History of Banking

In the east , it is believed that banking was practiced at the time of “Manu” as it is referred Manusmriti. Banking was also practiced during Chanakya’s time too as banking has been mentioned in “Kautilya’s Arthasastra”, which is the first book on economics.

In the west, the history of banking begins in ancient Greece, Rome and Mesopotamia. The Lombards who originally from the plains of Lombardy  of Northern Italy, introduced banking practice to England.

 After the Lombards, the goldsmiths practised banking as a sideline to their normal activities in the bullion and jewellery fields. The early gold goldsmiths used to have large vaults, which were soundly built and heavily guarded. The person who deposited his surplus funds with the goldsmith became as a depositorand naturally paid for the privilege of having his money defended this way. These payments are called ‘bank charges’. The depositors who needed funds to pay wages or debts, could call at the bank and collect such sums as required.

Modern banks history begins from the bank of Venice established in 1157 AD, Bank Barcelona established in 1401, bank of Genoa established in 1407, Bank of Amsterdam established in 1609 and Bank of England, which was established in 1694.