IT will be proper, at
this point, to devote some consideration to the establishment of an
institution which has exercised an important influence on the banking
world of Scotland during the quarter of a century of its existence, and
which, if prudently conducted, is calculated to materially benefit
future generations of bank officers, and to elevate banking to a
position partaking somewhat of the nature of a scientific profession.
Up to the time of the
formation of the Institute of Bankers in Scotland, the education of
bankers in the theory and practice of their profession—nay, even the
ascertainment of their most ordinary educational acquirements—was of the
most haphazard description. Not the smallest attempt was made either to
encourage, or to provide means for, the study of the theory of banking.
It may be thought that the practice, at all events, would be learnt in
the discharge of daily duties; and to some extent this was necessarily
the case. But no effort was made to induce young bankers to acquire any
but a mechanical knowledge of details; and from the thorough way in
which their interests were neglected by their superiors, there was
instilled into their minds a conviction of the uselessness of efforts at
self-improvement. Their directors and managers virtually—sometimes
actually—told them that they need not hope for promotion. The more
active-minded of the young men, who would think and study in spite of
all discouragements, were either snubbed or left to cool their ardour in
the shade of neglect.
It was the practical
experience of this state of matters which led the present author to
write an article, which appeared in the Money Mar/ et Review of 2nd May
1874, advocating a more systematic consideration of the interests of
young bankers, as at once advisable from motives of justice and of
policy. Among other suggestions it was proposed that a system of
examinations should be established, in connection with which
certificates would be issued to the more proficient candidates. It is
highly probable that these suggestions would not have produced any
practical result, had not the idea been taken up by a gentleman
possessing the influence and energy necessary for conducting it to a
successful issue. To Mr. John Gifford, late cashier of the National Bank
of Scotland, belongs the credit of inaugurating and effectively
conducting the desired reformation. Mr. Gifford addressed a letter to a
literary society of bankers, of which he had at one time been president,
urging them to consider the advisableness of establishing a system of
classes, courses of lectures, and examinations, and the provision of
libraries, bursaries, and all necessary accessories for the acquirement
of financial and general knowledge. The society took the matter up
warmly, and referred it to a committee to consider and report as to the
feasibility of such a scheme. In the capacity of secretary to that
committee, it devolved on the present writer to lay some practical
scheme before the members. He accordingly proposed that the society
should not attempt to undertake such responsible duties, but should
promote the institution of a new association, which would be
representative of the profession as a whole, in all its grades,
throughout the country, and therefore, commanding an amount of authority
and influence sufficient to give confidence in its diplomas, and to
secure general interest in its proceedings.
On this basis a scheme
was drafted, which secured the approval of the society. It provided for
the formation of a provisional committee, partly appointed by the banks
and partly by the society. After some untoward hesitation on the part of
some of the banks, which required all Mr. Gifford's tact and good
management to overcome, that committee was eventually constituted. The
practical designing of the edifice was a laborious work; but the members
of the committee were earnest for its completion, and spared no effort
to secure its accomplishment. Mr. Hamilton A. Hotson, now manager of the
British Linen Company Bank, undertook the duty of preparing the
constitution of the new association (whose name was until almost the
last moment a matter of uncertainty) ; and it speaks well for his
foresight and discretion that, with the modifications made by the
committee, twenty-seven years' experience has only produced a single
alteration on it, and that not an admitted improvement.
The movement, which at
first was confined to Edinburgh, received a great accession of vitality
when Mr. James A. Wenley, then manager of the Bank of Scotland in
Glasgow, began to identify himself with it. He organised a Committee in
Glasgow, in correspondence with that in Edinburgh, and was the means of
creating and directing a widespread enthusiasm in the `Vest of Scotland
in favour of the scheme. But it was not alone in the West that his
influence was felt. To a very great extent the scope and action of the
Institute were thenceforth moulded by him. No important step was taken
in the movement which was not either suggested by him, or first received
his approval. He threw himself into the work with an amount of ardour
and personal exertion which must have occasioned him much
self-sacrifice, but which at the same time enabled the new vessel to be
launched with much eclat. He was also instrumental in procuring from the
banks promises of recognition and material support.
