Do you consider a commercial bank creator of money in the economy - Economics - Money and Banking

Question

Do you consider a commercial bank ‘creator of money’
in the economy’?

Bhawna Madaan · Accepted Answer

Commercial banks play the important role of ‘money
creator’ in the economy They have the capacity to generate
credit through demand deposits These demand deposits make credit
more than the initial deposits
The process of money creation can be explained by taking an
example of a bank XYZ A depositor deposits Rs 10,000 in his savings
account, which will become the demand deposit of the bank Based on
the assumption that not all customers will turn up at the same day
to withdraw their deposits, bank maintains a minimum cash reserve
of 10 % of the demand deposits, i e Rs 1000 It lends the remaining
amount of Rs 9000 in the form of credit to other customers This
further creates deposits for the bank XYZ With the cash reserve of
Rs 1000, the credit creation is worth Rs 10,000 So, the credit
multiplier is given by:
Credit multiplier = 1/CRR = 1/10% = 10
The money supply in the economy will increase by the amount
(times) of credit multiplier

Do you consider a commercial bank ‘creator of money’ in the economy’?