As we might think, it was not a commercial enterprise which introduced the system of formal cheques but a quasi religious organization called knights templar. To give you a bit of background, Jerusalem, which is a top religious center for Jews, Christians and Muslims alike, came under Muslim rule. Christian authorities then ‘liberated’ Jerusalem from the Muslims in what is now known as First crusade.
After that a new Christian Military Organization known as Knights Templar was formed to ensure the safety of the large numbers of European pilgrims who flowed toward Jerusalem after its conquest.The Order in 1150 began generating letters of credit for pilgrims journeying to the Holy Land: pilgrims deposited their valuables with a local Templar center before embarking, received an encrypted document indicating the value of their deposit, then used that document upon arrival in the Holy Land to retrieve their funds. This innovative arrangement may have been the first formal chequing system; it both improved the safety of pilgrims by making them less attractive targets for thieves, and further contributed to the Templar coffers.
References:
http://en.wikipedia.org/wiki/Knights_Templar
http://home.gwi.net/ages/Main%20Body/History/Templar%20Origins.html
http://en.wikipedia.org/wiki/First_Crusade
Ramneek Maan Singh
