Banking has been practised for at least 4,000 years, mostly by individuals, families and countries. Clay tablets from around 2,000 BC show that the ancient Babylonians deposited their wealth in banks, paid service charges and borrowed money.
The rise of empires and commerce sped the development of banking. In ancient Rome an entire street, the Street of Janus, was set aside for exchanging foreign currencies, obtaining loans and other bank activities. In the Middle Ages many bank activities were stopped because the Roman Catholic church had laws against the practice of lending money, known as usury. By the time of the Renaissance international trade had revived, leading to a growing need to exchange money.
In the late 1500s two cities in Italy, Florence and Venice, became great banking centers. As other centers of trade arose throughout Europe, banking systems needed to be set up. The Bank of Amsterdam opened in 1609, and in 1656 a public bank opened in Sweden that issued the first bank bills, which replaced the use of copper coins.
In England goldsmiths served as bankers until the Bank of England was founded in 1694. They stored money and other valuables for customers, and they exchanged foreign currency. These goldsmiths saw that deposits and withdrawals usually balanced each other out because customers withdrew only the money they needed from day to day. The goldsmiths realised that they could lend the remaining money at interest without harming their customers' savings. These practises led to the modern form of banking: taking deposits, lending money and keeping money in reserve.
Eventually, national banks came into being in several countries. In England, the first national bank, in 1833, was the National Provincial Bank of England. This later became National Westminster Bank (NatWest), which still operates today.
A number of innovations in banking arose in the second half of the 1900s. For example, banks began to issue credit cards, which allowed customers to buy goods on credit from retailers. These cards were nationally recognised by the 1970s. In that decade banks began allowing customers to manage deposits and withdrawals through automated teller machines, or ATMs (often called cash points). The rise of personal computers in the 1980s and 1990s led to computerised banking, which allowed customers to pay bills, transfer funds between accounts and perform other activities over the Internet using their computers.
Source: (Encyclopedia of Britannica)
The rise of empires and commerce sped the development of banking. In ancient Rome an entire street, the Street of Janus, was set aside for exchanging foreign currencies, obtaining loans and other bank activities. In the Middle Ages many bank activities were stopped because the Roman Catholic church had laws against the practice of lending money, known as usury. By the time of the Renaissance international trade had revived, leading to a growing need to exchange money.
In the late 1500s two cities in Italy, Florence and Venice, became great banking centers. As other centers of trade arose throughout Europe, banking systems needed to be set up. The Bank of Amsterdam opened in 1609, and in 1656 a public bank opened in Sweden that issued the first bank bills, which replaced the use of copper coins.
In England goldsmiths served as bankers until the Bank of England was founded in 1694. They stored money and other valuables for customers, and they exchanged foreign currency. These goldsmiths saw that deposits and withdrawals usually balanced each other out because customers withdrew only the money they needed from day to day. The goldsmiths realised that they could lend the remaining money at interest without harming their customers' savings. These practises led to the modern form of banking: taking deposits, lending money and keeping money in reserve.
Eventually, national banks came into being in several countries. In England, the first national bank, in 1833, was the National Provincial Bank of England. This later became National Westminster Bank (NatWest), which still operates today.
Modern Banking
A number of innovations in banking arose in the second half of the 1900s. For example, banks began to issue credit cards, which allowed customers to buy goods on credit from retailers. These cards were nationally recognised by the 1970s. In that decade banks began allowing customers to manage deposits and withdrawals through automated teller machines, or ATMs (often called cash points). The rise of personal computers in the 1980s and 1990s led to computerised banking, which allowed customers to pay bills, transfer funds between accounts and perform other activities over the Internet using their computers.
Source: (Encyclopedia of Britannica)
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