Commercial banks do not contribute to quantum of money supply in the economy as they do not have note-issuing authority

False,

Commercial banks contribute to quantum of money supply in the economy through credit creation.

Additional Information:-

However, commercial banks do not issue notes and currency, yet they contribute to the money supply.

It is done through credit creation.

The commercial banks offer loans out of the primary deposits.

this loan is provided by opening a new demand deposit account.

This new demand deposit account acts as money and can be used to settle financial obligations through the cheque facility.

Thus, all new secondary deposits created also work as money.

Thus, commercial banks contribute to the quantum of money supply.