Economy, asked by aryanishpujani13, 3 months ago

discuss briefly the credit creation process of the banking system using hypothetical example

Answers

Answered by Aʙʜɪɪ69

4

Explanation:

Say, if LRR is 20%, the banks will keep 20% of deposits as reserves and will lend remaining 80% i.e. Rs. 800. Those who borrow will spend this money and same 800 will come back to banks in form of deposits. This raises the total deposits to Rs.

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