NRB New CSR Rules: Banks Must Spend 60% of Funds Annually
18th March 2025, Kathmandu
Nepal Rastra Bank (NRB) has introduced new guidelines requiring banks and financial institutions (BFIs) to spend at least 60% of their Corporate Social Responsibility (CSR) funds each fiscal year. The “Institutional Social Responsibility Guidelines 2081” aim to ensure the effective use of CSR funds for social development.
NRB New CSR Rules
Under the guidelines, BFIs must spend 60% of their CSR funds within the same fiscal year after their financial statements are approved. The remaining funds can be carried forward. Additionally, commercial banks and national-level financial institutions must allocate at least 10% of their CSR funds to each province.
BFIs can use CSR funds in areas like education, health, humanitarian aid, environment, financial literacy, and sustainable development goals (SDGs). However, the funds must only go to government, community, or non-profit organizations to prevent misuse.
To ensure transparency, the guidelines limit spending on a single program to 5% of the total CSR fund. This prevents over-concentration of funds in a few projects and promotes broader social impact.
The new rules address concerns about BFIs accumulating CSR funds without proper utilization. Previously, BFIs had to allocate 1% of their net profit to CSR activities, but many failed to spend the funds effectively.
NRB has instructed banks and financial institutions (BFIs) to develop clear operational procedures for managing CSR activities and funds. These procedures will outline how CSR funds are allocated, spent, and monitored.
The BFIs must submit these procedures to their respective boards of directors for approval. Once approved, the guidelines will ensure transparency and accountability in CSR fund utilization. This step aims to streamline CSR activities and enhance their impact on social development.
The central bank expects the guidelines to enhance the role of BFIs in addressing social issues and supporting sustainable development. By ensuring timely and equitable use of CSR funds, the directive aims to strengthen corporate social responsibility in Nepal.
