Bank Shastra

 History of Lending The loan and borrowing practice are just as old as a money. The history of the lenders and creditors indicates that there were strict rules for credit in Sumerian civilization, Ancient Greece and Antediluvian Rome as early as 2500-2000 BC. It is fun to imagine how people made their financial or economic transactions in early civilizations? And what for? And what for? The House of Egibi The House of Egibi was one of the first families to engage in trading. Babylon was at war against ancient Egypt at the time. The (biggest king of Babylon) Nebuchadnezzar II formed his army and offered the people land. In return, the massive workforce to build a massively powerful army to invade and conquer the areas surrounding it. In ancient Babylon there was consequently a significant need to farm the land. It was here that The House of Egibi entered. They were successful in fulfilling the role of property management during Nebuchadnezzar II. As a result, the men who owned the l...

What is Imperialism?  Imperialism is a policy of extending a country’s land by capturing land of other nation on basis of military power, economic power or by any other mean. It was a common practice during 3rd century BCE to 19th century CE. Imperialism brought many technologies, knowledge, administration, arts, culture i.e. socio-cultural revolution along with it.  After 16th century CE when trade became very prominent and west started to expand, it created many colonies around the globe. Like, Britain had colonies in India, The U.S, Parts of Africa and Australia.  Regardless of atrocities it brought to people of that nation, it brought some good practices like modern banking system. Even thought these nations used monetary systems much more for its benefits that for colonies it ruled, many of the good facilities it provided were beneficial in long run. In 1776, The U.S got independence and in 1791 the first nationwide commercial bank was introduced, it was jointly hold...

Inception of Modern Banking  Bank of England is recognized as the father of modern bank. In 1695, it became the first bank to issue banknotes, these banknotes were given as a loan and promised bearer the value of the note, this structure of issuing banknotes is still active and widely used around the world. England’s dominance in seaborne shipping and introduction of industrial revolution gave birth to many banks around the world more over in London. By 1745, standardized printing of notes began, notes ranging from £20 to £1,000 were issued, and till 1855 notes without name of payee and cashier’s signature were introduced. 18th century saw a surge in bank services like cheque , overdraft, clearing facility, security deposits. Royal bank of Scotland introduced the overdraft facility in 1728. This was the time many new schemes and different banks were getting introduced, such example was Merchant banking firm in London in late 18th century, which dominated the world of banking for ne...

 Barter System Barter system is a method of exchanging goods and services for goods and services without medium like money. Before, money was invented people use to trade for goods for goods, for example, a farmer uses to trade crop for cloth or pots. Simply barter means Bilateral Trade , a give and take relationship between people. Records suggest early examples of barter system were seen in Mesopotamia tribes, who use to trade weapons, food, and tea.  Also, China and India show, the early examples of barter system in use during 6th century BCE. As simple it may sound, barter system was not simple to implement. There was constant disagreement among the people regarding, quantity of goods to be traded. Let’s take an example, A farmer who needs a bag of salt would go to a person who cultivates salt and ask for a bag of salt, in exchange farmer is willing to offer a small bag of rice to salt trader. But salt trader denies farmer’s request and demands 2 bags of rice for a 1 bag o...

Origin and History of Bank The word bank has become an integral part of our life. Our society, work, and life are directly or indirectly dependent on banks. But, do you know how this banking system came into existence? Well as always there is a story here as well. The word ‘Bank’ is derived from a word banca , which means bench in Italian. The foundation of modern bank has an interesting story, many geopolitical and religious activities has created today’s Modern Banking System Story During medieval Europe, silk route from Asia to Europe via Middle East, gave an opportunity to trade related activities. Traders from silk route brought ancient practices of financing long route trade along with them. Around that time, Jews were persecuted in Spain, many of them came to Lombard, Italy. Jews were not allowed to own land in Italy, so they started trading in halls and piazzas (a kind of square market area) of Lombardy. They started to lend money to farmers as a high-risk loan which they learn...