Banking’s Beginnings
With its first appearance as far back as 2000 BCE 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 BCE, 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 BCE), India’s Maurya Dynasty (321–185 BCE), China’s Qin Dynasty (221–206 BCE), 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.
The Code of Hammurabi laid the foundation for not only many financial laws today but in fact all laws in general.