Have there been military banks in the past?

Overseas and at home, there have been successful military Credit Unions (CUs) or Banks. Unlike banks with customers, CUs have members who share a ‘common bond’. CUs take many years to develop and are subject to different 'banking' regulations, freedoms and restrictions.

One of the biggest military CUs is the US Automobile Association www.usaa.com. It has been going for some 90 years and started, and remained until recently, as an insurance company. Now, it has nearly 10m members and employs 25,000 people.

In 1922, 25 Army officers met in San Antonio, Texas, and decided to insure each other's vehicles, their tiny organization has become a fully integrated financial services organization in America.

CUs can be successful especially when existing banking infrastructure doesn’t support its members. Here, Credit Unions are much smaller and grow slowly due to different regulation and an effective national retail banking system. They serve those who have difficulty opening a Basic Bank Account (a government led high street banking initiative), have a particular credit need or profile and those who already have a high street bank account and/or are prepared to sacrifice some financial services for the ‘common bond'. For example, the NHS Credit Union has 11,500 customers, is 16 years old but has 1.7m potential 'common bond' members. It provides loans and savings - it doesn’t provide current account facilities. http://www.nhscreditunion.com/content.asp?section=...

In banking, two historical UK military banks are of particular note, namely; Holts and Cox’s & Kings. These banks started life as Army agents who kept the accounts of army regiments, distributing pay and subsistence, dealing in supplies of clothing, claims for pensions and injury, and providing a general banking business for soldiers and their families.

Holt’s. This army agency was established by William Kirkland, agent to the First Regiment of Foot, in Bennett Street, St James's, London, in about 1809. Links were also forged with the Navy, through the 1915 acquisition of naval agents Woodhead & Co, and the Royal Air Force, through the offer of part of the newly-formed Service's pay agency to Holt & Co in 1918. In 1939, Glyn, Mills & Co was acquired by The Royal Bank of Scotland, and its subsidiary Holt & Co continued to trade as a separate business until the 1960s. In 1970, however, following the introduction of the military salary, the Army and Royal Air Force pay agencies were not renewed.[1] Holts is now an RBS branch. 

Cox’s & King’s. The army agency of Cox’s & King’s dates back to 1758. In that year Lord Ligonier, Colonel of the 1st Foot Guards, appointed his secretary, Richard Cox, as regimental agent. The firm did not just issue pay and manage officers’ bank accounts: It could arrange to insure the officer’s kit; deal with his tax returns; and ensure that his tailor was paid regularly. Like many others the bank was in trouble by 1923, and Lloyds Bank was persuaded to step in and take over the firm[2].

[1] Abridged from http://heritagearchives.rbs.com/companies/list/hol...

[2] From http://www.lloydsbankinggroup.com/Our-Group/our-he...