BANKING THEORY AND PRACTICE - 21TH EDITION
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changed in character and content very much. They have developed from a few simple operations involving the satisfaction of a few individuals wants to the complicated mechanism of modern banking, involving the satisfaction of the whole community by securing
Evolution of Banking Institutions
speedy application of capital seeking employment and providing the very life blood of commerce. The system of banks was started by Babylonians before 2000 BC As early as 1349, the business of banking was carried on by the drapers of Barcelona. In Rome, bankers were called Arjentarii, Mensarrii or Callybistoe and banks were called Tabernoe Argentarioe. Payment of money by a draft was known as prescribere and rescribere whereas a draft was known as attributio. According to the Italian dictionary, Monte means a standing bank or mount of money. The origin of English banking may be traced to the business of London goldsmiths. In 1964, the growth of private banking and establishment of the Bank of England led to the ruin of goldsmiths. The books of Manu, the Sanskrit law giver, contain references to deposits, pledges, policy of loans and rates of interest.
COMMERCIAL BANKING THEORY
2 COMMERCIAL BANKING
LEARNING OBJECTIVES After reading this chapter, a student should be able to get an insight into Functions of commercial banks and the services rendered by them General structure and methods of commercial banks Mechanism of credit creation by commercial banks The clearing house system Systems of banking such as unit banking, branch banking, holding company banking and chain banking Investment banking and mixed banking Universal banking