That's not true, there is a limit on their minimum reserves or capital requirements depending on the location.
"or capital requirements" Basel Accords are a very complex system of ratios between bank capital (as a guarantee against bankruptcy) and bank credit (at risk of depreciation). The resulting ratio from these accords currently evolves between 0 and 9.5%. One important detail : Basel III is a "voluntary regulatory framework". A lovely oxymoron that means "you have to comply with this, if you want to." https://en.wikipedia.org/wiki/Basel_III
So, If a customer A has $1000 in his account and the reserve rate is 10%, the bank can only lent $900 to some other person B. Then, in turn only 90% of that can be lent further. If you run this to the limit, for a 10% reserve rate, the amount of money that can be generated by banks is at most 10x the physical amount.
Currently 10% of deposits for big banks, ie more than $124MM in deposits.
Banks do not lend money, but instead newly create credit and money. See https://www.economicsnetwork.ac.uk/archive/starkey_banking
https://en.wikipedia.org/wiki/Money_creation#Credit_theory_o...
>A study of banking software demonstrates that the bank does nothing else than adding an amount to the two accounts when they issue a loan. The observation that there appears to be no limit to the amount of credit money that banks can bring into circulation in this way has given rise to the often-heard expression that "Banks are creating money out of thin air".
https://www.sciencedirect.com/science/article/pii/S105752191...
>This study establishes for the first time empirically that banks individually create money out of nothing.