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Role of Bank in Our Civilization

Banks play a crucial role in the development of economies and civilizations. They lend money to businesses and individuals, fueling prosperity. Throughout history, banks have evolved from temples storing valuables to modern financial institutions. Today, banks help people achieve goals like education and retirement by providing loans and guidance. However, some argue life would be better without banks and the inequality they create by charging high interest rates. Overall, banks have significantly impacted quality of life in both positive and negative ways.

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Anila Mehboob
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54 views

Role of Bank in Our Civilization

Banks play a crucial role in the development of economies and civilizations. They lend money to businesses and individuals, fueling prosperity. Throughout history, banks have evolved from temples storing valuables to modern financial institutions. Today, banks help people achieve goals like education and retirement by providing loans and guidance. However, some argue life would be better without banks and the inequality they create by charging high interest rates. Overall, banks have significantly impacted quality of life in both positive and negative ways.

Uploaded by

Anila Mehboob
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Role of Bank in our Civilization

This is the era of banking and Finance.Banks play an important role in development of civil
society and economy of the country.Banks not only deposits money but also lend money to
businesses and individuals and this makes a prosperous country.Therefore banks has a crucial
role in the economy of our civilization.

Bank term is derived from the italian word Banco which means desk or bench.this word was
used in Roman ancient empire,where moneylenders used to make transactions over a desk.

Banking History:
The banks were established in the religious temples of the ancient world during the third
millennium BC. The development of banking spread from Italy throughout the Roman Empire.
The banks deposits consist was grains and other goods including cattles and precious metal such
as gold in the form of compressed plates.Temples and palaces were the safest places to store the
gold as they were well built.In early civilizations a temple is considered the safest refuge; it is a
solid building, constantly attended, with a sacred character which itself may deter thieves.

In Greece Banking activities are more prominent than in any previous society. Individuals, as
well as temples and public bodies, now undertake financial transactions. They take deposits,
make loans, change money from one currency to another.

They also involved in money transactions. Moneylenders can be found who will accept payment
in one Greek city and arrange for credit in another.The Romans, great builders and
administrators, took banking out of the temples and formalized it within distinct buildings. They
adopts and regularizes the banking practices of Greece.The first bank was established in Venice
with guarantee from the State in 1157.

With the collapse of the Roman Empire trade and banks temporarily vanished. However banking
began to revive again in the 12th and 13th centuries in the Italian towns of Florence and Genoa.
The original banks were "merchant banks" that Italian grain merchants invented in the Middle
Ages.The first bank to begin the permanent issue of banknotes was the Bank of England in 1695.
Bank’s importance on our Financial well being
Banks can be good partners to us and can improve our financial well-being. And by taking care
of people wellbeing offers many opportunities to banks.

Banks can go a long way toward making customers feel as if the bank cares about their financial
success. For example, when a customer visit the bank and asking for buying a home, bank
employees could offer services that can help her meet that goal, such as setting up automatic
withdrawals into a savings account to save for a down payment or discussing with mortgage plan
according to his or her needs.

Banks helps society achieve its goals


Banking’s original role was in serving the society . The goals of people may be of households,
small businesses, corporations, civic institutions, governments, and of society itself. such as
payment for a college education, a couple’s comfortable retirement, the opening of a restaurant,
the People involved need the right banking loans, and often expert guidance, to help achieve the
goal.

If bank does not exist,life would be better:


Some People think that life would be much better if Banks don't exist.There are several
disadvantages of banking system as well.Wealthy individuals and organizations would extract
additional resources from the rest of society by providing quasi-banking services at a high price
and not to everyone.Wealthy bank owners are providing "quasi-banking" (i.e. fractional reserve
banking) at high prices (any interest rate for is too high) and banks don't loan to everyone. So
you're saying the same situation would exists as today. Actually, most of the truly wealthy today
garnered their money from the fraudulent fractional reserve banking system, the engine of wealth
concentration. Life would be more better, with wealth spread over a greater portion of the
population.
Before banks got into lending, People can borrow money from family, friends and you have to
pay no interest rate on it.So life can be better without banks.

How much bank earn money?There is Social justice or not:


Banks earn money by deposits people savings and then lend them to others at higher interest
rate.To encourage people to keep their money in a bank, the bank will pay them a small amount
of money (interest).Another way banks make money is through charging fees. Most commercial
banks will charge for specific services, for example, for processing cheque.Investment banks
charge high fee for advising companies on issuing bonds and shares.In these ways bank earn
huge amount of money.

Social justice is a concept of fair and just relations between the individual and society.But we
can see there is no social justice in bank’s earnings.Banks pay a small rate of interest while
borrow money from people but earn high rate of interest when lending money.The poorest
people who had taken out loans against their homes, found it hard to pay them back.If they
cannot repay their loans bank will take their houses and sold them.This is very injustice to them.

Impact of bank to quality of life:


Banks certainly have changed our quality of life.Although banking system has some
disadvantages but advantages are more.Banks play a role in capital formation.They can provide
loan to unemployed youth to start their business and also support small industries by giving them
low interest rate loans.
Few things have impacted our quality of life like the ability to own our own homes and
nowadays it would be possible by bank loans.Without banks you cannot trade between different
currencies and also in different countries.So it must be concluded that Banks play a major role in
enhancement of quality of life.
References:

1.The Evolution Of Banking Retrieve from https://www.investopedia.com/articles/07/banking.as

2. History of Banking Retrieve from


http://www.historyworld.net/wrldhis/PlainTextHistories.asp?historyid

3.Five things Banks do for You that really important retrieved from
https://www.getrichslowly.org/what-banks-do-for-you-that-is-really-important/

4. Customers Want Banks to Improve Their Financial Well-Being Retrieve from


https://news.gallup.com/businessjournal/183419/customers-banks-improve-financial.aspx

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