History of banking (I)

Only those who were old enough to go to a banking hall in the ‘60s, ‘70s, and even in the ‘80s, would truly understand the radical revolution that has occurred in the banking sector over the years. Banking halls in the ‘70s to early ‘90s were characterized by afro-donning somberly dressed bankers with massive neckties and calculators in their pockets. Office gadgets back then ranged from noisy typewriters to adding machines and Tippex to overwrite type-written errors. Customers were expected to arrive early for cash deposits, withdrawals or to request for bank drafts. Tally numbers were distributed, and customers were always overawed by the imposing attitude of thick-lensed “cashiers”.

Fast forward to the turn of the millennium and the face of modern-day banking has undergone incredible changes within the space of a decade. Modern banking halls are usually quiet, with few customers being attended to within seconds or a few minutes. Bank employees are now celebrity-like snazzily dressed fashion kings and queens. Computers have replaced the noisy typewriters and adding machines. Highly secure Server rooms now transmit terabytes of data within microseconds and customer service has greatly been enhanced. Dealing rooms are also much quieter these days as traders quietly go about their transactions using web-based platforms spread across multiple computer screens that require just a click to buy or sell; borrow or lend money.  Indeed, the world of banking has been one of the largest beneficiaries of Ai or the technology revolution.

The history of banking can be traced back to the first prototype banks which were the merchants of the world. They made grain loans to farmers and traders who carried goods between cities. This was around 2000 BC in Assyria, India and Sumeria. Later, in ancient Greece and during the Roman Empire, lenders based in temples made loans, while accepting deposits and performing the change of money.

Bringing the chronology closer home, Africa has also been a beneficiary of banking services for centuries even though it is quite unclear which is the oldest bank in Africa and if that bank still exists today.

The first bank to be established in South Africa, the Lombaard Bank in Cape Town, is one of the oldest banks in Africa. The bank opened its doors for business on 23 April 1793. The earliest proposals for the establishment of a central bank in South Africa were made as far back as 1879 – calls that were repeated for the following few years, until a select committee, consisting of the ten members of Parliament was established on 31 March 1920 to examine the practicalities of establishing a central bank. Following on the recommendations of the committee, the South African Reserve Bank opened for business on 30 June 1921, making it the oldest central bank in Africa. The first banknotes were issued to the public by the Bank on 19 April 1922.

In North Africa, Tunisia’s oldest bank, Banque de Tunisie, was created in 1884 with its headquarters located in Tunis. National Bank of Egypt (NBE) is the oldest and largest bank in Egypt established in 1898.

In Francophone West Africa, Banque d’Afrique Occidentale, also known as BAO was established by French colonial authorities in 1901 in Dakar, Senegal as the central bank of the colonies of French West Africa. BAO was originally created by the expansion of the Banque du Sénégal (itself created by the French on 21 December 1853). BAO later expanded to include French Equitorial Africa to administer the common currency of French West Africa. Although it was a private investment bank, the French government authorized it to print currency, and its board always included colonial officials. Following independence, the BAO was re-chartered as the central bank for the francophone countries of West Africa. On 22 November 1962, the bank was renamed the Banque des Etats de l’Afrique Centrale (BEAC) and the CFA Franc was renamed the Franc de la Coopération Financière en Afrique Centrale (The CFA franc).