Explain the credit creation of central bank of india
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banks creates money based on cash deposits .They issue new money through its loan operation and creates credits.Therefore , this process of credit creation leads depositors to believe that they have money with the bank
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A commercial bank is a dealer of credit. It creates money based on cash deposits. Further, it issues new money through its loan operations and creates credit or expands the monetary base of a country. Therefore, this process of credit creation leads depositors to believe that they have money with the bank.
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