CSR PRACTICES OF FIRST SECURITY ISLAMI BANK LIMITED (FSIBL)

CSR PRACTICES OF
FIRST SECURITY
ISLAMI BANK
LIMITED (FSIBL)
ABSTRACT
FSIBL is an Islamic financial
institutions in Bangladesh that contributes
towards the development of the society
through CSR activities. In this report,
Carroll’s four parts model, ICSR model and
other relevant models are used in
analyzing and discussing the CSR practices
of FSIBL.
B – 511: Business Ethics & Corporate
Social Responsibility

CSR PRACTICES OF FSIBL i
CSR PRACTICES OF FIRST SECURITY ISLAMI
BANK LIMITED (FSIBL)
Prepared For:
Tasneema Khan
Assistant Professor
Department of Banking and Insurance
University of Dhaka
Prepared By:
Md. Abdul Jalil
Class ID: 19-034
Major: Banking, MBA Program
University of Dhaka
21st November, 2017
University of Dhaka

LETTER OF TRANSMITTAL
Date: 21-11-17
To
Tasneema Khan
Assistant Professor
University of Dhaka
Subject: Submission of report on ‘CSR Practices of First Security Islami Bank
Limited (FSIBL)’
Madam,
It gives me immense pleasure to submit the report on the ‘CSR Practices of First
Security Islami Bank Limited (FSIBL)’ as part of the course study.
The report is prepared based on published reports, websites and other related
documents and the documents collected from library. Through my best sincerity I have
tried to present all the related issues in the report within several limitations. I sincerely
hope and believe that the findings will be able to meet the requirements of the course.
Once again, thank you for making our (B-511) Business Ethics and Corporate Social
Responsibility class an enlightening and enjoyable experience.
Therefore I would like to place this report for your kind judgment and valuable
suggestions.
Thanking you.
Sincerely yours
Md. Abdul Jalil
Class ID: 19-034

CSR PRACTICES OF FSIBL iii
ACKNOWLEDGEMENT
At first I am very grateful and thankful to the Almighty ALLAH (SWT).
For the completion of this report, searching for websites, articles and related documents
were required. However, it was our instructor, Tasneema Khan who played the
important role by giving us an insight about the report. I express my profound
indebtedness and gratitude to her, for her valuable advice that helped immensely in
preparing this report.
I would also like to thank all of my friends and classmates who helped me to complete the
report. However, this report was not come into reality without the helping hands.
Therefore, all the credit of my accomplishment spreads to all the helping hands.

EXECUTIVE SUMMARY
First Security Islamic Bank Limited (FSIBL) is an Islamic private commercial banks in
Bangladesh which uses traditional approach for reporting CSR activities and practices in
their annual report. This report however, uses Carroll’s four parts model, ICSR model, and
Maqasid al-Shari’ah approach to analyze, discuss and evaluate the CSR practices of FSIBL.
The economic responsibility, legal responsibility, ethical responsibility and philanthropic
responsibility are analyzed and discussed by using different quantitative and qualitative
approach. ROA, Operating income, employee numbers, costs of funds, philanthropic
expenditures are taken into account for the discussion.
ROA remains below the industry average though operating income and net profit are
in increasing trend showing FSIBL is performing well as an economic unit. The employee
numbers are also increasing year by year. The cost of funds used as a proxy for product
quality shows a stable trend throughout the year. FSIBL is consistently spending 5% of
its operational profit in CSR activities. The mains areas of philanthropic CSR activities are
in disaster management, education and culture. The most of the philanthropic CSR
expenditure are directed towards the category of necessities indicated by the objectives
of the Shari’ah.

