In ancient Egypt’s banking system (Ancient Egyptian Bankers), deposits were not of money but of cattle, grain or other crops and eventually precious metals.

Nevertheless, some of the basic concepts underlying today’s banking system were present in these ancient arrangements, however. A wide range of deposits was accepted, loans were made, and borrowers paid interest to lenders.

Until the Late Period, gold and silver were used almost exclusively for the needs of the pharaohs, dead or alive. Much of the buried treasure came onto the market during the end of the New Kingdom, when graves were robbed of anything that would find a buyer.

Banks were receivers and distributors of state funds. They collected taxes and made payments on the order of the royal scribe or other officials.

They were also bureaux of exchange but loans at interest were by way of private initiative and by private contract.

These arrangements stemmed from the requirement that grain harvests be stored in centralized state warehouses. Depositors could use written orders for the withdrawal of a certain quantity of grain as a means of payment. This system worked so well that it continued to exist even after private banks dealing in coinage and precious metals were established.

Banks, however, were not promoted as savings institutions: As Garnsey, Hopkins and Whittaker note in Trade in the Ancient Economy, there was no “moral reinforcement” for productive investment or profit maximization in ancient societies.

“There was no heavenly salvation promised to the puritanical saver,” the authors wrote. “Instead, high status involved competitive and ostentatious expenditure.”

Interest Egyptian Bankers

The concept of interest was still unknown in the New Kingdom. During the reign of Ramses III, a worker named Menna had sold the policeman Mentmose a pot of fat. The policeman promised prompt payment, but eleven years later the debt was still outstanding.

The idea of paying interest on deposits is apparently much younger. The grain banks, instead of paying interest on a deposit, deducted annually 10% of the total amount, which represented the grain lost through natural wastage.