Bank: Definition, Evolution and Development Part -2

 Source and Origin of Modern Banking

Banking-experts pass their opinion that banking system was introduced from the primitive stages of human civilization in some way or other in the world. While reviewing historical backgrounds of social, economic and religious activities of ages, origin of modern banking can be better known. From different angles the source and origin of modern banking can be justified: 

1. Introduction of coins: From the ancient times coins were introduced in different countries as a medium of exchange. So, banking system was in vogue for preservation and safety of coins. The discovery of archaeological symbols have intensified the arguments. At that time excess residual coins were kept with the religious and local elite persons for the purpose of extending help to the needy poor people. Gradually, this became a profitable business for the businessmen and money-lenders. 

2. Different Civilization: At different stages of human civilization, many evidences were recorded for the existence of banks and coins. The archaeological symbols are the evidences of this statement. During Indus Civilization (5000-2000) coins were available in Mohenjudaru of Pakistan, in Egypt coins were found in mummy of Pyramid. In Bangladesh coins of ancient civilization were found at Moynamati of Comilla and Paharpur of Bogra.

 3. Expansion of business and trade: The expansion of business and trade played a vital role for the advancement of modern banking. Because of the fact that in the middle age Indo- sub-continent, Middle-East and Europe progressed tremendously and thus banking business improved for their smooth functioning of transaction. 

4. Various Religions and Religious books: A lot of information regarding banking business were incorporated in the Quran, the Bible,the Bedh and the Mahabharat. 

5. The contributions of Goldsmith, money-lenders and the businessmen: For the growth and development of banking business the Goldsmiths, Money-lenders(mahajan) and businessmen had positive roles. 

(a) The Goldsmiths: From the very ancient periods the Goldsmiths, over and above their own activities, used to act as custodians of the surplus funds of the general people of the society. For that reason they were recognized as a symbol of honesty, sincerity, solvency and security. On receipt of money they used to issue receipts and on return of money they used to take acknowledgements. Later on, these receipts were treated deposit slip and cheque respectively. The deposits receipts were undoubtedly acceptable and popular as notes of the Goldsmiths and afterwards converted into bank notes. Besides these, they used to lend money with interest to the needy people and thus , the words interest and profit were introduced. In the middle ages , the Goldsmiths became very rich and affluent.At one time Goldsmiths used to deposit their money with the treasury of England. During the regime of King , the First Charles, in 1640 , the reserve funds of the Goldsmiths with London Tower were confiscated and they had to pay penalty for taka two lacs pounds. Then they left gold business and got involved with banking business. Thus, the Goldsmiths had a definite role for the advancement of modern bank. 

(b) The Money-Lenders: The Money-Lenders(Mahajan) also played an important role for the growth and development of modern banking. They used to keep surplus money of the people and refund those in case of need. Later, they took it as a profession. They used to pay interest to the depositors and earn interest on loans. They also used to take security, mortgage against loan. In Europe they were called Medici, Bengkuci, Piti, Missouri and in Indian subcontinent Seth,Chetti,Multani, Kabuliwala were the Mahajans.In Europe, most of the Mahajans were jews. Amongst them Shylock of Italy was one of them. Besides, Medici of Lombardi was the world-famous. Lombardi Street in London was recognized after the name of Medici. Patheh Chand was also famous in India.The Emperor Farook Shayar ornamented him with the title of world banker.

(c) Businessmen: Business Class also played vital role for the growth and development of modern banking. From the ancient periods the Business Class were trustworthy to the general people. They were honest ,faithful and solvent. As a result, general people used to deposit money to them for the safety and security of fund. In course of time they were involved in money-lending business. The businessmen of seven-hills of Rome were world-famous.