CSR PRACTICES OF FSIBL v
BRIEF CONTENTS
No. Content Names Page No.
01 Letter of Transmittal II
02 Acknowledgement III
03 Executive Summary IV
04 Brief Contents V
05 List of Figures and Tables VI
06 Chapter 1: Introduction 1-4
07 Chapter 2: Theoretical Discussion 5-12
08 Chapter 3: Organizational Profile 13-16
09 Chapter 4: Analysis & Discussion 27-23
10 Chapter 5: Conclusion 24-26
11 Bibliography 27

LIST OF FIGURES
Figure No. Figure Name Page No.
2.1 Carroll’s Four Parts Model of CSR 7
2.2 Islamic Corporate Social Responsibility Model 9
3.1 5-Years Financial Positions of FSIBL 16
3.2 5-Years Profitability of FSIBL 16
4.1 Return on Assets (ROA) 2008-2016 18
4.2 Net Profit & Operating Income 2008-2016 19
4.3 Number of Employees 19
4.4 Cost of Funds 2008-2016 20
4.5 Philanthropic Expenditure 2012-2016 21
4.6 Philanthropic Expenditure by Sector 2016 22
4.7 Philanthropic Expenditure by Sector 2015 22
4.8 Philanthropic Expenditure by Maqasid 2016 23
4.9 Philanthropic Expenditure by Maqasid 2015 23
LIST OF TABLES
2.1 Levels of Maqasid & Expenditure 12

1.1 Research Background
First Security Islami Bank Limited (FSIBL) is one of the Islamic Banks in Bangladesh.
Like other banks and as Islamic financial institutions FSIBL contributes in the social
development of the country through CSR activities. As a prevailing practices in this
region, most of the banks deem only philanthropic activities as CSR activities. There are
many theories available like Carroll’s model, ICSR model for Islamic financial institutions,
Triple Bottom Line (TBM) model, Stakeholder model etc. Given this background, the
present paper sets the following objectives discussed below and analyzed the data for
searching the answers.
1.2 Objectives
The objective of this paper is to describe and evaluate the prevailing practices of
corporate social responsibility of First Security Islami Bank Limited (FSIBL). To achieve
this broad objective, few specific research questions are formulated.
 Which approach does FSIBL follow in case of corporate social responsibility?
 What is about the performance of FSIBL according to Carroll’s model?
 What is about the performance of FSIBL according to ICSR model?
 What is about the performance of FSIBL in terms of economic responsibility?
 What is about the performance of FSIBL in terms of legal responsibility?
 What is about the performance of FSIBL in terms of ethical responsibility?
 What is about the performance of FSIBL in terms of philanthropic
responsibility?
 Which sectors or areas does FSIBL contribute more as CSR?
 Which sectors of areas does FSIBL contribute more in terms of Maqasid al-
Shari’ah (objectives of the Shari’ah)?
1.3 Significance of the Study
There are a lots of gap about discussion and analyzing the CSR activities of the banks
of Bangladesh in the lights of any specific models like Carroll’s model, ICSR model etc.
Very few works have been done on Islamic financial institutions’ performance on CSR in

CSR PRACTICES OF FSIBL 3
terms of using a specific model. This research aims to fulfill this gap by taking First
Security Islami Bank Limited (FSIBL) as an Islamic financial institutions in the context of
Bangladesh and using Carroll’s model, ICSR model and utilizing Maqasid al-Shari’ah
approach for analyzing CSR practices of FSIBL.
1.4 Research Methodology
The present study follows pragmatic approach means utilizing both quantitative and
qualitative methods. The information about the CSR performance and activities are taken
from FSIBL annual reports published by the banks. Three models have been utilized for
analyzing and evaluating the data.
Carroll’s (1991) include economic,
legal, ethical and philanthropic
responsibilities as corporate social
responsibility. Khurshid at el., (2014)
developed Islamic corporate social
responsibilities (ICSR) model which is
the extension of Carroll’s four parts
model. As, FSIBL is an Islamic
financial institutions, ICSR model is
also used in addition to Carroll’s model. As an Islamic bank, FSIBL is expected to maintain
and contribute towards achieving the Maqasid al-Shari’ah (objectives of Shari’ah). The
contributions of FSIBL as CSR activities are discussed from the point of view of these
objectives1.
Return on Assets (ROA), Net profit, and operating income are used as indicators of the
performance of economic responsibility. The number of employees are used also as this
indicates how the firm is performing in creating employment opportunities which is
under the purview of economic responsibility according to Carroll’s model (1991). Cost
1 There are five broad objectives under the heading of necessitates: preservation and protection of
religion, life, progeny, intellect, and wealth.
ICSR
Model
Maqasid al-
Shari'ah
Approach
Carroll's
Four Part
Model

