Following closely on the developments of bygone ages

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When analyzing the problems faced by the modern banking industry, it is better to get into some of the developments in the bygone centuries. To a certain degree the Venetian merchants fell into the habit of placing their money within the Chamber, for safe keeping. From this one approach the business of deposit was introduced and it is the second branch of modern banking. It was later found that a credit for money deposited in the chamber was equivalent to the cash in hand. Such a custom or approach was introduced for effecting payments through the transfer of these credits from the account of the payer to the account of the receiver.

Thus, every merchant was obliged to open an account with the bank. All the payments of bills of exchange in wholesale transitions were required to be made there, and in the manner described above. This method of payment was plainly a rude approach towards the invention of bank notes. The circulation of these bank notes constituted the third and the last branch of the banking business. This is much evident in a modern bank. That part of circulation involving bank cheques is only a very slight modification of this Venetian practice. The Bank of Venice long remained without a rival, but by the beginning of the 15th century, similar institutions, were established at Genoa and Barcelona. They were cities that were the pride of Europe in those times. They were only second to Venice when considering the extent of trade and commerce.

The ‘table of exchange’ at Barcelona and the Chamber of St. George at Genoa is an almost exact copy of the Bank of Venice, and soon it obtained an almost equal status in credit and celebrity. The bank of Barcelona was established in 1401 and the Bank of Genoa in the year 1407. As the center of commerce got shifted to the north, the Bank of Amsterdam was established in 1609. Banks working on the same principle as that of the Bank of Amsterdam was established afterwards at Hamburg and some other parts of the commercial towns and free cities in Germany. These developments very much resemble the small beginnings of LoanMax of rod aycox fame and its subsequent phenomenal rise within a short span of time.