Corporate Social Responsibility and Financial Performance Linkage:Study of Indian Banking Sector

Abstract

This paper attempts to examine the linkage between corporate social responsibility (CSR) and corporate financial performance (CFP) in the Indian banking sector. For this study, a sample size of 12 listed public and private banks has been selected from CNX Bank Index of NSE. Corporate social performance (CSP) for sample banks has been calculated on the basis of activities performed by banks in specific CSR areas like Environment Protection, Community Welfare, Education, Women Welfare, Farmers' Welfare, Priority Sector lending and Financial Literacy. In order to measure corporate financial performance, ratios like RONW, NIM and CAR have been used. Annual reports of the banks have been used to get required data on CSR and CFP. To statistical analysis the data, Pearson correlation, T-test and regression model are used. Empirical results indicate that there is no significant relationship between the Corporate Social Responsibility and Corporate Financial Performance in Indian banking sector.