of funds are used as a proxy for measuring products quality which is the firm legally
binding according to Khurshid et al., ICSR model (2014) as an Islamic banks can’t provide
defective products. So the firm is legally binding to provide quality provides to the
customers. Under the purview of ethical responsibility which is expected by society,
different initiatives taken by banks are discussed philanthropic contributions are
discussed under philanthropic responsibilities. The details of these approaches are
conceptually discussed in the theoretical discussion chapter of this paper.
1.5 Structure of the Report
The report is divided into five chapters. Following the introduction of the report that
discusses research objectives, methodology etc., chapter two discusses the theoretical
concept used in this paper. Chapter two starts with reviewing the available literature on
corporate social responsibility, then discusses the Carroll’s model, ICSR model and
Maqasid al-Shari’ah approach to CSR.
Chapter three gives an overview of First Security Islami Bank Limited (FSIBL)
portraying its mission, vision and last few years performance. Chapter four discusses and
analyzes the CSR practices and activities of FSIBL by using Carroll’s model, ICSR model
and Maqasid al-Shari’ah approach. The last chapter of the report conclude the paper by
portraying the findings and recommending some suggestions.

Chapter
Two
Theoretical Discussion

2.1 Literature Review
The concept of CSR has a long history in the social sciences (Garriga and Mele, 2004).
Friedman (1970) stated that corporations have only one responsibility, which is
obtaining profits in a legal manner, and that managers have only responsibility, which is
to increase shareholder wealth. Friedman believed that managers and even executives
are the employees of stockholders; thus, their only responsibility is “to conduct the
business in accordance with their [the owners’] desires to make as much money as
possible conforming to the basic rule of society” (Friedman, 1970).
In contrast, Freeman (1994) argued that managers have a responsibility not only to
shareholders but to all stakeholders. He believed that an organization’s success depends
on its ability to manage its relationships with its stakeholders – not only financers and
shareholders but also customers, employees and even communities and societies as a
whole. The concept of CSR has received considerable attention in recent decades. In the
1980s and 1990s, the CSR literature focused on corporate engagement in social
responsibilities from a business perspective (Margolis and Walsh, 2001). Since the late
1990s, particularly in the past decade, research has focused on important stakeholder
perspectives and the drivers of CSR (Brown and Dacin, 1997; Sen and Bhattacharya,
2001).
There is no consensus on what should be included in the social responsibility of
organizations (Griffin, 2000). CSR has been viewed as the responsibility of organizations
With respect to their environment and their stakeholders (Gossling and Vocht, 2007).
Alternately, Carroll (1979) defined CSR based on an organization’s operations that are
conducted for the benefit of society, as “the social responsibility of business includes the
economic, legal, ethical, and discretionary expectations that society has of organizations
at a given point in time”.
However, CSR definitions are vague; they may be overly general, overlapping with other
concepts, or they may have a particular subtext, depending on the geographical area or
the environment in which they are used (Gherhes¸ et al., 2010). The meaning of CSR

differs across nations and assessments of firm activities with regard to social issues are
affected by religious and cultural norms and expectations.
2.2 Conceptual Framework
2.2.1 Carroll’s Four Part Model of CSR
The concept of CSR expounded by Carroll (1979; 1991 and 1994) introduced four
layers of CSR or four kinds of social responsibility: economic, legal, ethical and
philanthropic. The typology of CSR proposed by Carroll (1979) are illustrated below.
Figure 2.1: Carroll’s Four Part Model of CSR
• Economic (fulfilling consumer needs, providing jobs and respectable wages and
raising capital for investments);
• Legal (complying with laws and regulations)
• Ethical (undertaking morally justifiable codes and conduct, discriminating
between right/wrong and honest/dishonest and not harming others)
• Philanthropic (keenly contributing to community welfare by investing in
education and charity or by helping society’s most helpless members)
Philantropic Responsibility
(Desired by Society)
Ethical Responsibility
(Expected by Society)
Legal Responsibility
(Required by Society)
Economic Responsibility
(Required by Society)

