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प्रश्न
What is meant by credit creation?
What is credit (or money) creation?
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उत्तर
Credit creation refers to the creation of demand deposits by banks in process of making loans. It signifies that power of commercial banks by which they create secondary deposits on the basis of primary deposits.
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संबंधित प्रश्न
Explain the credit creation role of commercial banks with the help of a numerical example.
Answer the following question.
Explain, using a numerical example, how a reduction in reserve deposit ratio, affects the credit creation power of the banking system.
______ is the rate of interest charged by the central bank on loans given to the commercial bank.
The process of money creation or credit creation is done by ______.
Read the given extract carefully and answer the following questions.
| Mr. X wanted to buy an expensive motorcycle for his son but he did not have sufficient money to buy it. He approached a public sector commercial bank for the loan. The bank asked Mr. X to deposit 20% cash of the loan amount and rest 80% of the loan amount was given by the bank. |
- Briefly explain a Commercial Bank.
- What is the regulation of consumer credit in selective credit control?
- Name the bank which controls all the commercial banks and financial institutions in the country.
Identify which of the following Statement is true?
Deposits made by the people from their own resources are called ______.
If legal reserve ratio is 20%, the value of money multiplier would be ______.
To ensure that the citizens of the country have faith in the currency, the currency is issued by:
"Loans create deposits" means banks grant loans by ______.
