1. ORIGIN,
HISTORYAND
TYPES OF
BANKING
SYSTEM

2. SUBMITTED BY:
Talha Ali
Tehseen Javaid
Muhammad Ali
Saif Ali

3. Introduction
 Banks have been around since the first
currency was formed
 In the early days of ancient empires, temples
were considered to be the safest place to
keep valuable commodities.

4. Origin
 The word ‘bank’ is used in the sense of a
commercial bank.
 . It is of Germanic origin though some persons
trace its origin to the French word ‘Banqui’
and the Italian word ‘Banca’ (Long Bench)

5. The First Bank
 The Romans, great builders and
administrators of that time, took banking out
of the temples.
 The first bank called the ‘Bank of Venice’ was
established in Venice, Italy in 1157 to finance
the monarch in his wars.

6. Evolution of Bank

7. The Goldsmith
 He had to take special precautions against
theft of gold and jewellery.
 The goldsmith started charging something for
taking care of the money and valuables.
 The goldsmith receipt became like cheques
as a medium of exchange and a means of
payment.

8. The Moneylenders
 Goldsmith started advancing the coins on
loan by charging interest.
 He became a banker who started performing
the two functions of modern banking, that of
accepting deposits and advancing loans.

9. The Establishment of Banking
System

10.  The modern banking system started in Venice
in 1587, and in the same year the “Banco di
Rialto” was established.
 People could deposit even their gold and
silver items in this bank for which the bank
issued receipts. These receipts were used as
currency notes.

11. Cont.
 The first bank in the U.S.A. was set up in
Philadelphia in the year 1782.
 In England, the first bank was started in the year
1825.
 Nowadays, Banks serve many other purposes such
as giving credit cards and foreign currency to people
going abroad.
 Banks also provide us the facility of lockers to keep
our valuable jewellery.

12. Modern Banking System

13.  When a bank makes loan, it does not take other
people’s deposits and lend them out.
 When a bank makes a ‘loan’ it simply types in to its
account that the borrower owes it a sum of money –
this is the bank’s asset.
 On the process of depositing money in the bank,
lending it, getting interest on the deposited money,
the whole banking system works.

14. Channels of Banking System

15. INTERNET BANKING
 It is also called as Net Banking, E-banking,
Online Banking, Virtual Banking
 . It offers fastest and cheapest mode of
banking where customer uses internet facility

16. CORE BANKING
 Commonly known as fully computerized
banking.
 All the branches of a bank are linked to a core
computer so that the data is accessible
anywhere anytime
 Computers are linked to a core computer,
called Server.

17. MOBILE PHONE BANKING
 As per recent RBI guidelines, there is no
financial limit for transactions in a day.
 It refers to doing actual banking transactions
through mobile phone

18. IMMEDIATE PAYMENTS SERVICES –
IMPS
 Developed by National Payment Corporation
of India (NPCI)
 It offers an instant, 24×7 services to facilitate
use of cell phones as a channel
 For accessing bank accounts and execute
interbank fund transfers

19. TELE BANKING
 It refers to telephone based banking.
 In contrast to mobile banking, no transactions
are allowed in Tele-banking.
 it is call centre based banking.

20. Automated Teller Machine (ATM)
 ATMs facilitate cash withdrawal from one’s
account – any time – anywhere.
 Such as fee-deposit, online payment of bills,
mobile recharge, and fund transfers.
 Confidential PIN (Personal Identification
Number) to activate the ATM.

21. DEBIT / CREDIT CARDS
 Also referred to as Plastic Money.
 A debit card is linked to a specific bank
account and can be used to operate only that
account.
 The credit card holder gets a monthly bill for
the transactions .

22. VISA / MASTER CARD
 These are two international card service
providers (Global Payment Gateways).
 All transactions put through various debit /
credit cards are coordinated and serviced by
these two companies.

23. Types of Banks

24. Saving banks
 A savings bank is a financial
institution whose primary purpose is
accepting saving deposits and paying interest
on those deposits.
 These banks were often designed to
encourage low income people to save money
and have access to banking services.

