Profit with Purpose: Exploring the Economic Returns of CSR in Indian Banks

Abstract

The study examines financial performance and Corporate Social Responsibility (CSR) by examining four well-known Indian banks: ICICI, SBI, PNB, and HDFC. The study examines how CSR investments affect essential financial performance indicators. Quantitative methods were used to extract secondary data from financial databases, bank annuals, and CSR reports from 2013 to 2023. Financial metrics such as ROA, ROE, and NPM are examined in relation to CSR spending and the scope of CSR operations using multiple regression analysis. According to the study results, extensive CSR initiatives are directly associated with better financial success, with statistically significant correlations between CSR expenditure and key financial performance metrics, including ROE (β = 0.25, p < .01) and NPM (β = 0.20, p < .05). Additionally, the scope of CSR activities positively influences ROA (β = 0.15, p < .05), ROE (β = 0.30, p < .01), and NPM (β = 0.22, p < .01). These findings underscore CSR’s strategic importance by demonstrating that CSR investments enhance profitability and equity returns and align with stakeholder expectations for sustainable and responsible business practices. For policymakers, this highlights the value of encouraging CSR through supportive regulations. For investors, it shows the potential for CSR to contribute to long-term financial stability. At the same time, for banking executives, it emphasizes the need to integrate CSR into core business strategies to drive sustainable financial growth.