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Evolution of Banking in India Historical Angle - Part 3.1 BY AYUSSH SANGHI
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Historical Angle An institution where currencies were stored has been for quite some time It was known by "whatever name" but today we call it as a Bank. Currency, particularly the use of coins were used as a medium of exchange in the early days of ancient empires.
Historical Angle Coins were charged as a tax by the ancient empires, but when empires grew in size, this type of payment became less wanted and desirable. Additionally, empires began to need a way to pay for goods and services imported form other countries, with something that could be exchanged more easily . Coins of varying sizes and metals served in the place of fragile, impermanent paper bills.
Historical Angle . But these coins had to be kept in a safe place. Ancient homes didn't have the benefit of a steel safe, therefore, wealthy people held accounts at their temples. Numerous people, like priests or temple workers whom one hoped were honest used to add a sense of security.
Historical Angle Example: Countries like Greece, Rome, Egypt and Ancient Babylon give evidence that temples used to give out loans in addition to keeping it safe. The fact that most temples were also the financial centres of their cities, is the major reason that they were ransacked during wars.
Historical Angle Temples used to lend: large loans . loans to various sovereigns and new money lenders
Establishment of Bank - Roman Angle . Looking at the historical angle, it was important to institutionalise the Temple approach of giving out loans This leap was taken by the Romans. They were builders and administrators and took banking out of the temples and formalized it in offices and buildings. The offices and moneylenders used to earn profits. al spending, involved the use of an institutional bank.
Establishment of Bank - Caesar Angle Julius Caesar, went ahead with the banking approach. He gave orders gives of allowing bankers to confiscate land irn lieu of loan payments. This was a monumental shift of power in the relationship of creditor and debtor as they used to pass debts off to descendants until either the creditor's or debtor's descendants died out.