Regulatory influences on CSR practices within banks in an emerging economy: Do banks merely comply?

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Bangladesh has enjoyed remarkable economic growth for the last two decades primarily driven by an export-led development strategy, foreign remittances and greater empowerment of women. However, parallel to this, the socio-economic conditions (e.g., widespread poverty, poor accountability and inequality), climate change risks and environmental pollution result in the nation's vulnerability. Over more than two decades, the practice of voluntary corporate social responsibility (CSR) and its reporting by firms in Bangladesh has developed and increased, but the need for regulatory guidelines for CSR practices continues. We investigate whether banks in Bangladesh embrace CSR practices to follow the regulatory guidelines issued by the central bank or if they develop CSR practices opportunistically and politically. We provide evidence from 21 semi-structured interviews with managers of banks in Bangladesh and from published sources. The findings indicate that CSR activities are prompted by: CSR regulations by the central bank (Bangladesh Bank); congruency between banks’ goals and the regulator; support offered by the central bank; and the quest to maintain effective relationships with other stakeholders, such as the government and political leaders. The findings also show that CSR practices become decoupled from regulatory expectations and that managers ‘dress up’ reported information by bypassing regulatory guidelines when responding to demands from powerful stakeholders, such as board members and political elites. Banks do not respond aggressively to CSR regulation, for example, with challenges and attack-type responses, as these responses are culturally unacceptable. The findings imply that decoupling occurs, and that it is unlikely that regulation will minimize this behaviour because there is a lack of political will, an absence of accountability and there appears to be a lack of substantive commitment ethical conduct amongst powerful board members. Despite regulatory efforts, we find that exploitative practices continue in line with cultural norms in the banking environment in Bangladesh.

Original languageEnglish
Article number102096
Pages (from-to)1-20
Number of pages20
JournalCritical Perspectives on Accounting
Publication statusPublished - Sept 2020


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