MBA),
under Faculty of Management, Purbanchal University, Nepal.
I declare that I have faithfully acknowledged, given credit to and refer to the researchers
wherever there works have been sighted in the body of the seminar paper.
Kathmandu Name
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VIVA -VOCE SHEET
Submitted by:
Name………………………
Entitled
And found that the seminar paper to be original work of the student and prepared
according to the prescribed format. We recommend the seminar paper to be accepted as
partial fulfillment of the requirement for the Master of Business Administration (MBA),
faculty of management, Purbanchal University, Nepal
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ACKNOWLEDGEMENT
Firstly, I would like to put across my gratitude to Purbanchal University for providing me
the opportunity to carry out a seminar paper on CSR. This study has been carried for the
partial fulfillment of Master of Business Administration (MBA) of Purbanchal
University. This study was prepared in order to recognize and examine various CSR
activities of BOK.
I would like to express thank our Academic Director, Mr. Narendra Shrestha for
providing me valuable guidelines, path and significant comments for the completion of
this seminar paper. I am also appreciative to the staffs of the BOK for providing needed
data and information.
I would like to express my admiration to our Facilitator Prof. Dr. Upendra Koirala for
providing me valuable guidelines, path and significant comments for the completion of
this seminar paper.
Lastly, I would like to express great thank to my Parents, for their love and continues
blessings.
Any error in this seminar paper is my own responsibility and I would be grateful for any
kinds of suggestion and idea.
……….……………….
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TABLE OF CONTENTS Page No.
Content
1. Introduction 1
2. Objective of study 2
3. The statement of Problem 2
4. Significance of study 2
5. Limitation of the Study 3
6. Literature Review 4
7. Research Methodology 8
a. Research Design and Methodology 8
b. The Sampling
c. Sources of Data 8
d. Data Presentation and Analysis 9
8. Profile of Bank of Kathmandu 10
9. Observation and Analysis
a. Existing CSR Practices 12
b. Problems of CSR in the Company 18
c. Ways to solve the Problems 18
d. Major findings 19
10.Conclusion and Recommendation
A. Conclusion 20
B. Recommendation 22
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List of Abbreviations
BOK : Bank of Kathmandu
CSR : Corporate Social Responsibility
ATM : Automatic Teller Machine
BOD : Board of Directors
Ltd. : Limited
A.D. : Anno Domini
Rs. : Rupees
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ABSTRACT
This study has undertaken to understand the various concepts of corporate social
responsibility, its relevance and importance in terms of competition, customers, workers,
society and environment .This study has evaluated and revealed how company has
adopted various CSR practices and activities. Today each and every organization has
realized the significance of CSR. Company today has started realizing that CSR is one
of the important matters connected with their survival in the society directly and
indirectly. This seminar paper shows various CSR activities of BOK over the years and
also has provided various suggestions to make BOK CSR more effective.
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1. Introduction
Concept
Corporate social responsibility (CSR) is also known as corporate citizenship. CSR policy
functions acts as a self-regulating mechanism whereby a business monitors and ensures
works with the spirit of the law, ethical standards, and international norms. In defining
company Vision, mission, goal, objective, Strategy Company should consider claims and
interest of various stakeholders. The stakeholder may be inside and outside. The inside
stakeholder are employees, shareholders, board of director, CEO. The outside
stakeholders are customer, creditors, suppliers, government, union, competitors, local
communities and the general public. Corporate social responsibility is the obligation of
the organization towards society. The concept of corporate social responsibility has
become popular in 1960s now it is adopted by many companies. The significance of CSR
is not only applicable in a profitable organization but also for other organization such as
government NGOS, INGO, public sector etc.
According to Matten and Moon, 2008- “At the core of CSR it is the idea that reflects the
social imperatives and the social consequences of business success”.
Traditionally in the United States, CSR has been defined much more in terms of a
philanthropic model. Companies make profits, unhindered except by fulfilling
their duty to pay taxes. Then they donate a certain share of the profits to charitable
causes. It is seen as tainting the act for the company to receive any benefit from
the giving.
