1700-1740 | RBS Heritage Hub

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1700-1740

Founding charter of The Royal Bank of Scotland, 1727

Founding charter of The Royal Bank of Scotland, 1727

Founding charter of The Royal Bank of Scotland, 1727

The terms of the 1707 Union between England and Scotland included compensation to be paid to Scots for the money they had lost in the Darien disaster of the 1690s. A company was formed to manage the payments, and it soon found that it had spare money to invest. Its directors had the idea of starting a bank, and petitioned the king for his approval. In 1727 a royal charter was granted, establishing the Royal Bank of Scotland.

Scotland already had one bank – Bank of Scotland – but the trading monopoly it had been granted at foundation had lapsed, creating an opportunity for the new bank’s promoters. The situation was very different in England, where the Bank of England’s monopoly held firm. This meant that other banking businesses were only allowed to be small local partnerships; they could not become the kind of large shareholder-owned enterprise that might increase competition in the sector. This was the beginning of England and Scotland developing very different banking systems from each other. 

Read on: 1740-1780


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