What Do Banks Really Do — Store Your Money or Create New Money? The Truth About Modern Banking

Most people think banks are giant vaults that safely hold deposits and lend them out. The Bank of England said otherwise in 2014: commercial banks create money out of thin air every time they approve a loan. Your 1,000 taka deposit is not sitting in a vault — it has already been lent out many times over. This article unpacks the seven real functions of a bank, explains how fractional reserve banking and the money multiplier work, examines why banks cannot create unlimited money, and gives you a clear snapshot of Bangladesh's banking sector — so you can be a smarter, more informed customer.