2.2.2 Islamic Corporate Social Responsibility (ICSR) Model
Khurshid at el., (2014) developed a CSR model in the view of Islamic worldview which
was an extension of the Carroll’s model.
2.2.2.1 Islamic economic responsibility
In Islam, business activities are not assumed to satisfy only material needs and
desires; rather, these activities should be undertaken to fulfill religious responsibilities
as well (Chapra, 1992). Therefore, the purpose of the Islamic system of business is not
primarily materialistic but is based on the concepts of human well-being and the overall
achievement of a good life. God has permitted trade (i.e. buying and selling) but has
forbidden riba, or interest, in business transactions (Qur’an, 2:275). He has encouraged
mankind to exercise mutual cooperation in good deeds, but has forbidden people from
helping one another to further evil acts and enmity (Qur’an, 5:2). Trade practices also
draw heavily on the life of the Prophet Mohammad (PBUH) and on the lives of many of
his companions and their followers, who were actively engaged in trade and who
established the ethical foundations of Islamic business practices at the inception of the
religion (Bhatia, 2004).
Ali et al. (2012a, 2013) echoed this conclusion by stating that profit considerations
are not independent of an ethical system, but are part of prevailing norms that govern
conduct and business exchange functions. These authors stated that “profit assumes a
central place in Islamic ethics and, therefore, Islamic prescriptions do not condone profit
that leads to exploitation and mischief in the marketplace”. In this regard, these authors
agree with Freeman et al. (2004, p. 364) that the Islamic view is similar but broader than
stakeholder theory in advocating that value creation results in profits rather than the
reverse. Islam introduced the concept of halal (lawful) and haram (unlawful) in its
comprehensive system of life. These concepts reign supreme in the areas of production
and consumption.
2.2.2.2 Islamic legal responsibility
An Islamic market is categorized by certain norms that ensure the safety of both
buyers and sellers. There are certain ethical regulations in Islamic commercial
transactions even in the absence of written contracts. These rules manifest a code of good

manners, decency and ethical excellence. All of these rules are pursuant to the concept of
lawful and unlawful practices in Islam and reflect features of social responsibility in every
aspect of transactions.
Islam asserts that human beings are equal and that human interactions should be
based on trust, equity and justice (Parvez, 2000). Justice includes the fulfillment of
promises, pacts and contracts. Muslims should be honest, sincere and truthful in their
business dealings and should ensure accuracy in terms of promised product
specifications, such as weights, measures and other attributes. One example is evidenced
in the Qur’an: “Give full measure when you measure, and weigh with a balance that is true:
that is the most fitting and the most advantageous in the final determination …” (Qur’an,
17: 35). In addition, Islam condemns cheating, lying and hoarding products to create
shortages in the market in an attempt to increase prices. Islam requires businesspersons
to be straightforward in all of their dealings and transactions.
ICSR Model
Economic
Responsibility
Maximizing Profits
Halal Investments
Halal Products &
Services
Legitimate
Earnings
Islamic Legal
Responsibility
Avoid Hoarding
Fair Trading
Preserve Product
Quality
Correct Weight &
Measure
Islamic Ethical
Responsibility
Avoid Cheating &
Fraud
Preclude Sexual
Imagery
Prevent
Exploitation of
Women
Prayer Facility in
Working Hours
Islamic
Philantropic
Responsibility
Payment of Zakah
Charity &
Donation
Cultural &
Religious
Activities
Sponsor Pilgrimige
Figure 2.2: Islamic Corporate Responsibility (ICSR) Model developed by Khurshid
at el., (2014)

