Let's break it down into more steps so it's clearer. We can
ignore Customers A and B because they have no impact on anything
between the Bank and C.
The bank makes a $900 loan to C. Let's say the bank has 10,000 in reserves, and hands him the money
in cash:
Bank
Cash: 10,000 - 900 = 9,100
Loans Receivable: 0 + 900 = 900
Customer C:
Cash: 0 + 900 = 900
Loan: 0 - 900 = -900
You can see the transaction adds up to zero on both C and Bank's side.
Now let's say Customer C immediately deposits the $900 to his account
at Bank:
Bank
Cash: 9,100 + 900 = 10,000
Loans Receivable: 900
Customer Deposits: 0 - 900 = -900
Customer C:
Cash: 900 - 900 = 0
Loan: -900
Bank Account: 0 + 900 = 900
The bank gets $900 in Cash, but along with it comes a $900 liability
in Customer Deposits - this is because they "owe" Customer C $900 - he could come and withdraw the money at any time.
Now, let's say Customer C gets paid at his job (in cash) and makes a $300 loan payment:
Bank
Cash: 10,000 + 300 = 10,300
Loans Receivable: 900 - 300 = 600
Customer Deposits: -900
Customer C:
Cash: salary - 300
Loan: -900 + 300 = -600
Bank Account: 900
After 2 more loan payments of $300:
Bank
Cash: 10,300 + 600 = 10,900
Loans Receivable: 600 - 600 = 0
Customer Deposits: -900
Customer C:
Cash: salary - 300 - 600 = salary - 900
Loan: 0
Bank Account: 900
The bank has $900 more than at the start, but, that is C's money - he can come and withdraw it at
any time, then the Bank will be left exactly where it started:
Bank
Cash: 10,900 - 900 = 10,000
Loans Receivable: 0
Customer Deposits: -900 + 900 = 0
Customer C:
Cash: salary - 900 + 900 = salary
Loan: 0
Bank Account: 900 - 900 = 0
Customer C has more than he started with but that's because he got income from his job.