Following are the limitations of credit creation by banks :
1. Level of development of banks : The countries in which the level of development of banking services is not adequate, credit-creation facility is also limited there.
2. The attitude of public : The banking habit of people also has a direct impact on capacity of credit creation.
3. Monetary policy of central bank : Liberal monetary policy encourages credit creation in a country.
4. Level of development in business and industry : Those countries which have attained higher level of industrial development, the banking transactions in these countries are higher, and thus, they have high creation capacity.