2.2.2.3 Islamic Ethical Responsibility
Compliance with ethical behavior is part of faith as such, social responsibility and
justice are considered subsidiaries of the Muslim belief system (Mohammed, 2007). Islam
emphasizes community values, socioeconomic justice and a balance between the material
and spiritual needs of its followers (Ahmad, 1971; Chapra, 1992). Islam restricts a
number of business transactions (e.g. by charging interest), pornography, prostitution,
gambling and speculation (Usmani, 2002). Mohammed (2007) noted that Islam requires
its followers to adhere to the same cohesive code of behavior and that every human action
is undertaken for God. Only God is to be feared; therefore, morality follows automatically.
As the Qur’an states (6:162), “Say: Lo! My worship and my sacrifice and my living and my
dying are all for God, Lord of the Worlds”. This philosophy encourages a focus on altruism
and awareness of social responsibility and justice. The Qur’an and Hadith of the Holy
Prophet (PBUH) revealed the implications of the concept of social responsibility and
justice, which are linked to righteousness in Islam. Morality is intended to facilitate social
responsibility and justice as the foundation of an Islamic society (Mohammed, 2007).
2.2.2.4 Islamic philanthropic responsibility
Islam allows its followers to conduct business for profit without harming others or
the environment. People are expected to ensure justice to stakeholders and welfare to
mankind (Qur’an, 16: 90). Islam also encourages people to take appropriate measures to
check the concentration of wealth into a few hands, to redistribute resources, to minimize
social gaps and to share the fortunes of the wealthy with unfortunate people in society by
paying Zakat2 and Sadaqah3.
The payment of Zakat can help balance the economy of a country by helping the poor
and needy to pursue a better life (Dusuki, 2008). Therefore, the payment of Zakat may
help companies fulfill their responsibilities both to God and to society. In Islam, Sadaqa
are another social dimension to which companies can contribute through donations.
These donations can be given in the form of money to help the poor, needy persons or
orphans or to build public facilities, such as mosques, public halls and recreational parks.
These donations can benefit society as a whole. In summary, socially responsible
2 Compulsory alms giving yearly at a rate of 2.5% on the wealth
3 Sadaqah is non-compulsory charitable donations

activities, Zakat, and Sadaqah can help people obtain Barakah4 from God. At the same
time, good deeds is the key to the achievement of Falah5 (Beekun and Badawi, 2005).
From an Islamic perspective, all possessions, wealth, expertise, abilities, positions and
power belong to God. Humans are only trustees. As trustees, human beings must manage
these possessions to the best of their abilities to create maximum value in social
responsibility with the intention of benefiting the community as a whole (Bardai, 2002).
2.2.3 Maqasid al-Shari’ah & CSR
The functional basis of understanding CSR in should be viewed in light of the Maqasid al-
Shari’ah6. Muslim scholars such as al-Ghazali, al-Juwayni, al-Shatibi and Ibn Ashur are
unanimous that the broad objectives of Shari’ah are to achieve benefits for mankind
(maslaha) and to ward off all forms of harm (mafsadah).
The scholars categorized the maqasid into a threefold hierarchy: necessities (daruriyyat),
complements (hajiyyat) and embellishments (tahsiniyyat). Necessities should be given
priority over complements, and complements should be given priority over
embellishments. The domain of this hierarchy comprises five essential elements: religion,
life, intellect, progeny and wealth. The framework of al-Ghazali’s theory is presented in
figure 2.3.
4 Blessings from Allah
5 Success in this world and in the hereafter
6 Objectives of the shari’ah

Figure 2.3: Levels of Maqasid al-Shari’ah
In Islam, the overall intent of public expenditure is to fulfil public or social needs (Attia,
2007).The purpose of the CSR expenditure of the banks should also be in line with that
intent. Those social needs can be classified among the essentials, compliments or the
embellishments in accordance with the requirements set by the Islamic law. Attia (2007)
classified expenditures in accordance with Table 2.1.
Hierarchy of Maqasid Examples of expenditures
Necessities  Education
 Health care
 Expenditure on security & justice
Complements  Activities related to individual and social
economic development
Embellishments  Building sports clubs, parks and recreation areas
 Holding competitions
 Providing amusement facilities for employees
 Anything that improves the quality of life
Table 2.1: Levels of Maqasid & Expenditure according to Attia (2007)
Levels of Maqasid
Necessitites
Protection &
preservation of
religion
Protection &
preservation of life
Protection &
preservation of
intellect
Protection &
preservation of
progeny
Protection &
preservation of
wealth
Complement
Embellisment

