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Why commercial bank are considered producer …

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Why commercial bank are considered producer of money when unlike government and RBI besides issue of notes and coins in the indian economy
  • 1 answers

Varnika Maurya 7 years, 3 months ago

commercial banks are considered as the producers of money because the money which we deposit with banks called DD is multiplied by the system of multiplier in which banks maintain a reserve % with them as instructed by RBI and the rest is part i.e excess money is lended in the form of credit and this process mutiplies money and that's how money is produced by banks
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