Impact of Corporate Social Responsibility on Financial Performance: Evidence from Indian Banks

Conventionally, businesses' main responsibility has been to be profitable. Pursuing profit is often perceived as disregarding an organization's other objectives. However, in today's rapidly changing environment, businesses realize that maintaining profitability requires embracing social responsibility. The authors have investigated the Bombay Stock Exchange listed commercial banks to delve into the interplay between the Corporate Social Responsibility (CSR) initiatives and Financial Performance (FP) in the Indian banking sector. The authors have employed the technique of panel regression to testify the interconnection between CSR and the three indicators of financial performance: Earning per Share (EPS), Return on Assets (ROA), and Return on Equity (ROE). CSR data is gathered from the yearly reports of the chosen banks using the technique of content analysis. The outcome of this research indicates that the CSR activities of the Indian commercial banks exert a positive impact on their economic performance. The results suggest that CSR activities positively impact ROE, and EPS while ROA shares an insignificant relationship with CSR.