ORGANIZATIONAL
PROFILE
Chapter
Three

3.1 Introduction
This chapter aims to illustrate the mission, vision and last five years financial
performance of FSIBL. The performance are illustrated as Total Assets, Total Deposits,
Total Investments, Net Profit and Operating Income.
3.2 Mission & Vision
The vision of the bank is to be the premier financial institution in the country by
providing high quality products and services backed by latest technology and a team of
highly motivated personnel to deliver excellence in Banking. The missions of the bank are
listed below.
 To contribute to the socio-economic development of the country.
 To attain the highest level of satisfaction through the extension of services by
dedicated and motivated professionals.
 To maintain continuous growth of market share by ensuring quality.
 To ensure ethics and transparency in all levels.
 To ensure sustainable growth and establish full value of the honorable
shareholders and above all, to contribute effectively to the national economy.
3.3 Corporate Strategy
To achieve the mission and vision, FSIBL formulated following strategies.
 To achieve our customer’s best satisfaction & win their confidence.
 To manage & operate the bank in the most effective manner.
 To identify customer’s need & monitor their perception towards meeting those
requirements.
 To review & update policies, procedures & practices to enhance the ability to
extend better customer services.
 To train & develop all employees & provide them adequate resources so that
customer’s need can reasonably addressed.

 To promote organizational efficiency by disclosing company plans, policies &
procedures openly to the employees in a timely fashion.
 To ensure a congenial working environment.
 To diversify portfolio in both retail & wholesale market.
3.4 Corporate Information
Name of the Company First Security Islami Bank Ltd.
Chairman Mr. Mohammad Saiful Alam
Vice Chairman Mr. Alhaj Mohammad Abdul Maleque
Managing Director Mr. Syed Waseque Md. Ali
Company Secretary Mr. Oli Kamal
Legal Status Public Limited Company
Date of Incorporation August 29, 1999
Commencement of Business August 29, 1999
Date of Opening of First Branch October 25, 1999
Line of Business Banking
Authorized Capital Tk.10,000 Million
Paid up Capital Tk.6,788.74 Million
Date of consent for IPO 04 June 2008
Fax 880-02-9891915
E-mail bcs@fsiblbd.com , info@fsiblbd.com
SWIFT Code FSEBBDDH

3.5 Financial Highlights
3.6 Conclusion
FSIBL is performing well for the last 5 years and developing day by day after its
inception. The banks set the strategies to be the premier financial institutions of the
country.
129937.81
162033.22
204876.416
256604.94
301669.25
109905.57
139503.93
182503.18
231259.39
274224.78
96304.23
114328.75
152370.714
187239.08
225889.89
2012 2013 2014 2015 2 0 1 6
FIGURE 3.1: 5-YEARS FINANCIAL POSITIONS(IN
MILLION)
Total Assets Total Deposits Total Investments
762.71
776.48
694.28
853.54
1410.33
3783.84
4477.95
5262.6
6402.67
8137.94
2012 2013 2014 2015 2 0 1 6
FIGURE 3.2: 5-YEARS PROFITABILITY (IN MILLION)
Net Profit Operating Income

