Editing Openai/69189184-ed58-8011-9515-d71168b70e9c (section)

==== Your question: “Do you have source material from the central bank that confirms they don’t keep the principal?” ====
* The Bank of England’s statement indicates that the deposit created by the loan is removed when the loan is repaid (“destroys money”). That implies the bank does not simply keep the principal as a deposit on its balance sheet where it remains available to lend out again (in the sense of “kept principal”).
* In other words: the principal you repay reduces the liability (deposit) of the banking system, rather than being retained as extra surplus for the bank.

Thus: yes — the official description shows that the system does not treat your principal repayment as “bank now keeps that money and keeps it in circulation as a deposit,” but rather that the deposit is removed.