Question

meaning of credit creation in simple words ( pls no copied answers)​

Answer 1

$\bf \huge \underline {\underline{ANSWER}}$

A bank keeps a certain part of its deposits as a minimum reserve to meet the demands of its depositors and lends out the remaining to earn income. The loan is credited to the account of the borrower. Every bank loan creates an equivalent deposit in the bank. Therefore, credit creation means expansion of bank deposits.