If the reserve ratio is 10% and the initial deposit with the commercial banks are ₹ 450 cr, the total money creation by the banking system will be :

₹ 4,500 Cr

Rs 4500 Crore

The total money creation by the banking system can be calculated using the money multiplier formula:

Money Multiplier = 1/CRR

MM=1/10%

MM=10

$\text{Total Money Creation}=\text{Money Multiplier}\times \text{Initial Deposit}$

                                  =450*10

                                  =Rs 4,500 Cr