Banking in India : Origin & Evolution

1693 WordsMay 14, 20117 Pages
ORIGIN AND EVOLUTION OF INDIAN BANKING Opinions differ as to the origin of the work "Banking". The word "Bank" is said to be of Germanic origin, cognate with the French word "Banque" and the Italian word "Banca", both meaning "bench". It is surmised that the word would have drawn its meaning from the practice of the Jewish money-changers of Lombardy, a district in North Italy, who in the middle ages used to do their business sitting on a bench in the market place. Again, the etymological origin of the word gains further relevance from the derivation of the word "Bankrupt" from the French word "Banque route" and the Italian word "Banca-rotta" meaning "Broken bench" due probably to the then prevalent practice of breaking the bench of the…show more content…
Significance of Banks The importance of a bank to modern economy, so as to enable them to develop, can be stated as follow: (i) The banks collect the savings of those people who can save and allocate them to those who need it. These savings would have remained idle due to ignorance of the people and due to the fact that they were in scattered and oddly small quantities. But banks collect them and divide them in the portions as required by the different investors. (ii) Banks preserve the financial resources of the country and it is expected of them that they allocate them appropriately in the suitable and desirable manner. (iii) They make available the means for sending funds from one place to another and do this in cheap, safe and convenient manner. (iv) Banks arrange for payments by changes, order or bearer, crossed and uncrossed, which is the easiest and most convenient, besides they also care for making such payments as safe as possible. (v) Banks also help their customers, in the task of preserving their precious possessions intact and safe. (vi) To advance money, the basis of modern industry and economy and essential for financing the developmental process, is governed by banks. (vii) It makes the monetary system elastic. Such
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