GROUP ASSIGNMENT - MASENO UNIVERSITY SCHOOL OF BUSINESS AND...

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MASENO UNIVERSITY SCHOOL OF BUSINESS AND ECONOMICS. CITY CAMPUS GROUP 2 ASSIGNMENT: MEMBERS: BE/00133/013 ………………………………. MUTHOMI REGAN GUANTAI BE/03038/013……………………………….. KARANJA N BRIAN BE/00118/013………………………………. MUCHERU MARKADNREWS M. BE/00110/013………………………………. MAINA LILIAN WANJIRU BE/00135/013……………………………………...GAKII GLORY MBITI BE/00134/013……………………………………..KELVIN MUTEMBEI BE/00123/013……………………………………..KENNEDY NDOGO BE/03058/013…………………………………….CHESONI EUGENE CHISAINA UNIT: ………………………………………………………………..FINANCIAL ECONOMICS UNIT CODE: ………………………………………………………AEC 303 LECTURER: ………………………………………………………..MR. WANYAMA TASK:………………………………………………………………..TAKE AWAY ASSIGNMENT DATE: ………………………………………………………………..3 RD MARCH 2016
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Briefly explain the history commercial of banking Modern commercial banking can be traced back to 600BC. According to G. Crowther, in his famous book “An Outline of Money,” the present day bank has three ancestors. 1. The Merchants 2. The Goldsmiths 3. The Money lenders 1. The Merchants The merchants were traders in commodities. Trading activities were carried out from one place to another. With time, it became too risky for the traders to carry metallic money with them for payment. The traders with high reputation started to issue receipts which were accepted as titles of money. The merchant banking therefore forms the earliest stage in the evolution of modern banking. 2. The Goldsmiths The second stage of banking is normally traced to the earlier goldsmiths. In the 15 th and 16 th centuries, goldsmiths started accepting deposits of individuals for safe custody because they had safe lockers at that time. The first banking function therefore was accepting deposits of cash for individuals who wanted to keep money and other valuables safe. The goldsmiths began to issue hand written receipts for metallic money (gold and silver) kept with them. After some time, the customers of goldsmiths started issuing letters against those receipts to goldsmiths to make payments to other persons from their deposits. These receipts with time became payable to the bearer on demand. This was the first use of cheques. Similarly, the merchants were playing an important role in the development of banking system because they were making the transactions at different places on the basis of receipts issued by goldsmiths. With the passage of time, banking activities expanded and the businessmen became full time bankers.
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