Q.2. Trace out the origin of banking.
ORIGIN OF BANKING
It is very difficult to trace out the exact origin of banks. It is said that the evolution of banking business is as old as the concept of money. Crowther in his book AN OUTLINE OF MONEY says that the present day banker has three ancestors merchants, money lenders and gold smiths. A modern bank is something of these. It is believed that goldsmiths and grocers of primitive days started keeping deposits of valuables and jewelleries people on the basis of their sound financial position in the community. They charged a certain amount from the depositors for the services rendered in keeping and preserving the valuables in safe custody. But they soon realized that only a small portion of metal and valuable deposited were taken bark by the people even at the expiry of the stipulated period. They therefore began to make profit by lending a part of these deposits. In case of lending, it was not always gold or silver, but issued their receipts which would pass among the people as if they were gold just like cheques in modern banks. The present day banks are performing the same functions as performed by the money lenders and goldsmiths of older days. Therefore it is believed that goldsmiths and moneylenders are the ancestors of banks.
OR
“Merchants, money lenders and gold smiths are considered to be the ansectors of banks”’’’. Discuss.ORIGIN OF BANKING
It is very difficult to trace out the exact origin of banks. It is said that the evolution of banking business is as old as the concept of money. Crowther in his book AN OUTLINE OF MONEY says that the present day banker has three ancestors merchants, money lenders and gold smiths. A modern bank is something of these. It is believed that goldsmiths and grocers of primitive days started keeping deposits of valuables and jewelleries people on the basis of their sound financial position in the community. They charged a certain amount from the depositors for the services rendered in keeping and preserving the valuables in safe custody. But they soon realized that only a small portion of metal and valuable deposited were taken bark by the people even at the expiry of the stipulated period. They therefore began to make profit by lending a part of these deposits. In case of lending, it was not always gold or silver, but issued their receipts which would pass among the people as if they were gold just like cheques in modern banks. The present day banks are performing the same functions as performed by the money lenders and goldsmiths of older days. Therefore it is believed that goldsmiths and moneylenders are the ancestors of banks.
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