All the money that we see in the economy is either injected by the Reserve Bank of India (RBI) or created by banks. While the commonly understood role of banks as taking deposits from savers and then lending to borrowers is correct, it gives a mistaken view of the sequencing of deposits and loans. The moment a bank gives a loan to a borrower, the latter gets new deposits in her account, and money in the economy goes up. This is how total money, also called broad money, in the economy becomes more than five times the amount of money injected by the RBI, which is referred to