The history of the word “Bank” is linked with the Italian word Banco (old one) both meaning “Desk/Bench”, Greek word Bancus meaning “bench/table” and French word Banquet meaning a bench. Although the original trace to the present word bank is not yet completely clear, they all mean that those words were intending to point to the bench.
The first bankers sat behind a little bench on the open street with their money piled up on the bench in front of them. This was their “bank”, and when their money was lost, then their bench was said to be broken.
They used to exercise themselves in this kind of business in the public places of trading cities seated themselves upon form with benches to write their letters, count their money, or to draw their bills of exchange.
The first bankers sat behind a little bench on the open street with their money piled up on the bench in front of them. This was their “bank”, and when their money was lost, then their bench was said to be broken. They used to exercise themselves in this kind of business in the public places of trading cities seated themselves upon form with benches to write their letters, count their money, or to draw their bills of exchange.
When they failed, and because unable to pay their debts their benches were broken as a mark of infamy: from which the word bankrupt is derived. The word “bankrupt” is of Italian origin, as in Florence the term bacarotta meant “broken bench” hence a bankrupt had his bench broken.
History of Bank (Banking Activities)
The historical concept of banking activities deepens its toots to the past when people started having their properties. People started saving the concept. People identified gold as a means to store their wealth.
More the gold you have; the wealthier you are than others. Thus the wealth was compressed into the convenient form of gold brings one disadvantage. Unless well-hidden or protected, it is easily stolen. So there needs the safest place to hide gold.
In early civilization a temple is considered the safest refuge; it is a solid building, constantly attended, with a sacred character which itself may deter thieves. In Egypt and Mesopotamia, gold is deposited in temples for safe-keeping.
But it lies there, while others in the trading community or in government have desperate need of it. In Babylon at the time of Hammurabi, in the 18th century BC, there are records of loans made by the priests of the temple. The concept of banking has arrived.
The first regular institution resembling what we call a bank was established in Venice, nearly seven hundred years ago. The increase of trade in 13th century Italy prompted the revival of banking. The money changers of the Italian states developed facilities for exchanging local and foreign currency. Soon merchants demanded other services, such as lending money, and gradually bank services were expanded.
The first bank in the world was established in Venice in 1157 AD. Historians conflict with facts. Some argue that the Bank of Venice (1157AD) was just a chamber of loans and was not a perfect bank at all. Some believe that the first bank to offer most of the basic banking functions known today was the Bank of Barcelona in Spain.
This bank held deposits, exchanged currency, and carried out leading operations. It is also believed to have introduced the bank cheque. Three other early banks, each managed by a committee of city officials, were the Bank of Venice (1157AD), the Bank of Amsterdam (1609), and the Bank of Hamburg (1619). These institutions laid the foundation for modern banks of deposit and transactions.