Federal bank fails to spend Rs 1.87 Cr of its CSR budget for 2019-20

New Delhi, 22 January 2021: Federal bank, an Indian private sector, scheduled commercial bank has failed to spend 7% of its CSR budget for the year 2019-20. The bank headquartered in Aluva, Kochi was founded on 23 April 1931.

The company’s average net profit before tax for the last three financial years stood at Rs 1519.20 Crores. The amount to be spent by the Bank towards CSR for FY 2019-20 as per Section 135 of the Companies Act, 2013 was calculated as Rs 30.38 Crores out of which it could spend Rs 28.51 Crores only. CSR obligation of a company is calculated as 2% of the average net profit of the past three years.

The company however had previously also defaulted on its CSR obligations and was directed by the MCA (Ministry of Corporate Affairs) to spend its unspent CSR amount from FY2015-16 within six months from August 08 2019. The CSR expenditure for 2019-20 was Rs 28.51 Crores as against the gross amount required to be spent is of Rs 30.38 Crores. In addition to the above spent, the Bank had also spent Rs 13.88 Crores during FY 2019-20, the unspent amount of CSR contribution for FY 2015-16.

Courtesy: Annual Report

"With respect to FY 2015-16, the prescribed CSR allocation was Rs 26.18 Crore, while actual spent was Rs 12.30 Crores. on August 08, 2019, MCA had permitted the Bank to utilise the unspent amount of CSR contribution for FY 2015-16 amounting to Rs 13.88 Crores ("Unspent Amount"), within a period of six months and permitted to utilise the unspent amount through the Federal Bank Hormis Memorial Foundation (trust). Further, the Bank had transferred the Unspent Amount of Rs 13.88 Crores to the Trust, a special purpose vehicle carrying out the Bank’s CSR activities", says the annual report of the company.

"The unspent amount of Rs 1.87 Crores pertaining to FY 2019-20 will be added to the CSR corpus fund and the same will be spent in the coming years", says the company in its annual report.

The CSR Committee of the company as on March 31, 2020, CSR Committee consisted of K Balakrishnan as Chairman, A. P Hota as Independent Director, Shyam Srinivasan as MD & CEO and Ashutosh Khajuria as the Executive Director. During the financial year 2019-20, the CSR Committee met thrice on June 12, 2019, August 06, 2019 and February 06, 2020.

CSR spend by Federal bank sector wise

The CSR projects of the company are executed under the Hormis Memorial Foundation and the foundation is acting as a special vehicle for implementation of CSR activities of the Bank. Major CSR projects undertaken during FY 20 were:

Donation to Army Welfare Fund: In the background of Pulwama Attack, as a mark of respect to our brave soldiers, the Bank had announced donation of   Rs 1.00 for each transaction done through the Bank’s Retail Digital Channels during the period from 01.03.2019 to 31.03.2019 to Army Welfare Fund.  The donation was made to the Army Battle Casualties Welfare Fund on 22.08.2019.

Federal Bank Hormis Memorial Foundation Scholarships The Foundation is providing scholarships to the deserving students for pursuing professional courses from the year 2005-06. From FY 20, additional Scholarships added for the benefit of wards of martyred Armed Forces Personnel. The Bank had received one application under the said category. During the year 2019-20, the trust offered assistance to 113 meritorious students, 20 students from various streams - Medicine, Engineering, BSc (Agri), MBA and 32 students from BSc Nursing.

Federal Skill Academies As part of the Corporate Social Responsibility initiatives, the Bank started Federal Skill Academy at Kochi on Founder’s Day-2015, 18th of October 2015.The social initiative was launched to give wings to the youth belonging to the underprivileged section of the society.