Introduction to the Thai Bank Museum The Evolution of Money The Evolution of Banking The Prototype for Thai banks Siam Commercial Bank’s Advance to the present
How Banking Began
The inauguration of banking in Thailand
The Father of Thai Banks

It is believed that the English word “Bank” derived from the Italian word “Banco” (long bench), because Jewish bankers sat them while providing currency exchange and loan services, normally in populous areas like markets or preaching halls. “Bank” may also trace its origins to the German word “Banch” meaning “a pile” , the word Germans used to represent a kind of public debt. Regardless of how the word originated, banks have been important financial institutions linking the economies of the world. Historically, banks functioned to provide deposit, loan, and currency exchange services. With time, these banking services became increasingly important to a nation’s economic advancement.

There is firm evidence that around 3,900 B.C., Egypt adopted a banking service utilizing cows as units of exchange. Deposited cows were assigned a value and exchanged for goods of equal value. Near Babylon, in modern-day Iraq, services to secure valuables and extend business loans were also emerging. At the Semitic red monastery of Uruk (thought to be the derivation of “Iraq”), one of the world’s oldest cities, the priests leased land to farmers. The monastery also held a vast quantity of valuables donated by the faithful. The monastery earned extra income by lending these items to borrowers and charging rental fees.

Later, they offered pawning services, paying farmers cash for their grain and cattle. As Uruk prospered, traders began depositing their valuables with the monasteries. They were issued clay tablets coloured with sienna as proof of deposit; with them, they could withdraw items at monastery branches. In addition to the monasteries, wealthy people offered banking services.

Babylon’s banking sector was ultimately impacted by its many wars and the empire’s subsequent decline, but around 400 B.C., the increasingly-prosperous cities of Athens and Rome established their own banks.

Once more, monasteries were the key players with priests, both male and female, acting as “bankers”. They accepted deposits of cash and valuables against loans which were extended to people affected by disorders or wars. The “bankers” also provided currency exchange, loans, and bills of exchange equivalent to the amounts deposited. These bills were debts payable and were accepted for use in other cities. Under strict government supervision, banking grew, attracting investors from the private and public sectors throughout the realm. As the Roman empire began to disintegrate, trade and banking declined.

In the Middle Ages (4th – 14th centuries), the void created by the collapse of the Roman Empire led to war and chaos in Europe. Powerful groups with wealth and vast land holdings built castles and defended them with private armies.

Ironically, these conditions were conducive to the development of trade and banking. The Crusades required heavy expenditures by regional rulers, who sent knights and soldiers to do battle in the Holy Land, and spent vast sums to arm and supply them. This precipitated the initiation of lending services, since cash was needed to ransom captured soldiers, and to pay delivery costs for seized valuables.

With a growing demand for its services, banking experienced a revival. Parishioners increased their donations of money and valuables to the Church of Rome, enhancing the wealth of Italy’s private banks. Renowned institutions like the Bank of Venice, established in 1157, offered to pay government debts incurred when they borrowed money from citizens. Eschewing cheques and promissory notes, the Bank employed a system of recorded transfer lists in the accounts.

In 1857, it began to take in deposits. Other famed banks of this era—the Bank of Barcelona (founded in 1400), the Bank of Genoa (founded in 1407) and the Bank of Amsterdam (founded in 1609)—expanded rapidly, offering such services as deposits, transfer of the bank’s inter-accounts, and payment upon the account holders’ request. The extensive services they offered to traders turned these cities into commercial centres.

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