Corporate social responsibility (CSR) spending by Bangladesh’s banking sector has dropped sharply—falling by nearly half in recent years—as profitability weakens under the weight of irregularities, corruption, and structural stress in the financial system.

According to the latest data from Bangladesh Bank, total CSR expenditure by banks declined to Tk 345 crore in 2025, down from Tk 615.96 crore in 2024 and significantly lower than the peak of Tk 1,143 crore recorded in 2022.

Quoting central bank findings, The Daily Industry reports that declining profits—driven in part by governance failures and financial irregularities during the tenure of the ousted Awami League government—have forced banks to cut back on social spending, which is typically financed from net earnings.

Profit Erosion Hits Social Spending: CSR expenditure in Bangladesh’s banking sector is directly linked to profitability. Under existing regulations, banks that incur net losses are not allowed to spend on CSR activities. As a result, a growing number of banks slipping into losses or facing reduced earnings have scaled back their contributions.

Officials and analysts quoted by The Daily Industry noted that several banks that once led CSR initiatives are now struggling financially, while others have reduced their allocations due to shrinking profit margins. 

“The decline in CSR spending reflects deeper problems in the banking sector, particularly the impact of poor governance and loan irregularities on profitability,” a senior banking analyst told The Daily Industry.

Long-Term Trend Shows Volatility: Data from Bangladesh Bank reveals a fluctuating but overall declining trend in CSR expenditure over the past decade: 2015: Tk 527 crore, 2016: Tk 497 crore, 2017: Tk 744 crore, 2018: Tk 905 crore, 2019: Tk 648 crore, 2020: Tk 968 crore, 2021: Tk 759 crore, 2022: Tk 1,143 crore (peak), 2023: Tk 924 crore, 2024: Tk 615.96 crore, 2025: Tk 345 crore. 

The sharp decline between 2022 and 2025 highlights the growing financial strain across the banking industry, with CSR budgets often being among the first areas to be cut.

Standard Chartered Tops CSR List in 2025: For the first time, a foreign bank has emerged as the top CSR spender in Bangladesh. Standard Chartered Bank led the list in 2025 with CSR spending of Tk 33 crore. It was followed by: EXIM Bank – Tk 27 crore, Jamuna Bank – Tk 25 crore, BRAC Bank – Tk 25 crore.

This marks a significant shift from previous years when local private banks dominated CSR rankings. In 2024, EXIM Bank Limited topped the list with Tk 49 crore in CSR spending, followed by The Premier Bank Limited with approximately Tk 47 crore. Mercantile Bank Limited and Islami Bank Bangladesh Limited each spent Tk 42 crore, while Jamuna Bank Limited contributed Tk 36 crore. 

However, major changes in the boards of several banks following the political transition in August 2024 led to a reshuffling of priorities and a decline in CSR spending among previously leading institutions. 

Sector-Wise Allocation of CSR Funds: The central bank has prescribed specific guidelines for CSR expenditure, ensuring a balanced distribution across key social sectors. 

According to Bangladesh Bank regulations: 30% must be allocated to education, 30% to healthcare, 20% to environment and climate adaptation, 20% to other areas such as income-generating activities, disaster management, infrastructure, sports, and culture.

In 2024, banks spent Tk 615 crore on CSR, distributed as follows: Education: Tk 108 crore, Healthcare: Tk 155 crore, Environment and climate: Tk 22 crore, Other sectors: Tk 330 crore. In 2025, the reduced CSR budget of Tk 345 crore was allocated as: Education: Tk 98 crore, Healthcare: Tk 86 crore, Environment and climate: Tk 34 crore, Other sectors: Tk 126 crore. 

Despite the overall decline, spending on environmental and climate-related initiatives saw a slight increase, reflecting growing awareness of climate risks in a vulnerable country like Bangladesh. 

Governance Reforms and Their Impact: Banking sector stakeholders believe that recent efforts to improve transparency and governance have had a paradoxical effect—reducing short-term profits while potentially strengthening the system in the long run.

Abdul Hai Sarker, chairman of the Bangladesh Association of Banks and Dhaka Bank PLC, told The Daily Industry: “After the change in government in 2024, transparency has returned to the banking sector. This has reduced profits, which in turn has led to lower CSR spending. However, we are now focusing on areas where more people can benefit.”

He added that with a new political government in place, banks expect to gradually increase CSR expenditure in the coming years, provided profitability improves.

Link Between Corruption and Declining CSR: The report by The Daily Industry highlights how past irregularities and corruption have eroded the financial health of banks, leaving less room for social contributions.

Non-performing loans, weak risk management, and politically influenced lending decisions have all contributed to declining earnings, forcing banks to prioritize balance sheet stability over discretionary spending like CSR. Financial experts argue that unless these structural issues are addressed, CSR spending will remain subdued.

Broader Implications for Society: The decline in CSR expenditure has wider implications for social development in Bangladesh, as banks play a crucial role in funding education, healthcare, disaster relief, and community development initiatives. 

Reduced funding in these areas could affect vulnerable populations, particularly in rural and underserved regions where CSR projects often complement government efforts. “CSR is not just philanthropy—it is an important tool for inclusive growth,” an economist told The Daily Industry. “A sustained decline in such spending could widen social inequalities.”

Outlook: Gradual Recovery Expected: Despite the current downturn, there are signs that CSR spending could recover in the medium term. Bankers and policymakers believe that ongoing reforms, improved governance, and stricter regulatory oversight will eventually restore profitability and enable banks to resume higher levels of social investment. 

However, much will depend on the pace of recovery in the banking sector, particularly in reducing non-performing loans and strengthening financial discipline. The sharp decline in CSR spending by Bangladesh’s banks—from over Tk 1,100 crore in 2022 to just Tk 345 crore in 2025—reflects the broader challenges facing the financial sector.

While improved transparency and governance reforms may have temporarily reduced profits, they are seen as necessary steps toward long-term stability. As The Daily Industry notes, restoring both profitability and public trust will be key to reviving CSR initiatives, ensuring that banks can once again play a meaningful role in supporting social and economic development across Bangladesh.