Suppose A deposits
10000 tk in his account. From the amount by keeping 10% as liquid, bank gives
9000 loan to B. From the B's 9000, 10% are being kept as liquid and the rest
are given to C as loan. Again by keeping 10% as liquidity bank gives 7290 tk to
D. Bank creates many loan and deposit from this 10000 tk. Only from 10000 tk.
loan is given 3 times total of 24390 and 2710 tk is preserved as liquid.
DDM=1/r;
r=reserve ratio
|
Liabilities
|
Taka
|
Assets
|
Taka
|
|
Deposits
A-10,000
B-9,000
C-8,100
|
27,100
|
Cash 10%
1000+900+810
Gives loan
B-9000, C-8100, D-7290
|
2,710
24,390
|
|
Total
|
27,100
|
Total
|
27,100
|
