ABSTRACT: The research examined the impact of corporate social responsibility on the banking industry particularly in the First Bank, GTB and Diamond Bank respectively. For an organisation to grow, survive and have a favourable image, it must be socially responsible because it is regarded as the overall personality of an organisation while it serves as a soft selling strategy. Stakeholder Theory and Gruning & Hunt Model was used. The survey research method was used while the data collection instrument used was the questionnaire. The study will employ the Non-probability sampling technique to select 150 respondents in First Bank, GTB and Diamond Bank. The data were analysed in frequency and percentage method. It is obvious that many banks in Osogbo particularly GTB and First bank are said to be socially responsible in most of their dealing with customers and the community where they operate. No wonder the image of First Bank and GTB is very bright as more people prefer them, as a result of this one can conclude that “image is the company” and vice versa and no company cannot survival without a good image and effective communication. It is recommended that the public relations unit should ensure that the image of their bank is their priority because the image is the company while a certain amount of money should be earmarked from time to time especially annually while budgeting for social responsibility activities and programmes while the company should not forget to evaluate their result from time to time.


1.0       Introduction

1.1       Background to the Study

It is observed that the aim of any business organisation is to achieve growth, increase in turn over, assets and profit, but all of these are depending on the need to have a built-in, self-regulating mechanism for such business to monitor and ensure its adherence to laws, ethical standards, norms and nuances of its environment. In the interest of its business and its environment, an organisation needs to relate its operations and policies in ways that are mutually beneficial.

The global socio-economic climate has developed an emergent system, which response to corporate and commercial necessities within a defined state or outside of it. The field of international corporate responsibility has assumed an important subfield of business ethics in response to increasing concerns about the ethical conduct of international businesses. It includes business conduct for multinational enterprises, corporate responsibility and environmental issues in developing economies. Apart from profit-making organizations, non-commercial organizations and individual(s) can use corporate social responsibility to build, maintain and sustain their reputation in the public domain and to contribute their own quota to the development of its areas of operation.

Corporate social responsibility is presently defined by the World Business Council of Sustainable Development as a persistent commitment by businesses to behave ethically and contribute to economic development while also increasing the quality of life of employees, their families, and the community.

Corporate social responsibility is a key quality in social-economic development. It is presently defined as a persistent commitment by businesses to behave ethically and contribute to economic development while also increasing the quality of life of employees and their families, as well as the local community and society that they live in (Branco & Rodrigues, 2007; World Business Council for Sustainable Development [WBCSD]. Corporate social responsibility is now broadly understood as including respect for the environment. Although the banking industry was previously considered free of environmental concerns (Carroll, 1979), changes in social values make an examination of the banking industry and environmental protection both important and necessary.

Therefore, Corporate Social Responsibility (CSR) is a form of self-regulation, conscious attempts and self-efforts undertaken by organisations for self-preservation and enhancement of their operations. It is usually integrated into a business model for an organisation to be able to live in harmony with its operating environment. When proactively undertaken, it does promotes the public interest by encouraging community growth and development, and by voluntarily eliminating practices that harm the public sphere, regardless of legality. According to Van Marrewijk cited in Kotler & Lee (2007:6) defines corporate social responsibility is “A commitment to improving community well-being through discretionary business practices and contributions of corporate resources”.

CSR is the deliberate inclusion of public interest into corporate decision-making and the honouring of a triple bottom line known as People, Planet and Profit. The aims of CSR encourage businesses to actively and voluntarily contribute to community development. It implies a kind of social responsibility on the part of an organization making it to deliberate and continuously undertakes a course of action that is in its public best interest.

Corporate social responsibility is applicable to many types of organizations; however, banks are most sensitive to CSR because the banking sector includes a diverse group of individuals (Achua, 2008). Banks are generally opaque, rather than transparent, in comparison to other financial institutions; this opacity can easily disguise problems (Awotundun, Kehinde, & Somoye, 2011). Banks also need positive reputations to have qualified employees, a large customer base, and many solid investors (Achua, 2008). If leaders of Nigerian businesses practice CSR, they can address many of the challenges that face Nigeria. Corporate social responsibility in the Nigerian banking sector needs studying because it has the potential to lead to positive social change by reducing poverty and corruption, increasing ethical and transparent banking practices, and increasing business in Nigeria.

