Bank­ing’s Be­gin­nings

Asian Geographic - - Money Feature - 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.

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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