A meeting of those
gentlemen who had formally intimated their adhesion to the proposed
association was held in the Bank of Scotland, Edinburgh, on the evening
of the 6th July 1875, when the Institute of Bankers in Scotland was
constituted, with a membership of about 200. Mr. David Davidson, at that
time treasurer of the Bank of Scotland, who had warmly espoused the
cause, was elected president. Three vice-presidents, among whom Mr.
Gifford naturally found a place, and other office-bearers, were elected
at the same time. The Council, consisting in all of twenty-one members,
embraced representatives from all the banks in Edinburgh and Glasgow.
Nearly all of these held official position in the banks, so that the
Institute at once secured an influential position.
In spite of the numerous
difficulties which invariably beset new schemes, the success of the
Institute was both rapid and marked. The membership, beginning, as we
have said, with 200, was reported to the first annual meeting as 582.
Two years later (1878) it stood at 925. Owing in great measure to the
untoward effects of the crisis of that year, involving the failure of
the City of Glasgow Bank, which itself contributed 107 names, the roll
subsequently dropped to 759. The last report states the number as 1219.
That number is in itself satisfactory proof of the continued interest of
the profession in the proceedings of the Institute. For it must be borne
in mind that, since 1878, it has become almost impossible to gain
admission except through examination. The examinations have been
attended with much success, more than 450 candidates presenting
themselves annually. The chief centres of the Institute's operations
have from the first been at Edinburgh and Glasgow, but more recently,
through the influence of the managers of the North of Scotland, Town and
County and Caledonian Banks, centres have also been established at
several of the large towns. Besides the annual examinations, there have
been regular courses of lectures on banking, financial and literary
subjects, political economy, banking law, etc. The other operations of
the Institute have included annual essay competitions, and the
establishment of libraries and reading- rooms for the use of all members
of the profession.
It cannot be doubted that
the Institute has been instrumental in fostering, to a large extent, the
spirit of self-improvement among the younger members of the banking
profession; and, in a less degree, it has tended to advance the
scientific study of banking and economic subjects. It has also been the
means of enabling energetic young bankers to obtain lucrative situations
in English and Colonial banks, by the use of its examination
certificates. That it has not accomplished more is hardly its fault. It
is often said that it does not improve young men's chances of promotion
in their own banks; and it must be admitted that, while the banks have
acted handsomely in regard to pecuniary aid, they have not given the
still more desirable assistance of recognising its certificates in a
practical manner. Too little allowance, however, is made for the great
difficulties in the way of an immediate adoption of such action. Old
officers cannot be overlooked in favour of young ones, however brilliant
their qualifications; and, besides, the mere possession of certificates
of knowledge does not prove suitability for office.
Although the Institute of
Bankers in Scotland was the first association of its kind which was
successfully established, an important attempt of a somewhat similar
nature had been made previously. Half a century ago, the late Mr. W. H.
Logan, banker, Berwick-on-Tweed, previously and subsequently resident in
Edinburgh, projected an Incorporation of Bankers, which seems actually
to have been formed, so far as the enrolment of members is concerned,
although it never came into active existence. The preliminary meeting
was held at the London Tavern (a well-known meeting-place, subsequently
purchased by the Royal Bank of Scotland), on 22nd October 1851, when
about 300 gentlemen connected with banking attended. A proposal
submitted to form a Banking Institute was approved of, and a committee
or "Council" appointed. But, for some unexplained reason, the project
seems to have been dropped. The scheme was revived by a correspondence
in the Bankers' Magazine during 1870; but, although Mr. Logan again gave
a detailed account of its objects, it was not proceeded with. On the
establishment of the Institute in Scotland, the idea was warmly taken up
in Ireland; but the state of that country prevented a successful issue.