The stability of a banking sector is vital to any society. Other financial institutions, industrial sectors, and service sectors of the economy are of paramount importance for development as well. However, these sectors need the banking sector to thrive, and a responsible banking sector is mandatory for societies to advance economically.

According to Achua (2008), corporate social responsibility and the banking sector have been entangled because CSR is a necessity in the banking sector. Additionally, it is critical to improving sustainable development in societies with high poverty rates such as Nigeria. According to Adegbite and Nakajima (2011), effective CSR is likely to make tremendous strides in the lives of Nigerians and Nigeria as a nation. Leaders in the Nigerian banking sector could practice CSR in an attempt to improve its standing in the community by helping to improve the society in which it operates. If leaders of Nigerian banks practice CSR and take the initiative to assist society, they stand to gain a greater profit because more individuals will have funds to invest in the banking sector.

Banks have developed around 200 years ago. The natures of banks have changed as time has changed. The term ‘bank’ is related to financial transactions, it is a financial establishment that uses money deposited by customers for investment, pays it out when required, makes loans at interest, exchanges currencies and other financial-related things. Going by the view of Achua (2013), a commercial bank is a financial institution that offers banking services to the general public and to companies with the main aim of making a profit. It also provides services such as accepting deposits, making business loans and offering basic investment products and they are always limited liability companies.

However, the Central Bank of Nigeria (CBN) Banking Reforms Act prioritizes corporate social responsibility as one of the businesses undertakings all commercial banks must engage in. Banks do not function in isolation from the society around them. In fact, their ability to compete, perform their tasks effectively and be profitable depends heavily on the circumstances of the location where they operate. Since no business can effectively thrive in an environment of chaos.

It is against this background that this study tries to appraise the Corporate Social Responsibility (CSR) of some selected banks with the view to know the extent to which these banks have complied with the CBN directives and how they have to utilise CSR in achieving their goals.

1.2      Problem Statement 

Corporate Social Responsibility in many banks in Nigeria attracted less attention and budget, unlike advertisement campaigns despite the CBN directives which prioritize banks to engage in CSR to a certain level. Also, facts revealed that Nigerian banks operate within a climate of endemic corruption that has poor corporate governance, with several cases of unethical banking practices (Achua, 2008).

Thus; it is unclear how top managers in the Nigerian banking sector practice and implement CSR. The problem is that the relationship between the Nigerian banking sector and its ethical practices are unclear. It is against this backdrop that the research is geared towards appraising the corporate social responsibilities of the selected banks with a view to examine the need for CSR in the Nigerian banking sector and how best to implement it, in line with global best practices.

1.3       Objectives of the Study

            The objective of this study is primarily to do the following;

  1. To discover the essence of CSR in the harmonious existence of the organisation in a
  2. To ascertain whether First Bank, GTB and Diamond Bank have a good image as a result of their CSR.

1.4       Research Questions

  1. To what extent have First Bank, GTB and Diamond Bank used CSR to contribute to harmonious existence in your area?
  2. How effective are the CSR programmes of First Bank, GTB and Diamond Bank in a bid to improve their current image?

1.5       Scope of Study

The scope of this research has been narrowed to three banks which are; First Bank, GTB and Diamond Bank all along Gbongan road in Osogbo. Also, people residing in Osogbo metropolis will be used as part of the population for this research. The choice of these banks is due to the proximity, inadequate time to study all Banks in Nigeria, and inadequate funds to run around among other logistics.

1.6       Significance of the Study

At the end of this study, the following categories of people will benefit from the research findings. Different organizations will know the benefits of CSR through the result of the findings and how they can use CSR for their gain. 

Moreover, this work will also serve as a working tool for Chief Executives and managers in organizations like (First Bank, GTB and others); this piece of work will actually form a basis for further development and as well contribute to the existing body of knowledge in the area of CSR on corporate image and performance.

Future researchers who will be researching the area related to this topic will find this work relevant as reference material. Mass communication and banking students will as well understand the importance of their course of study to industrial development and success.

1.7       Operational Definition of Terms

Appraisal: Assessing the various activities of the three selected banks, in line with their CSR practice.

Community: This comprises people and the environment of First Bank, GTB and Diamond Bank.

Corporate Social Responsibility: This has to do with the community-oriented services that First Bank, GTB and Diamond Bank embarks on, so as to give back to their environment.    

Banks: These are First Bank, GTB and Diamond Bank.

Image: This has to do with the current status of First Bank, GTB and Diamond Bank. 

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