The European model is much more focused on operating the core business in a
socially responsible way, complemented by investment in communities for solid
business case reasons.
2. Objective of Study
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The main objectives of this study are:
There were various problems which BOK was facing in regard to CSR.The main
problem of this report is to answer following questions:
What do you mean by CSR?
What are the CSR activities of BOK?
What are the CSR problems of BOK?
What are the ways to make CSR of BOK more effective and efficient?
4. Significance of Study
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5. Limitation of the Study
The limitations of Study are:
The study is based on limited time
The finding of the study may not be applicable to other organization
It coats only one element or division i.e. BOK
The data of only some years were collected for the study.
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6. Literature Review
a. Introduction
It is important for the researcher to be familiar with both previous theory and researches
published so far in the field of investigation or study. So, in order to assure its familiarity,
the researchers have to build upon the accumulated and recorded knowledge of the past.
Every research projects requires the review of concerned literature for the purpose of
determining the smooth contours for determining the right direction for doing the
research. Review of literature is an important part of any studies.
Objective of literature review
The various objectives of literature review are:
To become familiar with the study topic
To help in formulation of hypothesis
To help in identifying appropriate methodology and design for study
To save time of the candidate
The main concept of CSR initiated in the 1950‘s in the USA. Corporate Social
Responsibility became a subject of utmost significance for varied groups demanding
change in the business. During the 1980‘s to 2000, corporations recognized and started
accepting a responsibility towards society. Corporate social responsibility (CSR) focuses
on the wealth establishment for the optimal benefit of all stakeholders – including
shareholders, employees, customers, environment and society.
Earning more and more profits is a normal fact of every business unit but social
responsibility is an obligation to the people living inside and outside the business
organizations. Business comes in contact with various groups of society such as owners,
employees, customers, government, suppliers etc. The responsibility of business thus
includes contentment of these parties along with the owner. Today, the society as a whole
and media increasingly request companies to consider social and environmental problems
while doing business activities.
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b. Implication of CSR
The importance of CSR to organization are:
Helps in building cordial relationship with various stakeholder
Helps in building image among general public
Helps in differentiating organization from other
Employee withholding
Helps in sustainable development of country
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Davis (1960), social responsibility is a nebulous idea but should be seen in a managerial
context. He asserted that some socially responsible business decisions can be justified by
a long, complicated process of reasoning as having a good chance of bringing long- run
economic gain to the firm, thus paying it back for its socially responsible outlook.
Windsor (2001), article examined the future of Corporate Social Responsibility or the
relationship between business and society in long run. The researcher tried to find out
that whether the organization and society will come closer to each other in future or not
and what will be the changing phase of CSR. With the help of history or past trend of
CSR, Carroll’s model analysis and in global context, the researcher found three emerging
alternatives of CSR i.e. conception of responsibility, global corporate citizenship,
stakeholder management practices.
Woods (1991), CSR implies some sort of commitment, through corporate policies and
action. This operational view of CSR is reflected in a firm‘s social performance, which
can be assessed by how a firm manages its societal relationships, its social impact and the
outcomes of its CSR policies and actions.
Gond, Crane (2008), made an analysis on the distortion of corporate social performance
concept. The research analyzed that the past researches and found some reason of
emerging fall in the interest of corporate social performance research among the scholars.
The paper also suggested models on the basis of which the researcher explained that
why the CSP concept has lost its importance and development. Further, the researcher
depicted some model which the researcher can used in their research related to corporate
social performance. The paper argued that tensions and contradictions are the starting
point to develop the CSP concept. CSP has an umbrella of activities which need to
measure differently in order to move the researches from a simple concept to
development.
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methodology. On the basis of the interview of key persons of industries in Australia, the
term CSR has been explained. The industrialist revealed that CSR increasingly has
become significant. They shared their views of CSR in economic, legal and ethical roles
of business in society. Beside this, the industrialist viewed CSR as a model of corporate
reputation.