Chapter
Four
Analysis & Discussion

4.1 Introduction
This chapter aims to analyze and discuss the CSR practices of First Security Islami
Bank Limited (FSIBL) in the light of Carroll’s Model7 , ICSR Model8 and Maqasid al-
Shari’ah9.
4.2 Economic Responsibility
As discussed by Carroll (1991), Companies have shareholders who demand a
reasonable return on their investments, customers demand good products and
employees want safe and fairly paid jobs. So the first responsibility of the business is to
be a properly functioning economic unit and to stay in business.
Figure 4.1 shows that the return on assets for the last decade remained below the
averages of Private commercial banks (PCB) and Industry average for the most of the
times. The ROA is also in decreasing trend. This shows relatively poor performance of
FSIBL to be a properly functioning economic unit and to stay in business.
7 Four part CSR model developed by Carroll (1979, 1991,1994)
8 Islamic Corporate Social Responsibility (ICSR) Model developed by Khurshid at el., (2014)
9 Gazzali Outlined the 3 broad categories of the objectives of the Shari’ah
0
0.5
1
1.5
2
2.5
2008 2009 2010 2011 2012 2013 2014 2015 2016
Figure 4.1: Return on Assets (ROA) 2008-2016
Industry Average PCBs FSIBL Linear (FSIBL)

Figure 4.2 shows that net profit and operating income is in increasing trend for the
last decades. This indicates however different story than the previous. Though the ROA
remains lower than the industry average for FSIBL, net profit and operating income
shows increasing trend indicating better performance.
Figure 4.3 shows that FSIBL is creating more employment day by day which is one of
the economic responsibility expected by the employee. The upward trend also indicates
job security in FSIBL.
4.3 Legal Responsibility
According to ICSR model, an Islamic financial institutions must abide by the Islamic
commercial law in its activities. A Shari’ah council consists of 5 members oversee the
104.28
326.83
548.6
579.93
762.71
776.48
694.28
853.54
1410.33
572.78
1327.63
2085.2
2738.25
3783.84
4477.95
5265.6
6402.67
8137.94
2008 2009 2010 2011 2012 2013 2014 2015 2016
FIGURE 4.2: NET PROFIT & OPERATING INOME 2008 -
2016 (IN MILLION)
Net Profit Operating Income Linear (Net Profit)
485
775
929
1342
2090
2367
2673
2820
3224
2008 2009 2010 2011 2012 2013 2014 2015 2016
FIGURE 4.3: NUMBER OF EMPLOYEE
Employee Number

activities of FSIBL and ensure whether it violates any rulings and laws prescribed by
Islamic Law. ICSR also suggest that the quality of the products should be ensured and any
hoarding that increase price is disallowed. The cost of fund can be used as a proxy for
quality of deposit products. The assumption is that the highest the deposit rate, the better
the banks is serving the depositors.
Figure 4.4 shows that cost of funds remains stable for the most of the period which is
in between 8% to 12%. This shows the products of FSIBL maintain its quality.
4.4 Ethical Responsibility
These responsibilities though not required by society but expected by them to oblige
corporations to do what is right, just, and fair (Crane & Matten, 2010). Green banking is
one of the recent phenomenon that saves society and environment by reducing the
amount of paper they uses and by other ways. FSIBL introduced green banking concept
in their banking operations that is expected by the society from an Islamic financial
institutions. The initiatives are listed below.
 Mobile Banking namely ‘SureCash’
 Agent Banking
 E-Statement
 Internet Banking
11.37%
9.28%
8.90%
10.01%
11.00%
11.64%
11.76%
10.81%
9.21%
2008 2009 2010 2011 2012 2013 2014 2015 2016
FIGURE 4.4: COST OF FUNDS 2008-2016
Cost of Funds

4.5 Philanthropic Responsibility
Philanthropy literally means ‘the love of fellow human’. Carroll (1991) suggests that
the activities which are within the corporation’s discretion to improve the quality of life
of employees, local communities, and ultimately society in general. FSIBL makes
donations in the sector like education, health, disaster management, environment and
culture. FSIBL donates in these and other sectors as a philanthropic activities about 5%
of its operational profit consistently from 2012.
Figure 4.5 shows that the philanthropic expenditure on various projects by FSIBL is
in increasing trend and increasing year by year. As we have seen earlier in figure 4.2 that
operating income is increasing also. So, it can be said that the higher the operating income
for FSIBL, the higher it donates into the philanthropic activities.
4.6 CSR Activities by Sector
Here CSR activities mean philanthropic activities. The philanthropic donations made
by FSIBL in 2016 and in 2015 are illustrated in Figure 4.6 and 4.7.
0 20 40 60 80 100 120 140 160
2016
2015
2014
2013
2012
2016 2015 2014 2013 2012
Philantropic Expenditure 151.75425 141.847272 119.588114 122.853246 110.39807
FIGURE 4.5: PHILANTROPIC EXPENDITURE 2012-2016 (IN
MILLION)

