BANK NEWS
RBI asked SBI to rein in CSR spending Arundhati Bhattacharya
MUMBAI. The Reserve Bank of India (RBI) has advised State Bank of India (SBI), the country’s largest lender, to not spend 2% of its profit on CSR till the stress in the financial sector eases, according to the bank’s chief executive.
“We are a statutory corporation and as a result we have to take RBI’s consent to be able to meet 2%. RBI felt that we should do it a little later due to the stress in the banking system. That’s the reason we continued with the 1%,” said Arundhati Bhattacharya, SBI’s chairperson in an telephonic interview.
The 2% comes from a provision in the Companies Act, 2013 and is mandatory. However, banks such as SBI that were set up under a different statute (and not the Companies Act) do not need to adhere to it.
Still, RBI has not issued any directions or instructions to banks on CSR spending, a spokesperson for the central bank said. She added that all scheduled commercial banks can, however, voluntarily contribute up to 1% of their previous years’ profit as donation. SBI spent Rs.143.9 crore or 1% of its net profit on CSR in fiscal 2016. MINT
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