The bankers of London were more fortunate in efforts which they made in
the same direction, and the well-known Institute of Bankers was founded
under influential auspices. Their Journal has rendered excellent service
to the profession, both in the way of giving information to young
bankers and in ventilating questions of interest; and their examinations
and other operations must have been productive of good results, similar
to those accomplished in Scotland.
Our thanks to the
Institute of Bankers in Scotland
for providing a wee summary of their history to date...
Institute of Bankers in Scotland
the lack of facilities for training young bankers prompted the Scottish
Bankers’ Literary Association and delegates from the banks to establish
The Institute of Bankers in Scotland in July 1875.
The purpose of
the Insitute was to “improve the qualifications of those engaged in
banking and to improve their status and influence”. It was funded by
donations from the banks and subscriptions from members.
inaugural meeting in Edinburgh, some 178 members and 195 Associates were
enrolled by the provisional committee, largely from Edinburgh and
Glasgow. Future members were to have passed the examinations or to be
appointed by virtue of their official positions in the banks.
Associates were required to have ten years’ service, or to have a
Insitute took premises in Edinburgh and Glasgow, established libraries
and intitiated programmes of lectures and examinations. In other parts
of Scotland, local tutoring was conducted by branch agents and school
teachers. The first secretary was Andrew W Kerr from the Royal Bank.
Local centres were set up in Aberdeen, Dundee, Greenock, Inverness,
Perth, Dumfries and Galashiels. Later additions included London,
Lerwick, Kirkwall, Stirling and Wick.
the Institue grew steadilty. However, lack of interest in Institute
qualifications limited its influence, even though from 1890 the banks
made payments to staff passing examinations. It seems that an older
generation which never passed examinations did not encourage young
people to study.
This was an
argument that has had to be repeated many times. Kerr, as Secretary,
was often asked “What is in it for me?” by young bankers who expected
promotion to follow automatically from examination success. His reply
was characteristic, “You cannot secure promotion, you can only endeavour
to deserve it. This satisfaction....you can always have, that whether
or not your studies bring you material rewards, they will always tend
towards self-improvement, and heighten you in the estimation of your
Edinburgh,the Institute occupied various premises and eventually settled
in 62 George Street where it remained until 1974. These premises
provided offices, a library, council room and recreation room. A
magazine, The Scottish Bankers’ Magazine, was launched in 1909.
World War saw women coming into banking for the first time and, when it
became clear they would be a permanent feature, the Institute allowed
them to become members and to sit examinations.
By the 1930s
the banks made it obligatory for staff to passs the Institute’s
Associates examinations, greatly enhancing the influence which the
Institute was able to exert. Various prize funds had been established
over the years and an educational trust was established in 1942. During
the Second World War, the Institute even made arrangements for its
members in prisoners of war camps to sit examinations. After the war,
the altered banking environment prompted a restructuring of the
examination syllabus, the publication of a series of banking handbooks
and the re-invention of the local centres. The Institute was granted a
coat of arms in 1955, but The Royal Charter had to wait until after the
Institute’s centenary in 1975.
of the centenary, which gave birth to the World Conference of Banking
Institutes, and new premises in Rutland Square, soon gave way to a
period of general decline. Change began in 1987 when Council decided
that the Institute should be modernised. There was a complete revision
of education programmes, delivery systems and administration. The
Institute participated in a wide range of national and international
developments in banking and business education.
recession of the mid-1990s, the Institute continued to innovate and a
range of new qualifications was devised which restored it to a stable
financial footing. Then it began to plan how it might better serve its
members. The Continuing Professional Development programme was one
answer to this quest.
approval was received from the Privy Council to confer Chartered Banker
status upon qualified members who participate in the Institute’s
Continuing Professional Development programme. This was seen as a major
step forward for the Institute and its members who qualify to use the
title. The Chartered Institute of Bankers in Scotland is the only
Institute allowed to confer this unique designation.
Institute is globally regarded as a provider of world class professional
qualifications to the banking and financial sector.