Scriptural money is held by a bank in electronic or other non-cash forms. This term is used to differentiate between money stored as numbers on paper or a digital system and actual banknotes and coins.
Cash and scriptural money together make up the total supply of money.
This non-cash bank money primarily functions to facilitate the daily flow of transactions between bank accounts. But scriptural money is also the basis of all non-cash transactions, such as those made using debit and credit cards.
Scriptural money is partially created through cash deposits made into bank accounts.
But these funds are also created when lending institutions and merchant banks lend money. Through personal loans, business loans and mortgages, banks generate additional non-cash funds which add to their demand deposits.