Page 71 - DCOM208_BANKING_THEORY_AND_PRACTICE

Banking Theory and Practice

Notes 7. Explain the process of credit creation.
8. What are the limitations of credit creation?
9. What is credit multiplier formula?
10. What is the important aspect of the credit creating function of the commercial banks?

Answers: Self Assessment

1. Economy 2. Primary

3. Central 4. Transaction
5. Commercial 6. Credit
7. Derivative Deposits 8. Reserves

9. Credit 10. Withdrawal
11. Lubricates 12. Securities
13. direct 14. Commercial; Central
15. lowers

4.7 Further Readings

Books Hajols. T. N (2009), “Money and Banking”, Gopaljee Enterprises.

Muraleedharan, D (2009), “Modern Banking: Theory and Practice”, PHI Learning
Pvt. Ltd.
Rajesh, R, Sivagnanansithi, T (2009), “Banking Theory: Law and Practice”, Tata
McGraw Hill Publishing Company Ltd.
Shekhar, K C (2009), “Banking Theory and Practice”, Vikas Publishing House
Pvt. Ltd.

Online links http://www.preservearticles.com/201012281863/credit-creation.html
http://www.indiastudychannel.com/resources/108889-Credit-Creation-
Limitations-Bank.aspx
http://www.indiastudychannel.com/resources/108889-Credit-Creation-
Limitations-Bank.aspx
http://www.preservearticles.com/2012033129435/10-main-limitations-on-
credit-creation.html

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