Question

explain using a numerical example how an increase in reserve deposit ratio affect the credit creation power of the banking system

Answer 1

Answer:

In the society there are two types of people one use us debit system other one uses credit system. So we need to cater both in raising fund of banking system. During the finicial crisis man adopts credit system to sustain .

. Even new venture people depend on credit system to grow. Banker need to think in case they fail to pay the credit how to fullfill it. It comes in debt management system. I worked for six years in this system.