With a CRR of 20 per cent and an initial deposit of Rs 100, how much can the bank lend in the first round?

1. CRR is the share of deposits held back as cash. 2. Required reserve = 20 per cent of Rs 100 = Rs 20. 3. Lendable amount = 100 - 20 = **Rs 80**. 4. Rs 20 is the reserve itself, not the loan, and Rs 100 ignores the reserve requirement altogether. _Source: syllabus Introductory Macroeconomics, Ch 3 "Money and Banking", section 3.3.2 Limits to Credit Creation and Money Multiplier_