Problem for the state: Banks print money because they are part of the public sector

Banks are able to print money because their liabilities are guaranteed by the state. A method by which this can be exploited is as follows...

i) Acquire a banking licence from the state which guarantees deposits.
ii) Have an accomplice deposit at your bank a sum of cash and create an equivalent deposit account for them... as is the normal practice.
iii) Return to the customer the same sum of cash but without cancelling the deposit account. (By way of repayment for making the original deposit.) This step is the crucial step which is unusual in that normally the deposit account would be cancelled.*
iv) Your accomplice now has an equal amount of cash to when they started but also they have a bank (state) deposit from nowhere.

*The bank has the ability to use reserves which ‘should’ belong to the government since it is the government which has issued liabilities in exchange for the deposit.