I have taken some economics courses in university, where I was introduced to fractional-reserve banking. From my understanding, in fractional-reserve banking, the bank has motivation to encourage deposits from depositors, because a large part of these deposits can then be lent out as loans. A small part of the deposits have to be retained as "reserves" (hence the term "fractional-reserve banking"). The bank profits by earning more interest on the loans than it has to pay to the depositors.
However, I read several articles that contradict my understanding. In an article from the Quarterly Bulletin of the Bank of England - Money creation in the modern economy:
The reality of how money is created today differs from the description found in some economics textbooks ... Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.
In reality, neither are reserves a binding constraint on lending, nor does the central bank fix the amount of reserves that are available.
While the money multiplier theory can be a useful way of introducing money and banking in economic textbooks, it is not an accurate description of how money is created in reality.
In light of this, I am forced to re-evaluate my understanding of fractional-reserve banking. The most pressing question I now have is: if banks do not need deposits to create loans, why do they take deposits? What motivates retail banks to allow retail customers to deposit their money if banks have no need for deposits to make loans?