Corporate Social Responsibility: A Case Study of AXIS Bank

Mr,V,T,Vasagan,
Asst. Professor,
Department of Management
ICFAI University Nagaland

ABSTRACT
‘Success’ is the main mantra of every corporate business house. While selling goods and services to the
customers, they seek the recognition of customers and the society to earn a brand image for a company to
promote their business which yield a competitive edge. The adoption of different CSR strategies through
economic, legal, ethical and discretionary obligations helps in fulfilling their mission to achieve the established
objectives. This paper focus on the need and importance of CSR in promoting business, the strategies adopted by
Axis Bank in CSR and its impact in business. This research paper deals with an understanding about the CSR,
delving into its concepts and finding out its scope by taking the case study of AXIS Bank and identifying the sense
of responsibility towards the upliftment of common masses and protection of the environment and development of
the nation.

Key Words: Corporate Citizenship, Corporate Social Responsibility, Employee, Profitability,

Society, Stakeholder.

Introduction: „Success‟ is the main mantra of any business house. Business houses seek
recognition from external and internal stakeholders. Corporate Social Responsibility is a public
movement that has gained momentum over the past few decades. This movement has resulted
in business becoming more transparent and socially responsible in their actions. Business
houses have started building social criteria into their strategic decision to build their business
and expose to the world that they are socially responsible organizations. In order to get
appreciation from customers and the society, they involve in various social cost activities for
which they adopt CSR strategies and principles. The business houses speds a little percentage
of their profit for CSR implementation. The adopting of CRS promote the company‟s business
which increases profit.
According to Bowen, “CSR refers to the obligation of businessmen to pursue those
policies to make those decisions or follow those line of relations which are desirable in terms
of the objectives and values of our society.” Fredrick (1960) stated “Social Responsibility
means that businessmen should oversee the operation of an economic system that fulfills the
expectations of the people.”
Review of literature
Milton Friedman (1970) expressed that CSR is an executive perk, in the sense that
managers use CSR to advance their careers or other personal agendas. He also advocate that
“One and only one social responsibility of business (is) to increase profit so long as it stays
within the rules of the game that is to say, engages in open and free completion without
deception or fraud.” But present day businesses are expected to shoulder much more social
responsibility. The effectiveness of an organisation now days depend on its ability to develop
itself into a social organisation.
Donaldson and Davis, (1991) Another perspective, stewardship theory is based on the
idea that there is a moral imperative for managers to 'do the right thing', without regard to how
such decisions affect firms financial performance. Donaldson and Preston (1995), who
stressed the moral and ethical dimensions of CSR, as well as the business case for engaging in
such activity.
 Russo and Fouts (1997) tested this theory empirically using firm-level data on
environmental and accounting profitability and found that firms with higher levels of
environmental performance had superior financial performance, which they interpreted to be
consistent with the RBV theory adopted by the World Bank Committee for Sustainable
Development (WBCSD) in 1998 .
McWilliams et al. (2002) applied the RBV framework to demonstrate how US firms
can use political strategies based on CSR to raise regulatory barriers that prevent foreign
competitors from using substitute (e.g. low labour cost) technology.
Goyder (2003) argues that “Industry in the 20th century can no longer be regarded as
private arrangement for enriching shareholders. It has become a joint enterprise in which
workers, management, consumers, the locality, Govt. and trade union officials all play a part. If
the system which we know by the name private enterprise is to continue, some way must be
found to embrace many interests whom we go to make up industry in a common purpose.”
Wood (1991) “CSR implies some sort of commitment, through corporate policies and actions.
This operational view of CSR is reflected in a firm‟s social performance, which can be
assessed by how a firm manages its societal relations, its social impact and the outcomes of its
CRS policies and actions.”
Research found that company which adopts CSR programs influence 70 per cent of all
consumers purchasing decisions, with many investors and employees also being swayed in
their choice of companies.
Need/importance of the study: To understand the concept and scope of Corporate Social
Responsibility and getting an insight in CSR practices in the light of the case study of Axis
Bank . It also aims to study whether Axis Bank practices CSR principles and how it is
practiced .
Objectives of the Study:
 To understand the concept of CSR
 To study the different models of CSR
 To study the different strategies of CSR adopted by Axis Bank and the activities carried
towards CSR.
Research methodology
Literature review related to the topic has been collected from various secondary
sources which includes books, research papers, newspapers, magazines and website for the
purpose of the study. The report of Axis Bank 2012 -13 is main source of information to study
the case.
Corporate Social Responsibility Models
There are some models which describe the evaluation and scope of social orientation of
companies. These include Carroll‟ Model, Halal‟s Model, and Ackerman‟s Model.
1) Carroll’s Model
Archie B. Carroll has defined CSR as the complete range of duties that has to
performed by the business houses towards the society. He has proposed 3-D conceptual model
of corporate performance. According to Carroll, a firm has the following four categories of
obligations of corporate performance.
 Hierarchy of Responsibilities of Business Houses

