Banks have no limit on reserve requirements, so they can withhold 20% or 1% or 0%,
Sure there is (at least in the US). Both the FED and FDIC regulatehow much banks can lend out. these limits are based on capital requirements, deposits, loans, etc.
but their ability to make loans is limited by the scarcity of their loan officers, who need to make sure that the loans are good and will be paid back (or at least serviced).
This really dosent limit a banks ability to make loans. Maybe its ability to make good loans…