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7. Research Methodology
b. The Sampling
The population for this study consists of total numbers of employees, board of director
(BOD), management and all stakeholders. Due to short time period the overall population
could not been studied. The sampling method used for this report was judgmental
sampling. The CSR activity of 4 years was studied as a sample. The Conclusion and
recommendation of the study is based on 4 years CSR activities of Bank of Kathmandu.
c. Sources of Data
The data are collected from two types of sources i.e. primary and secondary sources. The
data are mainly collected from the bank of Kathmandu
Primary Data:
The primary data which were used in the collection of data are:
Discussion,
Interview
Questionnaires
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Secondary Data:
The secondary sources data which used in the collection of data are:
Company websites,
Magazines,
Newspaper,
Annual report
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8. Profile of Bank of Kathmandu
Bank of Kathmandu Limited has become a well-known name in the Nepalese banking
sector was established in 1995 AD. Bank of Kathmandu is committed to delivering high
quality service to customers, generating good return to shareholders, providing attractive
incentives to employees and serving the community as a whole through its various
activities.Bank of Kathmandu Limited (BOK) has today become a marker in the
Nepalese banking sector by being among the few commercial banks which is entirely
managed by Nepalese professionals. BOK started its operation in March 1995 with the
objective to push the Nepalese economy and take it to newer heights. BOK also aims to
facilitate the nation's economy and to become more competitive.
BOK since its establishment has been providing various types of services and products to
its customers. It has been providing deposit facilities such as current deposit, saving
deposits, fixed deposit, call accounts and recurring deposits providing various interest
rate its depositor. Similarly it is also providing various loans and advances its customers
which include housing loan, vehicle loans, and educational loans and personnel loans. It
has also been helping in business banking which includes small scale project finance,
trade finance, and other business credits. It also carries out various remittances and
money transfer \functions electronic fund transfer, demand draft, and travelers’ cheque.
It has all together 50 branches all over the country. It has also provided ATM services to
its customer. There are all together 58 ATM installed by BOK in various parts of country.
BOK also has BOK Extension Counters. It has around extension 8 Counters. It also has
24 branchless services in the country.
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Vision
Mission Statement
The Mission of bank is:
To offer financial services and become the "Bank of Choice" by dedicating the progress
and growth of the institution to the community, customers, employees and stockholders
by:
Core Values
The Bank has defined following core values for achieving the vision and mission:
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9. Observation and Analysis
2008-2009
Health
Environment:
Education
BOK provided financial support by purchasing tickets for the fund raising event
organized by Save The children for purchasing classroom and learning materials
to two government managed Early Childhood Development(ECD) Centers in
Kathmandu
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2009-2010
Health
Environment
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opened to Bindhyabasini Dharmik Kshetra Bikash Samiti for the development of
Bindhyabasini temple in Pokhara
Education
BOK provided financial Support to Help to the Helpless council for purchasing
educational materials for orphan children in local schools in Dharan for 5 yrs
It provided scholarship for Nepal army officers' children
BOK helped Prabhat Primary School of Surkhet for 2 years that includes
construction of school building provide salary provision for 2 teachers.
