History Of Banking

How did modern Banking Start?

The word bank has many origins in French Banque, in Italian banca, in German banc, all these words means a bench or a bench counter, in early banks the benches were used as a counter so the word bank is given to these types of modern financial institutions.

The early banking was done by the traders of ancient times, who provide loans to farmers and other working people doing several other works. The first sign of such transaction is said to be done approximately in 2000 BC in the countries like Assyria and Babylon, after it these transactions started taking place in Greece, and when Roman Empire was in control of the vast part of the world the money lenders used to sit at temples. They developed two important aspects during this period along with lending they started accepting the deposits too.

History of Banking tells us that banks developed to a greater extent in medieval and renaissance period of Italy because in this period there were cities which were rich, so they needed an institution like this. During medieval period the two families named Bardi and Peruzzi were in dominance in the field of banking in 14th century they established their branches in all the other regions of Europe.

According to the History of Banking, banking reached Amsterdam in the 16th century in and 17th century it reached London after it in the 20th century when the communication and computing system were invented the work and efficiency of the banks were greatly improved. This allowed them to increase in number and size noticeably in all around the world.

History of Banking in Several parts of the world

History of Banking shows that In Mesopotamia the records of loans were found, around 2nd century these loans were given by temple priests to the traders. But around 1760 BCE the banking in this region was quite developed and there were proper rules of banking according to the Hammurabis code.

In Egypt the grains and precious metals were used for transactions and countries ware houses were used as banks to keep these items. These stores were then transformed into a chain and were centralised at Alexandria where all the data was recorded.

In India it came in existence in Maurya Dynasty around 321 BC, at that time a document called Adesha was used, which orders a banker or lender to pay the money to a person, it was just like bill of exchange as we use today. Merchants in big cities used this document for their transactions.

What is the need for Banking?

The need of banking can never be ignored that is why they started to exist long way ago, because people thought keeping so much of grains, precious metals and money is not good at home due to the robbery and fear of dacoits, so this need gave the birth to this institution, as now we can see how much helpful they are to us, we can transfer the money with just a click on a button and receive our payments also in the same manner, in early times the facilities were not so good but when the banking started to develop the many sort facilities were available to the people. As they can store their grain or metals there and can take it back when they need to. So the banks were of real important then and we can not even imagine a world without banks today even.

So from the very beginning this kind of institution is being needed as we go through the history of banking we will see that this institution is of very high importance today and it was always.