Economic: The business houses are responsible to satisfy the economic needs of the society
through the generation of surplus income after rewarding stakeholders and further expansion of
business and diversification.
Legal: The business houses carry on their business operation as per the law of the land. MNCs
which are operating cross the globe follow international laws of trade and commerce as per the
host country in which it operates.
Ethical: Ethical responsibilities are the norms which the society expect from the business
houses to follow. Unethical practices such as hording, black marketing other malpractice that
business houses should not adopt while doing business.
Discretionary: Discretionary responsibilities refers to the purely voluntary obligations that a
corporation assumes such as philanthropic contribution and training the unemployed, the
involvement in community development, social project pertaining to health and awareness of
the mass.
2. Halal’s Model
Hala‟s return on resources model recognizes the fact that the corporate social
responsibility is quite difficult task to follow and fulfill the value demanded. Business houses
can only attempt to form a workable coalitions among having diverse interest, engaged in
creating value for distribution among the members of coalition. The social issues may become
conflicting beyond a certain level of economic activity. The coordination of economic and
ethical activities is necessary so that the future of the firm and shareholders may be
safeguarded.
3. Ackerman’s Model
This model defines CSR in three different phases:
First Phase: Top Management recognizes social problem.
Second Phase: Staff specialists are appointed to look into the issues and find measures to
tackle it.
Third Phase: Implementation of the strategy derived by the specialists.
Results & discussion
Axis Bank is a private sector bank which, as on 31st March 2013, has 1,947 domestic
branches including extension counters. The Bank also has branches in Singapore, Hong Kong
and Colombo, as well as representative offices in Shanghai, Dubai and Abu Dhabi. The three
major product and services offered by the Bank are:
a. Deposits
b. Loans
c. Investments and foreign exchange.
Financial Information
The Bank has a balance sheet size of Rs.340,560.66 crores, and paid-up capital of
Rs7.95 crores as on 31st March 2013. The Bank earned a total income of Rs.33,733.68 crores
for the financial year 2012-13 and the profit after tax for the year was Rs. 5,179.43 crores. The
Corporate Social Responsibility (CSR) initiatives of the Bank are channeled through Axis
Bank Foundation (ABF), a Trust which gives strategic direction to the philanthropic activities
of the Bank.
Corporate Social Responsibility Policy based on the principles of National Voluntary
Guidelines on Social, Environmental and Economic Responsibilities of Business. The Policy
has been framed taking into account the expectations of diverse stakeholders, recognizing the
needs of society and the environment. CSR Policy has been approved by the Board and signed
by the MD & CEO. CSR Committee was formed to oversee the implementation of the Policy.
Principle 1 - Governance
It has been the endeavor of the Bank to attain corporate governance standards of the
highest level. The Bank has put in place various Codes of Conduct and covers the aspects of
ethics, bribery and corruption. The Code guides employees to discharge their duties with
integrity, honesty, devotion and diligence and to not act in a manner that is likely to tarnish the
image of the Bank. The Bank has put in place grievance redressal mechanisms to ensure that
customer and employee concerns are addressed promptly and fairly.
Principle 2 – Sustainability of Products and Services
The Bank has recently adopted an “Environment & Social Safeguard Policy” (ESSP),
for carrying out environmental and social due diligence, formulated in compliance with the
International Finance Corporation (IFC) Performance Standards. The Bank offers products and
services that serve the under-privileged and vulnerable groups. The ESSP sets guardrails for
environmental and social considerations while appraising and financing projects which may
help prevent or mitigate any adverse impact/risk to the environment or people. The Bank has
negotiated a Line of Credit of USD 70 million from IFC to facilitate the funding of projects in
renewable energy, clean technology and other energy-efficiency projects.
Table No.-1

