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Saudi banks urged to be active on CSR projects

Saudi banks are being examined concerning their participation in supporting corporate social responsibility (CSR) programs.

Published: Updated:

Saudi banks come under scrutiny with regard to their degree of contribution to charity and their adoption of corporate social responsibility (CSR) programs.

Okaz/Saudi Gazette approached those who are responsible for CSR programs in some local banks, only to be given cold shoulder by those concerned when asked about the issue.

The only way out to break this silence was to interview experts, specialists and economists.

Dr. Mohammad Zuwayyid al-Otaibi, member of the teaching staff at the Institute of Public Administration, said “many people ask about the meager role of our local banks in the field of corporate social responsibility despite making very high profits and getting big privileges with which it is required of them to carry out their absent role. We have not heard of a bank constructing a hospital or a schools complex. Also, we cannot believe that one of these financial institutions has carried out this deed without announcing it.”

Al-Otaibi further said that corporate social responsibility for the private sector in the big nations has exceeded giving haphazardly in a disorganized manner. It has become difficult for international banks to ignore their social role and discern their social responsibility towards the individual and society.

He said that the World Bank defines social responsibility as a commitment by owners of commercial activities to contribute to sustainable development through their employees, their families, the local society and the society as a whole so as to improve the standard of living of people in a way serving trade and development simultaneously.

Meanwhile, Dr. Abdullah al-Ghamdi, a specialist in human resources development, said an annual amount should be imposed on Saudi banks so as to increase their concern for CSR programs. He further said the banks’ concern for CSR is meager compared to the profits banks make from the society.

The experts, who spoke to Okaz/Saudi Gazette, criticized local banks for their weak role in supporting CSR programs and restricting their work to loans and bank credits. Their role is absent in conducting feasibility studies for small and medium projects and promoting them, following them up and solving their problems.

Informed sources in several local banks said their banks have supported wide social programs whether in education or projects, aside from achieving Saudization exceeding the percentage in many other sectors.

The sources expect the volume of current accounts in local banks this year to exceed SR900 billion and their interests will exceed SR35 billion. Not only this, but the profits of some banks double on the capital of every three years, as they benefit from the interests on current accounts and the absence of operation costs.

The bank sources stressed that there are other sectors that obtain free or semi-free privileges like natural resources or plots of land similar to private sector companies. The sources said the banks develop the purposes for which they were established, like developing the shareholders’ rights similar to other joint stock companies.

A study conducted by one of the financial companies specializing in the Saudi market disclosed that the volume of deposits at request (free deposits) in Saudi banks have increased to the highest level in the first half of 2013 to reach SR881 billion. Deposits at request formed 64 percent of the total deposits in Saudi banks. This was the highest level registered in over 25 years.