Asian Geographic

Banking’s Beginnings

- ag

The Code of Hammurabi laid the foundation for not only many financial laws today but in fact all laws in general.

With its first appearance as far back as 2000 BC in ancient Mesopotami­a, banking has come a long way, becoming one of the most vital aspects of life today.

During Assyrian and Babylonian rule some 4,000 years ago, the first signs of banking were observed in temples and royal palaces that provided secure spaces for the storage of grain and other commoditie­s of that time. Soon, the use of receipts was implemente­d to serve as proof of the grains or other goods being transferre­d to the bank and later on, to third parties as well. Not long after, the temples and palaces began giving out loans with interest (as high as 20 to 30 percent), further cementing another layer of what we now recognise as banking.

Three hundred years later, in 1700 BC, banking had become so structured and establishe­d in ancient Mesopotami­a that it warranted laws governing banking operations to be written in the Code of Hammurabi, one of the oldest deciphered writings of significan­t length in the world. For example, there was one law that enforced the use of receipts.

Law 122:

If a man wishes to give silver (or) gold or anything whatsoever to a man for safe custody, he shall show anything whatsoever that he gives to witnesses, he shall draw up a contract and (thus) give (them) for safe custody.

Implementi­ng laws (not just for trade and commerce) that displayed substantia­l considerat­ion of the circumstan­ces of ownership, the Code of Hammurabi laid the foundation for not only many financial laws today but in fact all laws in general. The demand for trial by judge before any conviction that we practise today is but one example.

While individual forms of banking would also emerge in other civilisati­ons such as Egypt’s Ptolemaic Dynasty (332–30 BC), India’s Maurya Dynasty (321–185 BC), China’s Qin Dynasty (221–206 BC) as well as ancient Greece and ancient Rome, the earliest occurrence, by far, still belongs to Mesopotami­a.

Today, while many might not appreciate the long historical roots of banking, its far-reaching integratio­n into our lives speaks of its necessity as a system and a service.

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25,000 Iraqi dinars – featuring the portrait of King Hammurabi, best known for writing the first code of law in human history. Hammurabi also founded the First Dynasty of Babylon in 1700BC
LEFT 25,000 Iraqi dinars – featuring the portrait of King Hammurabi, best known for writing the first code of law in human history. Hammurabi also founded the First Dynasty of Babylon in 1700BC

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