Cash leakage is a phenomenon in which customers withdraw deposits from banks and require cash, causing cash as reserves to flow out of the commercial banking system. After customers receive income, they will always withdraw some funds from the bank and hold them in cash, causing this part of the funds to flow out of the banking system. This is called cash leakage. When cash leakage occurs, the deposit reserves of the banking system will be reduced, that is, the funds that banks can expand loans by absorbing deposits will be reduced accordingly, thus weakening the bank's ability to create derived deposits. Cash leakage is mainly determined by factors such as the level of disposable income of the non-bank sector, the expected opportunity cost, the degree of inflation and the level of banking services. The ratio of cash leakage to total demand deposits is called the cash leakage rate. A high ratio indicates that more cash flows out of the bank, and the cash reserves of the banking system are reduced accordingly, and the derived deposits created are also reduced accordingly. A lower ratio means less cash flows out of the bank and the banking system has more cash reserves, thus creating relatively more derivative deposits. The cash leakage rate has the same impact on the currency creation of commercial bank deposits as the statutory reserve ratio, and is an important factor restricting the credit creation ability of commercial banks.