WHAT PROMPTS THE BANKING SECTOR TO IMPLEMENT CSR? A QUALITATIVE INSIGHT WITH REFERENCE TO PAKISTAN

Abstract

The importance of Corporate Social Responsibility (CSR) to financial institutions has deepened, especially within developing regions, for (strategizing) regulating the environment and the public domains. Very few empirical studies have considered the case of the banking industry in Pakistan, especially the challenges related to the integration of CSR in banking. This research seeks to fill this gap by qualitatively analyzing the main challenges to CSR integration in the Pakistan banking industry and the challenges to integration. Using maximum variation purposive sampling, a public and a private sector bank were selected to carry out semi-structured interviews with 11 bank CSR Managers. Braun and Clarke’s framework resulted in four major themes and associated interrelationships: (1) loose and weak national regulatory frameworks, (2) infrastructure resources and civil society stakeholder frameworks, (3) employee competency frameworks, (4) alienation of finance (public banking) and (5) ignorance or apathy of civil society stakeholders. This mainly addresses the stakeholder and legitimacy theories by detailing how the CSR integration in the financial system suffers from governance and inter-/intra systemic information asymmetries. These empirical studies or frameworks allow for the provision of regulatory frameworks, mandatory CSR compliance, obligated education, and structured frameworks on civil stakeholder education. And to structure governance, these frameworks allow for insights to civil stakeholders, banks, and public and private governance.