What is a credit creation?

Creation of credit is one of the most outstanding functions of a modern bank. A bank has sometimes been called a factory for the manufacture of credit. read more

Creation of credit is one of the most important function of a commercial banks. Banks take deposits from the customers and provides loans from their deposits after keeping necessary reserves like cash reserves etc. read more

Creation of credit is one of the most outstanding functions of a modern bank. A bank has sometimes been called a factory for the manufacture of credit. Let us see what we mean by credit creation, how it is created by the bank and, finally, whether the power of the banks to create credit is unlimited or it is subject to certain limitations. read more

Credit Creation is a situation in which banks make more loans to consumers and businesses, with the result that the amount of money in circulation (being passed from one person to another) increases. In other words it refers to the unique power of the banks to multiply loans and advances, and hence deposits. read more