Responsible Banking: Shaping the Future
Banks are financial institutions. In a way, it is a bartering system. Collect money from you, give interest, lend it to people who need it, and collect interest (including your operating cost). It is bartering. Instead of people doing it directly and exchanging goods, it is done through an intermediary, the bank. The barter system in ancient India dates back to the Vedic period. The Indus Valley Civilization is known for practising a barter system. Recognising the vitality of the banking system, the UN adopted a resolution designating 4 December as the “International Day of Banks”. The oldest bank in India is the State Bank of India. There are ~ 10,153 commercial banks globally, and ~10 million people are in the global banking industry. And in India, it is ~1.5 million people. Well-run national development banks can help countries develop financing options for Sustainable Development Goal-related investments. Financing policies do not work in isolation.
Globalisation and technological change have contributed to reducing extreme poverty at the global level, but uneven distribution of the benefits has left many behind and has undermined support for global architecture.
António Guterres, UN Secretary-General
In recognition of the banking system’s vital role in improving the standard of living and its potential to finance sustainable development in 2019, the UN General Assembly adopted a resolution designating 4 December as the “International Day of Banks”.
‘Bank’ is derived from the Italian word ‘table’. Benches and tables called ‘banc’ in German and ‘banca’ in Italian were used as exchange counters by the early Italian bankers. They soon came to refer to the transaction itself. Banks contribute to the financial health of the country, and knowing about their role is essential. National and multilateral development banks are crucial in financing areas where commercial banks may not engage. These banks also promote financial inclusion and ensure access to credit for small and underserved enterprises.
The banking concept began with the simple implementation of credit in the barter system using collateral. During the Renaissance, Italian families set up institutions that became the basis of modern-day banking. Banca Monte dei Paschi di Siena was established in 1472 as a mount of piety in Italy. The Oldest Existing Retail Bank was re-established in its modern form as an Italian bank that still exists today. The Bank of England was the first to introduce permanent issue banknotes, evolving from the promissory notes payable on demand.
The oldest known barter system dates back to around 6000 BC, with the tribe of Mesopotamis introducing it. The barter system in ancient India dates back to the Vedic period. During this time, people exchanged goods and services directly without using money. The Indus Valley Civilization (~3000 BCE) is known for practising a barter system. The barter system played a crucial role in the early economic activities of ancient Indian societies.
Banking System in India:
It is Quite a Diverse and Extensive Banking System.
The oldest bank in India is the State Bank of India. It originated as the Bank of Calcutta (1806), was renamed the Bank of Bengal (1809), and became the State Bank of India in 1955. As of May 2024, there are 137 banks in India. Â
Banking Network in the World:
It is Quite a Vast Network.
As of 2024, there are approximately 10,153 commercial banks globally. America has the most banks worldwide in terms of the number of institutions and branches. While nearly every country has some form of banking system, a few countries, like Monaco and Marshal Islands, are without a central bank. However, they have financial institutions and banking services available. Â
Bankers: They are a Significant Workforce.
Bankers are the people who work for a bank. As of 2024, approximately 10 million people are in the global banking industry. ~1.5 million people are employed in the banking sector in India. Â
Becoming a Banker
Most banking roles require a bachelor’s degree in Finance, Economics, Accounting and Business Administration. A master’s degree will be beneficial for reaching higher-level positions. Additional certifications like Chartered Financial Analyst (CFA) or Certified Public Accountant (CPA) can enhance your qualifications and career prospects. There are skills development courses that are also valuable.
The International Day of Banks is closely linked to several key Sustainable Development Goals (SDGs). SDG 8: Decent Work and Economic Growth, SDG 9 (Industry, Innovation, and Infrastructure), SDG 10 (Reduced Inequalities)and SDG 17 (Partnerships for the Goals – Strengthening global partnerships, including financial institutions.
The global economy is facing heightened risks and financial volatility. While providing new remedies, the rapid pace of technological change also exacerbates global systemic risks. Well-run national development banks can help countries develop financing options for Sustainable Development Goal-related investments. Financing policies do not work in isolation.
Toons: Advika
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