How did we arrive here? The business of banking came about in response to the needs of people. In the 18th Century when gold coins were the means for exchange of goods and services, the issues of safe keeping of the coins arose. As a result, a search for a safe place to keep people’s wealth started. The temple then was found out to be a safe place to keep this wealth because it was a sacred place with solid building that seems fortified.
Though is was a place constantly attended, people who go there do so with a character that is seen as sacred hence, thieves would not even dear enter. So people started keeping their monies in this safe place and it was accumulating there lying idle. History has it that this was the practice then in Egypt and Mesopotamia.
Opportunity for smart thinking
Money was in the hands of some people in excess while some other groups of people were in want of it: governments and business people. This brought about an opportunity for smart thinking priests in the temple back in Babylon. They saw a need for money and they met the need with the idle monies kept in the temple. They started giving out loans; that brought about what we know as banking today.
Reducing the risk
Back then in Greece and Rome, the activities of banking was more different than in any other community. Worship temples, government organizations and private business people were involved in money issues; taking monies to keep in safe custody, changing money from a currency to another and testing the weight and purity of coins brought to them. They went as far as taking records in books. Some individuals became professional moneylenders. They could take deposits in a city and agree to make it available for the depositors’ use in another city, thereby reducing the risk and extra weight involved in carrying the coins.
The Roman government then adopted rules and regulations to control the practice of banking at that time in Greece which made banking business become recognized by the government. It was so legalized then that anyone having a debt to pay will be accepted as being free of the debt immediately he makes the payment of the sum to the bank, though bringing it to the notice of notaries public who were saddled with the responsibility to make a record of such a payment.
After the fall of the Roman Empire
The fall of the Roman Empire afterward and the resultant slow down of trade made things worse for the evolving banking industry back then. And an end to that era of evolving civilization came about quicker by the doctrines of the Roman Church which was against the charging of interest. Interest charges were seen as usury which to them was offensive to morals. As Christian authorities made usury illegal, people of other religions seized the opportunity and they started providing banking services. They were not so successful at it because they operated as a religious organization putting their beliefs into the operations.
We have really come a long way from that point. Banks are now been run by professionals who acquired the knowledge and skills needed in banking through formal education and practice. Banking has also become one of the highly regulated trades by governments and professionals all over the world.