Sources: Axis Bank Reports 2012 -2013

It is ensured that in the Bank‟s Corporate Office itself waste and sewage generated by the
Bank is handled in an environment-friendly manner.
Principle 3 – Employee Well-being
The total manpower of the Bank as on 31st March 2013 was 37,901.Of which 7117 are
females.
Table No.-2
Sources: Axis Bank Reports 2012 -2013
The employees of the Bank are its most important asset and the organization ensures
that it meets its moral, legal, ethical and humanitarian responsibilities towards them. At present
there is no employees‟ union but the Bank ensures that employee grievances are received and
addressed through various means of Whistle blower Policy and HR response.
The Learning and Development Team at the Bank is geared towards facilitating the
learning process across all levels through a blended learning approach of classroom programs,
external programs, certification programs and e-learning modules.
Table No.-3

Sources: Axis Bank Reports 2012 -2013

Principle 4 – Responsiveness towards Stakeholders
With a wide geographical reach and large range of financial products and services, the
Bank engage with multiple stakeholders which occurs on an ongoing basis through formal and
informal channels. It has also recently launched an online platform called Progress Together, in
order to leverage the power and reach of social media to build a seamless connect and
engagement experience with various stakeholders.
Principle 5 – Rights of stakeholders
The Bank‟s commitment to its stakeholders is manifested through its Sustainable
Development and Corporate Social Responsibility Policy and bears the responsibility of
behaving as a conscientious corporate citizen across all geographies and demographic
categories. The values of the Bank and its Code of Conduct guide business operations and
customer relationships.
Principle 6 – Caring for the Environment
The banking sector has a lower environmental impact than many other sectors of the
economy. The activities which are undertaken by the bank to protect environment are:
• Renewable energy is generated through solar power plant
• Renewable energy is used to power emergency lights
• Use of natural light is maximized
• All light fixtures are energy star-rated
• Motion sensors are installed throughout the building
• Sewage treatment plant has been installed for re-using waste water
• Urinal and wash basin sensors installed
• Rainwater harvesting system has been installed
• Provision of quality indoor air for safety and comfort
• Dry waste is recycled
Green Banking
Over the past two years, the Bank has embedded in its culture, the practices of Green
Banking, as part of the endeavor to carry out its part to protect the environment. In doing so, it
has successfully brought the entire Axis Bank family together. A few of the initiatives that
have been taken under this program are outlined below.
• Car-pooling initiative has been introduced to reduce carbon footprint
• The Bank encourages customers to subscribe to the use of e-statements and other electronic
formats in its communication1, significantly reducing paper consumption
• Annual reports are being sent through e-mail: in the previous year, 61% of all shareholders
received their annual reports via e-mail
• Dry waste is collected at Axis House for recycling and manufacture of bio-degradable and
eco-friendly bags and notepads
• We have moved to e-greetings instead of the normal paper greetings sent earlier
• 1000 sapling are planted at 1000 places all over India.
• The Bank has recently initiated solar-based UPS for ten ATMs under its Independent ATM
Deployment (IAD) model.
Principle 7 – Policy Advocacy
Policy advocacy is any effort to influence public policy by providing information,
speaking to decision makers, demonstrating benefits for policy change and other such activities
that encourage the adoption of the desired policy change.
Principle 8 – Impact on Social and Economic Development
The Bank carries out its Corporate Social Responsibility (CSR) initiatives under the
aegis of the Axis Bank Foundation (ABF),which was set up in 2006 as a Public Trust. The
Bank has been annually contributing upto 1% of its profits after tax to the Foundation. As of
31st March 2013, ABF has supported 96 NGOs and amounts disbursed under various programs
aggregate to Rs`81.97 crores. The Bank‟s employees are also encouraged to actively
participate in the various initiatives and projects undertaken by ABF.
During the initial five years, the Foundation‟s work was primarily focused on
education. ABF partnered with sixty NGOs to provide equitable education to various
underprivileged individuals across the country. In 2011, ABF ventured into providing
sustainable livelihoods to the disadvantaged. ABF partnered with seventeen NGOs across the
country, with an ambitious target of providing one million sustainable livelihoods by 2017.
Today ABF makes a significant difference in the lives of people across 163 districts in 19
states through 40 different Livelihood and Education programs.
Table No.-4

