- Wealth PMS
The Big Mo Corner by Mohit Satyanand.
Every time a bank extends a loan, it creates money. This is the magic of modern banking, based on fractional reserves. The process bears repetition:
Bank A has deposits of Rs. 1 lakh, and is approached by an entrepreneur for a loan of Rs. 90,000. Since the bank deems a 10% reserve adequate, it makes the loan. The entrepreneur deposits the . . .