How Banking Started: A detailed historical information

How Banking was Started n



The bank is a vast term. It is defined as banking is that system which creates a relationship between lender and depositor. The bank is that institution where people easily save their money and they get a loan for starting their own business. In this world many people are jobless they are getting a loan from the bank on the behalf of fix % of profit which gives to the bank in monthly bases and they can give immovable properties like gold, building etc for getting a loan. In this world rate of the job-seeker is more as compare to job creation if people start their own business they can reduce the rate of the job seeker. The bank is playing a great role to provide a loan.

How bank was formed?

The system of banking was started in Italy (Lombardy) sitting on benches they deal with people provide loans and take their deposit. At that time the name of BANK is”Banque” and Banque means”bench”. The second BANK was established in Germany and they give the name that is “Banc” means “A joint stock company”. After that Italy use the word “Banco” for the bank because on that time a large part of Italy was ruled over by Germans. After a long time, France used “bank” in the same meaning of bank. United kingdom derived the word bank from the French word bank. We are using the word bank throughout the world. The first name of BANK name is a bank of Venice which is present in Italy. And the second bank established in Germany the name of that bank in Hamburg.

Credit for banking development goes to Goldsmith, Merchant, and Moneylender.


Many years before people face the result of theft in largely they left their coins and billion in the custody of goldsmith. When the goldsmith realize that people are not demanding their money to back it for a Long time of period. The goldsmith used the money of people in their own business of gold. When the people demand it to back their money if the goldsmith had not money they sell their gold and return their money.


Those Jews who were migrated from Italy to England on 14th century for permanently. They were rich because they gave their money to the people and earn interest and profit. They started the system of banking in England.


Moneylenders are those when people want a loan they give their money and earn interest or profit. This system is original bank. This system organized by goldsmith they sell and buy money this is included in one type of business. Qualities of a good banking system.


In this world, if people want to start their own banking system they must have their own capital in large amount. Without capital, the banking system cannot be created. That’s why the bank should have their own capital.


If a banker wants their bank in the high level they should maintain a good reputation of it for developing their name.


The banks are going to give the loan to the people they should check their money is secure or not. If they do not check it they face problem for getting their money and their bank will go in loss.


A good banker is those who always earn money with less amount of money.

The bank is playing a vital role in developing the economy of the country. Bank encourage the saving habits among people. It provides a loan to the farmer in the agricultural field because the farmer work on it the name of the country will develop. If a private sector wants to establish the industry bank will provide loan because the inflation rate will be going to reduce when the industry form. Many people work in this industry.

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