Banking and Financial Institution

Subject: Banking & Financial Institutions

__________________________________________________________________________________________

BANK and BANKING PERSPECTIVE

What is BANK?

---> It is an institution w/c deals primarily in the receipt of deposits and the loaning out of funds.

But in Philippine context, the meaning of bank is emphasized in Section 3 of the New General Banking Law, to wit:

"BANKS SHALL REFER TO ENTITIES ENGAGED IN THE LENDING OF FUNDS IN THE FORM OF DEPOSITS"

With the above definition, it is clear that the creation of DEPOSITS impkies the other FUNCTIONS--- that LOANING OUT OF FUNDS.

HISTORICAL PERSPECTIVE WORLDWIDE

**development of banking system/practices started at the temples of BABYLON,2000BC

**evidence of credit transactions in clay tablets found in ruins

**4th century BC,temples,public bodies,and private firms were dealing in receipt of deposits and loaning of funds

**2nd century AD,clearing houses/champagne fairs did purchases on record with no money on hand made settlements

**8th century BC,versions of drafts and checks were in wide use in Assyria

**Venetian bankers that goes on credit originated the use of overdraft

**the greatest moneylenders of the 16th century were the FUGGER FAMILY

Banking started to develop esp. Europe

- Bank of Barcelona in 1401/ Bank of Venice 1587/ Bank of Amsterdam/ Bank of England in 1694/ Bank of France organized by Napolen Bonaparte in 1800/

Bank of Canada in 1835/ Bank of North America in 1781

**birth of John Law's financial system almost ruin france,for favoring royalty and the government

Today, the BANK seems to shy off its humble beginnings for many-a-splendored function has been added to its then main functions of RECEIVING DEPOSITS and LENDING our FUNDS. The preponderance(greater power of influence) of the commercial bank has not, however, lost its luster and its avowed place in the history of banking.

PHILIPPINE BANKING HISTORY

As the banking business...