Search just our sites by using our customised search engine
Unique Cottages | Electric Scotland's Classified Directory

Click here to get a Printer Friendly PageSmiley

History of Banking in Scotland
Chapter XXIII - The Institute of Bankers in Scotland

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 Chartered Institute of Bankers in Scotland for providing a wee summary of their history to date...

The Chartered Institute of Bankers in Scotland

Concern for 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.

After the 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 university degree.

The new 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.

Membership of 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 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 fellow men.”

In 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.

The First 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.

The excitement 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.

Despite the 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.

In 2000, 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.

Today, the Institute is globally regarded as a provider of world class professional qualifications to the banking and financial sector.

Return to Book Index Page


This comment system requires you to be logged in through either a Disqus account or an account you already have with Google, Twitter, Facebook or Yahoo. In the event you don't have an account with any of these companies then you can create an account with Disqus. All comments are moderated so they won't display until the moderator has approved your comment.

comments powered by Disqus