Sources: Axis Bank Reports 2012 -2013

Livelihood Programs:
Keeping in mind the need to address issues in regard to employment and employability, ABF
focuses on developing and facilitating sustainable livelihoods.
Table No.-5

Sources: Axis Bank Reports 2012 -2013

Table No.-6

Sources: Axis Bank Reports 2012 -2013

Education Programs:
The Bank believes that education is the key to alleviating poverty, and works with
NGOs for children, making efforts to reach out to as many people as possible in the education
space. It also aims to help create capabilities in terms of skills and employment opportunities
for disadvantaged/differently-able people.
Table No.-7

Sources: Axis Bank Reports 2012 -2013

Table No.-8
 Sources: Axis Bank Reports 2012 -2013
Public Health and Medical Relief
The highway trauma care initiative of ABF has assisted ~11,000 major accident victims and
7,000 minor accident victims till 31st March 2013. The program has a tie up with 289
ambulances, 139 hospitals and 85 police stations. The program covers 4,200 kms across
Rajasthan, Maharashtra, Kerala and Gujarat.
Table No.-9

Sources: Axis Bank Reports 2012 -2013

Employee Participation
Besides supporting the philanthropic initiatives of ABF, the Bank also encourages employees
to participate and become socially responsible citizens.
Table No.-10

Sources: Axis Bank Reports 2012 -2013

Principle 9 – Customer Focus
The Bank considers customer-centricity as the key pillar and guiding principle for
delivering a differentiated and unique banking experience for its customers by undertaken
various customer engagement initiatives such as customer satisfaction surveys, „Let‟s Talk‟
programs etc. The Bank follows the requirements of various codes in this regard:
Table No.-11

Sources: Axis Bank Reports 2012 -2013

Consumer Education:
The Bank conducts Van Campaigns across rural markets to enhance financial inclusion and
education, and a special education series called KrishiPragatishaala for farmers, which
provides them a platform to interact with agricultural experts and undergo lessons in enhancing
productivity.
Regional Communication:
The Bank‟s existing Liabilities Contact Centre offers services in 11 languages, amongst the
highest in the industry.
Table No.-12

Sources: Axis Bank Reports 2012 -2013

These complaints refer to various aspects of the Bank‟s operations and include among
other issues – systems, processes and technology, delay/deficiency in service and charges
levied by the Bank. There have been no cases filed relating to unfair trade practices,
irresponsible advertising and/or anti-competitive behavior in the past five years.
Customer Satisfaction Studies
The Bank uses different methods to gauge and understand customer satisfaction levels.
Customer Transaction Survey is conducted to know its customers and ensure ongoing customer
satisfaction.
Fig No.-1
Findings
 Since business is an integral part of the social system Axis Bank take care of variety of
the social needs of the society.
 It spent 1% of its profit towards Corporate Social Responsibility activities i.e Rs 42.42
crores during the financial year of 2012-13.
 It promotes education, sustainable livelihoods, public health, medical relief and
environmental protection through Green Banking activities.
 It safeguards the interest of internal and external stakeholders of business house.
Recommendations
 The concept of Public-Private Partnership should be adopted in the effective
implementation of CSR practices i.e. with the government.
 The Human Resources Department of the organization given responsibility to measure
and evaluate each program implemented toward fulfilling the CSR.
 Periodic review of the CSR activities should be conducted by every business houses
entity so as to identify the pitfalls in the areas left out.
 The profit percent spend on CSR activities should be increased in the interest of the
public.
 ABF can run old age homes for the poor and needy.
Limitations
This research paper did not consider legal aspects like corporate governance, labour and
employees welfare related laws under considerations and the CSR activities undertaken were
not cross checked.
Conclusions
Every business houses owe some social responsibility towards the society, nation and
the world since it operates for them, which provides human resources and natural resources.
Long run growth and sustainable development are main objectives of any business houses.
They try to achieve their objectives through CSR practices. As far as Axis Bank is concerned,
it has gone long way in fulfilling its duty and responsibility towards the society within a short
span of time. This business house is socially responsible firm which work for the welfare of the
society. The CSR activates conducted by the bank needs proper evaluation so that the real aims
and objectives of the business house can be achieved in the interest of the society where it sees
the „Success‟.

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