Modi Asks PSU Banks To Work On A Single CSR Project

Prime Minister Narendra Modi has asked to the chiefs of state-run banks to carry out a single project under the corporate social responsibility (CSR) scheme. At present, every bank supports different CSR projects. Modi said this while speaking to the bankers at Gyan Sangam – a two-day workshop held in Pune recently.

As per the revised Companies Act, corporate houses have to spend at least 2% of their net profit for social welfare schemes under CSR. Banks, which come under the Banking Regulations Act, are exempted from the Companies Act. However, as per a directive by the Reserve Bank of India (RBI), “they can spend up to 1% of their previous year's net profit to support social causes.”

"During the gathering, the PM pointed out that pooling of resources of all PSU banks for a single project would result in a more meaningful deployment of funds as it would result in economies of scale. He suggested that each year, banks can take up different projects," The Economic Times quoted a banker, who was present during the meeting.

State Bank of India (SBI) had already written to RBI, asking for its approval to establish SBI Foundation – a non-profit making company, which will look after the CSR resources of all its associate banks and subsidiaries.