In the history of banking all over the world The Bank of Scotland holds an iconic place because it is the second oldest bank that has survived till date. It was established in the year 1695. It is based in Edinburgh, Scotland.
Two of the most mentionable features of The Bank of Scotland is the it is the only commercial institution created by the Parliament of Scotland and also it is the first bank to start printing its own banknotes. The Bank of Scotland is a subsidiary of Lloyds Banking Group. Initially the Bank of Scotland was established to aid the Scottish business community. It was not allowed to lend to government without the approval of the parliament.
The Bank of Scotland was the first bank in Europe to issue bank notes. Other banks were allowed to issues notes after 1716 when the Bank of Scotland monopoly was lapsing. In the second half of the 20th century The Bank of Scotland underwent many acquisitions and mergers. The Bank of Scotland diversified its services by entering into consumer credit with the purchase of North West Securities. It also merged with the Union Bank of Scotland. It also established a merchant banking division.
Pioneer in many things already, it was the first bank in United Kingdom to install computer for processing accounts centrally.
The Bank of Scotland started expanded its business internationally after moving into financing the energy sector after the arrival of the North Sea Oil to Scotland. The first international office of the Bank of Scotland was in Houston, Texas. It then moved onto United States, Moscow, Singapore, Australia and New Zealand. It acquired Countrywide Bank and Bank of Western Australia in New Zealand and Australia Respectively.
The Bank of Scotland met real competition when The Royal Bank of Scotland came into the market. The real competition was on the issuance of banknotes. The Royal Bank of Scotland devised a policy to either drive the Bank of Scotland out of business or to acquire. Since it could not succeed in acquiring it, it tried to outrun it by over issuing its own bank notes. The Bank of Scotland suffered a great deal because of this and it had to ask for loans to pay for these notes. The reputation of the Bank of Scotland suffered a lot. But fortunately it recovered without giving in to the royal Bank of Scotland in the year 1729 and started lending again. It was in the year 1751 that both banks started accepting each other’s notes.
The Bank of Scotland was the only bank operating in English. But in the year 1972 it issued its first Gaelic cheque book. Since that day the Bank of Scotland is operating in both English and Gaelic.
The Bank of Scotland issued its one series of bank notes in 1995. They were known as Tercentenary Series because they were issued in the year of the three hundredth anniversary of the foundation of the bank. On the front of each denomination features Sir Walter Scott o, and on the back are representations of industries that Scotland excels in as follows:
£5 note has a vignette of oil and energy
£10 note has a vignette of distilling and brewing
£20 note has a vignette of education and research
£50 note has a vignette of arts and culture
£100 note has a vignette of leisure and tourism
These notes have been replaced gradually with the 2007 series. The major difference of the new notes from the old ones is that it has larger text than before.
The Bank of Scotland has survived and flourished a great deal over the centuries.
