How Banks Actually Create Money in India | Ex-SEBI Official Explains

In this Zerodha Varsity bootcamp session, Ananth Narayan, former Whole Time Member at SEBI, starts from first principles: what money is and who creates it. Using the combined balance sheet of India's banking system and the Reserve Bank of Inida, he shows why loans create deposits and not the other way around as everyone believes, how government spending and forex flows add or drain money, and why banks can be flush with liquidity yet short of deposits. He discussed how suppressed interest rates and high taxation on fixed income pushed household savings into equities, how stretched valuations drove away FPI and FDI, and how a narrow rupee–dollar rate differential made hedging and speculating against the rupee cheap. __________________________________________________________________________________________ Over 2 crore Indians invest with Zerodha. Open a free demat account in minutes and invest in stocks, mutual funds, ETFs, and bonds at 0 brokerage. No hidden charges, no gimmicks. Pl