25. History
 Savings bank said to have been established
in 1765 in the town of Brumath.
 But the savings bank idea was suggested in
England as early as 1697.
 There was a savings bank in Hamburg,
Germany, in 1778.

26. Direct banks:
 is a bank without any branch network that
offers its services remotely via online
banking and telephone banking.
 Direct bank also provide access
via ATMs, mail and mobile.

27. History
 One of the world's first fully functional direct
banks was First Direct, which launched
telephone banking in the United Kingdom on
1 October 1989.
 The commercialization of the Internet in the
early 1990s was the biggest driver in the
creation of full direct banking models.

28. Private banks
 Private banks became known as ‘Private’ to
stand out from the retail banking & savings
banks aimed at the new middle class.
 They often advised and performed all financial
& banking services for families.

29. History
 The first banks in Venice were focused on
managing personal finance for wealthy
families.
 Private banks have a long tradition in the UK
where C. Hoare & Co. has been in business
since 1672.

30. Commercial Banks:
 A commercial bank is a type of financial
institution that provides services such as
accepting deposits, making business loans,
and offering basic investment products.
 Commercial banks are established with an
objective to help businessmen.

31. History
 The Commercial Bank was founded in 1924
by local businessmen in Oglethorpe country
with the mission of serving the financial needs
of the citizens and businesses of the area.

32. Community bank:
 A community bank is a depository institution
that is typically locally owned and operated.
 Community banks tend to focus on the needs
of the businesses and families where the
bank holds branches and offices.

33. History
 August 18, 1945, Huntington Park Bank
opened its doors.
 In 1950, Huntington Park Bank changed its
name to Community, and to underscore the
Bank’s commitment to the communities it
served.

34. Online banks
 Online Banks operate entirely online – there
are no physical branch locations available to
visit with a teller or personal banker.

35. History
 Online banking was first introduced in the
early 1980s in New York, United States.
 Almost simultaneously with the United States,
online banking arrived in the United Kingdom.
 The UK's first home online banking services
known as Homelink was set up by Bank of
Scotland for customers

36. Mutual banks
 A mutual savings bank is a financial
institution chartered by a central or regional
government, without capital stock, that is
owned by its members who subscribe to a
common fund.

37. History
 The Reverend Henry Duncan in 1810, in
Ruthwell, Scotland. Rev. Duncan established
the small bank in order to encourage his
working class.
 The banks were started by philanthropists,
who took on the positions of savings bank
trustees, managers, and directors.

38. Central banks
 Central banks manage the monetary system
for a government.
 For example, the Federal Reserve Bank is the
US central bank responsible for managing
economic activity and supervising banks.

39. History
 The first institution recognized as a central
bank, the Swedish Riksbank. Established in
1668 as a joint stock bank.
 A few decades later (1694), the most famous
central bank of the era, the Bank of England,
was founded also as a joint stock company to
purchase government debt.

40. Ethical banks:
 An ethical bank, also known as
a social, alternative, civic, or sustainable
bank, is a bank concerned with the social and
environmental impacts of its investments and
loans.

41. History
 The cooperative movement and the new
social movements from the 1960’s have
developed a practice of ethical banking.

42. Investment banks:
 Investment banks help businesses work in
financial markets.
 If a business wants to go public or sell debt to
investors, they’ll often use an investment
bank.

43. History
 The term ‘investment bank’ came into
common usage in the late 19th – early 20th
centuries, particularly in the United States.

44. Retail Banks:
 Retail banks are probably the banks you’re
most familiar with: Your checking and savings
accounts are held at a retail bank, which
focuses on consumers.
 These banks give you credit cards, offer
loans, and they’re the ones with numerous
branch locations in populated areas.

45. History
 In the 18th century several initiatives were
taken to carry out this task.
 In 1810, Ruthwell Savings Bank was
established in Scotland by the Rev. Henry
Duncan.

46. Thank you

47. Any Questions ?