Banking Development

Contents: 1. Introduction to Banking. 2. Banking Capital. 3. Banking Legislation. 4. Central Banking. 5. Credit Creation. 6. Methods of Credit Control. 7. Reserve Bank of India. 8. Credit Bank of India. 9. Commercial Bank in India.

The evolution of banking can be traced back to the era when the use of metallic coins as the media of exchange of goods and services began. Storage of metallic coins was a serious problem for the common people. Because of the danger of theft and robbery, people started leaving gold and silver and metallic coins in the custody of some reputed person a wealthy merchant or a moneychanger. The custodian had a strong box (safe) and other means of safekeeping. He offered this service as a favor for his friends or made a charge for it. The depositor had to go personally to the custodian for the withdrawal of his money. But this practice was found to be inconvenient. Gradually, the depositors were allowed to transfer claims against the metallic coins. The custodian used to issue a receipt to the depositor which said in effect T owe you (IOU) so many pounds and the depositor could transfer the receipt to the payee. When these lOUs became popular in payments, the bank note was born. A bank note is simply a bank debt or promise to pay, evidenced by a piece of paper.