CHARTING THE COURSE OF SOCIAL BANKING:

ANALYSING THE THEORETICAL AND EMPIRICAL UNDERLYING SOCIAL CRITERIA

Abstract

This paper delves into the evolving landscape of sustainability in banking, particularly exploring the growing relevance and institutionalization forms of social banking. To this end, it first introduces a dynamic multi-theoretical framework, incorporating legitimacy, stakeholder, and institutional theories, to analyze the rise of social commitment of financial institutions. Secondly, two contrasting approaches are discussed to understand their different institutionalization forms and evolution – the corporate social approach adopted generally by mainstream banks and the tension perspectives approach of social banks. The former often engages in adjustments of determinate banking practices to meet societal expectations, while the latter, embraces tensions inherent in sustainability. To conclude this article advocates for considering the dimensions of social banking, rather than exclusive definitions, as an unlocked potentiality to overcoming the claimed debate surrounding the definition of social banking. The proposed framework and outlined dimensionality aim to contribute to advancement in understanding the evolving role of banks in society, especially in the context of sustainability.