CSR standards and Islamic banknig practice: A case of Meezan Bank of Pakistan

Business and finance firms have been showing an increasing reliance over their CSR performance to win stronger support from stakeholders and community groups leading to their long-term sustainability, growth and success. Islamic banks and financial institutions came into being to fervently serve the humanitarian agenda in business and community. They hold the Shariah-based paradigm which demands from them to aggressively work for the betterment and welfare of weaker economic groups and general public. They perform an intermediary function between the depositor and the fund seeker by eliminating the institution of interest and promoting socio-ethical values and market efficiency principles such as risk-sharing, fairness, mutual cooperation, universal brotherhood and social justice. They engage in business and finance activities which deliver highest productivity of capital and resources in the best interests of poor and weaker economic groups and general public. They extend venture capital and technical supports to talented and small entrepreneurs for setting up their own business units for promoting more vibrant and sustainable local communities. They hold onerous responsibilities to channelize the community’s financial and material resources for ensuring the optimal market productivity with social justice. This paper explores the CSR initiatives at Meezan Bank of Pakistan. It observes the evidence of positive relationship between the firms’ CSR initiatives and financial performance in the case of Meezan Bank. The bank has been successfully competing with powerful competitors in the given conventional regulatory environments of Pakistan through its well-placed CSR initiatives and Shariah-based performance. The bank has been supporting health, education, charities, donations and natural disasters relief efforts to promote sustainable communities and environments in Pakistan. The bank relies on stakeholders’ feedback and consultation to evolve its corporate and societal strategies. These community-based initiatives help the bank to secure the increasing legitimacy and public support leading to promising growth and success over the past 13 years. The bank appears to be a role model for other Islamic banks and conventional banks in Pakistan to come up with stronger CSR initiatives for securing their long-term sustainability and success. Islamic banks may become main hubs for ethical business and finance investments across Muslim and Western worlds if they truly follow their etho-religious based CSR agenda in their actual practice.