• Dr. Nazibul Islam
• PRINCIPLES & PRACTICES
• FACULTY OF BUSINESS STUDIES
• UNIVERSITY OF DHAKA
• A nation's money supply consists of
bank deposits ownership of which can
be transferred by means of cheques,
debit cards or other forms of money
transfer. Deposit money and currency
are money in the sense that both are
acceptable as a means of payment.
HISTORY OF MONEY &
• Currency evolved from
two basic innovations,
both of which had
occurred by 2000 BC.
Originally money was
a form of receipt,
stored in temple
granaries in Sumer in
then Ancient Egypt.
• Early currency
• Paper money
• Bank Note
• Plastic money
EVOLUTION OF BANKING
• ANCIENT WORLD (3000 BC)
• Temple banks in Egypt, Babylon, Greed valuables for safe keeping. The
valuables consisted of grains, agricultural implements and cattle.
• At later stage precious metals, gold and silver featured as deposits.
• Ancient India developed its own banking system. Manu framed
regulations on commercial transactions.
• The temple priests of Babylon provided loans to merchants.
• Hammurabi, the great, framed laws for banking operations. Around this
time, Greek temples conducted financial transactions such as loans,
deposits, currency exchange, and issued credit notes payable in
• Ancient Romans made regulations concerning financial practices. They
paid interest on deposits and charged interest on loans.
• Advent on Christianity and the taboo on interest brought an end to
perpetuation of banking.
• Around 1100 AD
• The banking system revived in Western Europe to finance the crusades. They
also found a way to circumvent the religious taboo on interest.
• 1100 AD ONWARDS
• Settlement of debts and payments took place in trade fairs held regularly at
various locations in Europe.
• MEDIEVAL ITALY
• ITALY pioneered banking in Europe. The word bank comes from banco means
• 1157 AD Bank of Venice established which is supposed to be the most ancient
• 1349 AD
• Cloth merchants of Barcelona set up banks.
• 1609 AD
• The Bank of Amsterdam was established in Netherlands.
• In 1600 AD Goldsmiths pioneered banking business in England. The notes they
issued against deposits of gold is considered as the precursor of modern day
• 1694 AD
• Bank of England, the first central bank. It sets the stage of modern banking.
BANKS OF THE
• NATIONAL BANK OF
• MAHALAXMI BANK
• CENTRAL BANK OF
• COMILLA BANKING
• DINAJPUR BANK
• BENGAL CENTRAL
• NEW STANDARD BANK
• IMPERIAL BANK OF
• IONEER BANK LTD
• COMILLA UNIOUN
• UNITED INDUSTRIAL
• BHARAT BANK
• UNITED COMMERCIAL
• HINDU BANK
TRIPURA MODERN BANK
BANK OF COMMERCE
SOUTHERN BANK LTD
CALCUTTA COMMERCIAL BANK
CALCUTTA NATIONAL BANK
Formal Financial sectors of
• MICO FINANCE
GROWTH OF BANKS IN
• Pre liberation
commercial & DFIs
• Bangladesh bank
established to over
the operation of the
state bank of
• Reversion of Pubali
bank & Uttara bank
to private sector, first
finance company –
IFIC Ltd established.
• Second batch of
private sector banks
• Third generation of
Function of Commercial banks
• Accept deposits with or without interest –
current, savings, fixed deposits and others
• • Collects cheques bills etc.
• • Lends money- Long term & Short term.
• • Handles foreign exchange transactions.
• • Arrange transfer of funds.
• • Issue guarantee, indemnity bond.
• •Maintain safe deposit box.
• • Perform agency functions.
Role of Banks in the Economic
Development of a Country
• 1. Banks promote capital formation
• 2. Investment in new enterprises.
• 3. Promotion of trade and industry
• 4. Development of agriculture
• 5. Balanced development of
• 6. Influencing economic activity
• 7. Implementation of Monetary
• 8. Monetization of the economy
• 9. Export promotion cells
• 10. Virtual Banking
• Bangladesh Shilpa Bank (BSB)
• Bangladesh Shilpa Rin sangstha
• Bangladesh Krishi Bank
• Rajshahi Krishi Unnayan Bank
• Investment corporation of Bangladesh
• BASIC BANK Ltd
• House Building Finance Corporation
• Ansar VDP Unnayan Bank
• Karma Sangsthan Bank
M-Banking and M-Payments Systems in the
• The terms m-banking, m-payments,
m-transfers, m-payments, and m-
finance refer collectively to a set of
applications that enable people to use
their mobile telephones to manipulate
their bank accounts, store value in an
account linked to their handsets,
transfer funds, m-banking or even
access credit or insurance products.
Negative effects of economic
• •Resource depletion
• •Environmental impact
• •Equitable growth
• Implications of global warming
• Banks were the earliest credit
institutions extending loans (credit) to
customers. It was their job to
transform short-term liquid deposits
into long-term illiquid financial assets
that can fund long gestation activities
and enhance economic growth.