Business and trade are regarded as the oldest professions individuals adopted centuries ago in order to earn their livelihood. At that time, the trading used to be in form of exchanging goods which is also known as barter system but later on due to introduction of currencies in different countries the concept of barter system was taken over by the current system which is being followed till today that involves money or the paper money in selling of the goods. Due to introduction of currency notes, trade between countries expanded as it became easier and convenient to carry out business transactions (Lukeman, 2008, p. 118)
With currencies being introduced by every single trading nation for the purpose of strengthening their economic structure and to promote trade, the need for banks or financial institutions was realized and that was the point from where the banks or the financial institutions began to take shape. Initially banks acted as single purpose entity for assisting people in depositing their money but later on they began acting as loan providers for people who needed money for different purposes (Neill, 2007, p. 10).
Today, the banking systems are the back bone of the economy of any country as they hold all the monetary/financial reserves of a country. Countries in order to keep their economies strong and GDP higher tend to keep their reserves in a higher volume where as countries that are often under developed have poor economic situation due to lack of sufficient funds in their banking reserves.
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