The philanthropic expenditure in last two years shows that FSIBL contributed most
of their contributions in disaster management which is 76% in 2016 and 57% in 2015
from their total philanthropic expenditure of these years. The second sector in which
FSIBL contributed most is education (22%) in 2016 and culture (27%) in 2015.
4.7 CSR Activities by Maqasid10
FSIBL categorizes the philanthropic expenditure into sector wise like education,
health, disaster management, environment and culture. As mentioned earlier, there are
three categories of Maqasid namely necessities, complements and embellishments.
Education, health, and disaster management can be categorized as necessities in the
perspectives of Bangladesh, Cultural activities can be categorized as embellishments, and
environment along with others unspecified sectors can be classified as complements.
10 Objectives of the Shari’ah
Education
22%
Health
0%
Disaster
Management
76%
Environemnt
1%
Culture
1%
Figure 4.6: Philantropic
Expenditure by Sector 2016
Education Health
Disaster Management Environemnt
Culture
Education
11%
Health
3%
Disaster
Manage
ment
57%
Environment
2%
Culture
27%
Expenditure by Sector 2015
Education Health
Disaster Management Environment
Culture

4.8 Conclusion
FSIBL mainly follow the traditional approaches of CSR where only philanthropic
activities are deemed as CSR activities. They mainly contribute in sectors like education,
health, disaster management, environment and culture.
Necessities
94%
Complements
4%
Embelishments
2%
Expenditure by Maqasid 2016
Necessities Complements Embelishments
Necessities
71%
Complements
2%
Embelishments
27%
Expenditure by Maqasid 2015
Necessities Complements Embelishments

5.1 Introduction
This chapter aims to highlight the major findings in this research and
recommendations that can be taken into account to improve the CSR activities and
practices of FSIBL.
5.2 Findings
 ROA of FSIBL remains below the industry average for the most of the time of
last decades. However, net profit and operating income is increasing that
indicates FSIBL is performing well as an economic unit which is the required
by society according to Carroll’s four part CSR model.
 The employee number is also increasing day by day indicates FSIBL is creating
more employment and provides safety and security to the employees in the
jobs.
 A Shari’ah council oversee the activities of FSIBL to prevent maintain the
second pillar of ICSR model which is Islamic legal responsibility.
 The cost of sources of fund remains stable indicates FSIBL is providing good
quality products to the depositors.
 To meet the ethical responsibility which is expected by society, FSIBL provides
green banking services through introducing e-banking, mobile banking,
internet banking e-financial statements etc.
 FSIBL mainly focuses on Philanthropic activities which is desired by societies.
FSIBL mainly reports philanthropic activities in annual report as CSR activities.
 FSIBL maintains a traditional approach to CSR which mainly focuses on
philanthropic activities and practices as corporate social responsibility.
 The main three sectors FSIBL contributes are disaster management, education
and culture.
 FSIBL mainly contributes in the necessities of life among the three categories
of Maqasid al-Shari’ah.

5.3 Recommendations
 FSIBL should utilizes its assets more efficiently to increase the ROA so that it
can perform efficiently as an economic entity.
 The recent trend of employment generation should be maintained.
 FSIBL may report the progress of green banking activities in the qualitative
and quantitative manner.
 FSIBL should deem CSR according to Carroll’s model rather than philanthropic
activities.
 FSIBL should report the four pillars of CSR activities in the annual report under
a dedicated chapter.
 FSIBL may form a CSR committee like risk management committee or others
who will oversee the four pillars of CSR activities for maintenance and
improvement.
 FSIBL should focus on Maqasid al-Shari’ah in the analysis of CSR activities.

Bibliography
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