Traditional Banking Practice

Rodney Wilson
Additional contact information
Rodney Wilson: University of Durham

Chapter 1 in Banking and Finance in the Arab Middle East, 1983, pp 1-18 from Palgrave Macmillan

Abstract: Abstract The financial system of the Middle East dates back long before the advent of modern banking, which has only had a presence in the region for just over a century. As soon as a barter economy gives way to a monetary system, in which some type of specie is used for transactions purposes, a need for financial institutions inevitably arises. Several reasons can be advanced for this need. Firstly, unless all payments and receipts take place instantaneously, some individuals and businesses will end up with holdings of cash, precious metals, or whatever other monetary instruments are used for transactions purposes. These holdings can of course be hoarded, but this involves a security risk, and a cost if protective measures are taken to minimise the risk. However, if centralised deposit facilities are provided, the need for hoarding is reduced, as well as the costs involved. Most societies find it is more convenient, and cheaper, to have such facilities, and the individuals who historically specialised in this task were the moneylenders or the moneychangers.1

Keywords: Saudi Arabia; Middle East; Precious Metal; Commercial Bank; Conventional Bank (search for similar items in EconPapers)
Date: 1983
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-04817-5_1

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349048175

DOI: 10.1007/978-1-349-04817-5_1

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().