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  • A bank has to perform functions such as receipt of money, lending of money, collection and payment of bills, etc.
  • Lending and borrowing functions of banks result in credit creation in the economy.
  • Credit creation helps in improving money circulation without resorting to any increase or decrease in the quality of currency or legal tender money.
  • In order to have social control on banks, banks were nationalised in 1969 and 1980.

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