History Of Banking

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History Of Banking 

The history of banking is quite interesting. Many people might not know this but the first banks were established in ancient times. These were established during the third millennium and were actually religious temples. This was well before the invention of money and deposits were in the form of grain, cattle, agricultural implements and precious metals particularly gold. There are records in existence of loans made by temple monks to merchants in Babylon in the 18th century BC.

 

There is also evidence of banks being in existence in ancient Greece. These were, once again, temples, but even private and civic entities were involved in financial transactions like loans, deposits, currency exchange and validation of coinage. There is also evidence of credit notes wherein a moneylender in one Greek port would write out a credit note for a person, who could encash the note in another city and thereby avoiding the risk of carting money during the journey. Many bankers in ancient Greece were foreign residents.

The history of banking shows us that Pythius, a merchant banker operating throughout Asia Minor in the beginning of the 5th century BC, was the first known individual banker of the world. However, the most famous Greek banker was Pasion, a slave in 371 BC who ended up becoming wealthy and thereby gaining his freedom and getting Athenian citizenship.

Modern banks can be traced back to the coffee houses of London. During the 16th century, moneylenders were already called bankers but their offices were referred to as banks, a meaning which is completely different in today’s time.  

The first modern day bank, however, was founded in 1406 in Genoa, Italy, and it was called Banco di San Giorgio or Bank of St George.

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