Think of a situation in which you have no place other than your home to keep your valuables like money, jewellery etc. It’s tough!
But there was indeed such a time in history when people did not have many safety options. It was at this time, sometime around the 3rd century BC, that temples in Mesopotamia started accepting precious things from people for safe keeping.
Since these temples were already wealthy, they could also give loans to the needy. It is believed that the first steps of banking began here.
History notes that there were ‘grain banks’ in Egypt to store and loan grains, which were as important as currencies. Under the rule of the Ptolemies, government granaries formed a network of grain banks to help people. They also had a central bank in Alexandria to keep a record of transactions. This acted as the first governmental bank in the country.
Later, during the Middle Ages, trade and businesses started flourishing, and people earned more. It was then in Italy that moneylenders began to set up stalls called ‘bancas’. The idea was to accept coins and exchange currency.
In 17th century London, banking began when people deposited currencies and gold with goldsmiths. This was because the goldsmiths already had safes and locks, so they thought their valuables would be secure there. Slowly these goldsmiths started moving from town to town to transfer money. Later, they came to be known as goldsmith bankers.