It provided financial support to Palanchok Bhagwati Uchha Madhyamik Vidhyalaya
for purchasing materials to upgrade the educational facilities of the school
2010-2011
Health
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15
Environment
Education
Others
BOK distributed educational and basic materials to women & children of Nepal
Women’s Foundation, Sankhu
With an objective of introducing general Banking services amongst general mass
of the country, Bank of Kathmandu Ltd. introduced “BOK Ghardailo Saptahaâ”
program and has been running it across different parts of the country. The sales
activity is carried as part of “Save for the Future” campaign and alongside also
promoted awareness regarding the importance of birth registration to every child
message. The “Ghar Dailo Saptaha” so far has been carried out in 9 different parts
of the country
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BOK felicitated Ms. Aasmani Chaudhary, recipient of United Nations award for
her contribution in development and empowerment of women and alongside
honored and presented gifts to other local women social workers in the Dang
district
Fund Support to Saathi and NGO working towards combating violence against
women & children in Nepal
2011-2012
Education
BOK provide financial support to Gyan Kunja Primary School, Sigana VDC
,Baglung for One year which includes construction of basic infrastructure like one
classroom, renovation of one classroom and construction of compound wall
BOK Support to Voice of` Children project-TV Program. The project is actively
involved in children’s rights and protection of children against physical and
mental abuse
Environment
BOK support WWF(World Wildlife Fund) tree Plantation event in Lumbini and
Bagmati Region during Earth hour
BOK Construct and renovation of Children’s Park in Central Zoo. Sponsorship of
information board inside the zoo for all animal enclosures
BOK Tie up with NTNC (National Trust for Nature Conservation) to support
fight against climate change regarding their “Think Locally Act Globally.
On every account opened in Bank of Kathmandu’s regional savings account
“BOK Pokhara Bachat Khata”, the bank will donate NPR 100 per account opened
to Bindhyabasini Dharmik Kshetra Bikash Samiti for the development of
Bindhyabasini temple in Pokhara. The Bank since the introduction of this account
has made a donation of NPR 322,000 to the temple
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Provide fund Support to Saankhu Heritage Society for Heritage Preservation
Program
Health
Provide fund Support to Netra Jyoti Sangh Nepal for conducting health camp
Provide financial Support to Yuva Apanga Sangathan Nepal
Financial Support to Maitri Samaj Nepal –Fellowship Society for musical event
of the visually impaired
Fund Support to Nepal Heart Foundation
Fund Support to Victims of Torture, Nepal (CVICT) for organising Health Camp
BOK Support to Rotary Club of Dillibazar for walkathon and health camp
Although BOK has been able to carry out its there are some problems in its CSR. They
are
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d. Major Findings
With the help of above observation and analysis, it shows that BOK is engaged in various
CSR activities. It is active in health, education, environment and heritage conservation
related CSR activities. The major finding of the study can be summarized with the help of
following table and figure:
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20
15
10
0
Health Environment Education others
The above bar chart shows various CSR activities of BOK over the year. The bar chart
shows that BOK is involved in 4 major kinds of CSR activities i.e. health, environment,
education and others CSR activities. The bar chart shows that BOK health related
activities are 23, Environment related activities are 22, education related activities are 10
and other CSR activities are 4.
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10. Conclusion and Recommendation
A. Conclusion
CSR is one of the most important trends followed by many organizations today. Today
organization needs to play important role for the protection and development of society
and environment. It is regarded obligation of organization to make cordial relationship
society and environment. The concept of CSR will help any organization gain long term
profitability and sustainability. It is more than the voluntary acts performed by the
company.
This report has studied the various CSR practice of BOK over the years and how it is
being implemented. BOK has realized that in order to gain long term profitability and
sustainability it needs to be engaged in various CSR activities. So, BOK has been
frequently involved in health, education, environment protection and local heritage
protection. It has also increased the awareness of Banking knowledge and ideas among
general public and citizens. This report shows that BOK has been making various cash
donations and is being engaged in various awareness events for the protection of social
interest and environment.
So, this report shows the significance of CSR in today’s organization. It shows that no
organization will sustain if it ignore CSR and its importance. SO, it is must for each and
every organization.
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B. Recommendations
Although the BOK is operating various CSR efficiently, there are certain aspects that it
can look around to make its CSR more efficient and effective. The findings of the studies
are suggestive and not prescriptive. Some of the suggestive measures are as follows:
BOK should make Periodic review of CSR related activities to know its
development and problem areas.
BOK follows same CSR activities over the year, so it should try to diversify its
CSR activities.
BOK should also direct its CSR activities towards its employee.
The Concept and significance of CSR must be integrated with overall company’s
vision, mission, objective and strategy
The concept of social auditing must also be integrated in overall auditing
activities.
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BIBLIOGRAPHY
WEBLIOGRAPHY