Role of Gramin Bank in the Development of Agriculture Sector

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BANK

The word “bank” is derived from the word “Bancus or Banque” that is bench. Jews, who were considered to be the early bankers, transacted their business on benches in the market. As early as 2000 BC Babylonians had developed a system of banks. In ancient Greece and Rome the practice of granting credit was widely prevalent/traces of credit by compensation and by transfer orders are found is Assyria, Phoenicia and Egypt before the system attained full development in Greece and Rome. The books of the old Sanskrit lawgiver, Manu are full of regulation governing credit. He speaks of judicial proceedings in which credit instruments were called for, interest of loans on bankers and even of the renewal of commercial papers.

In Rome, the bankers were called Argentarii, Mensarii or Caooybistoe, the banks were called Tebernoe aregentarioe. Some of the banks carried business on their own account and others were appointed by the government to receive the taxes. They used to transact their business on similar lines as those of the modern bankers. People used to settle their accounts with their creditors by giving a cheque or draft on the bank. If the creditors had also an account at the same bank, the account was settled by an order to make the transfer of such money from one name to another. To pay money by a draft was known as prescribere and rescribere and the draft was known as atributio. These bankers also received deposits and lent money. Loan banks were also common in Rome. From these loan banks the poor citizens received loans without paying interest. They lent money for a period of three or four years on the security of land.

During the early periods, although the banking business was mostly done by private individuals, many countries established public banks either for the purpose of facilitating commerce or to serve the government. The bank of Venice, established in 1157, is supposed to be the most ancient bank. Originally, it was not a bank in the modern sense, being simply an office for the transfer of the public debt.

History shows the existence of a ‘Monte’ in Florence in 1336. The meaning of ‘Monte’ is given in the Italian dictionary, 1959, as “Monte – a standing bank or mount of money, as they have in diverse cities of Italy”. Bangrigge, an English writer, speaks about the three ‘bankers of Venice’ meaning the three public loans or Monti.

As early as 1349, the drapers of Barcelona carried on the business of banking. There it was subject to official regulation. The drapers were not allowed to commence this business until they had sufficient security. During 1401, a public bank was established in Barcelona. It used to exchange money, receive deposits and discount bills of exchange, both for the citizens and for the foreigners. During 1407, the bank of Genoa was established. The bank of Amsterdam was established in 1609 to meet the needs of the merchant of the city. It accepted all kinds of specie on deposits. These deposits could be withdrawn on demand or transferred from the account of one person to another. The bank also adopted a plan by which a depositor received a kind of certificate entitling him to withdraw his deposit within six months. These written orders, in course of time, came to be used in the same manner as the modern cheques. It is interesting to note that most of the European banks now in existence were formed on the model of the bank of Amsterdam.

English banking may correctly be attributed to the London gold smiths. They received their customer’s valuables and funds for safe custody and issued receipts. These notes, in course of time, became payable to bearer of demand and hence enjoyed considerable circulation. However in the course of time, goldsmiths were ruined. This led to the growth of private banking and establishment of “Banking of England” in 1694.

In India, banking existed even during Vedic period. The book of Manu contains references regarding deposits, pledges, policy...
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