How would a governing body decide who can get a credit? A big part of banking is creating customer relationships and learning more about their companies, cash flows, growth opportunities or challenges. Because banks already have a good overview over a company's finances they are probably in the best position to estimate who would benefit and pay back from a loan.
The governing body would only decide how much is created not who it goes to. Every citizen would get an equal share of all newly created money. Banks would still be able to lend money as they see fit, but they would not be allowed to use leverage.
I have a store. People buy food from my store and I use that money to buy food from farmers. Ever since everybody started receiving an equal share of any new money created, farmers have been less interested in selling food to me. After all, they already have plenty of money.
That's great. I also have plenty of money, and there are plenty of wealthy, starving people who would like to give me money. But I just haven't been able to figure out what I could possibly offer the farmers to get them to go out into their fields and do farming. They say they "need" fertilizer. What the heck do I know about fertilizer? If there were something of universal value that I could give to the farmers, they could use it to go buy fertilizer. We used to have something for that. It was called money.
Ah, I see you are talking about helicopter money with leverage restrictions for banks. The money distribution part is being discussed as a potential successor to QE. I don't think restricting leverage for banks is in anyone's interest - assuming banks adhere to their capital requirements, don't take up unsustainable amounts of risk and need a bailout. Fractional reserve banking allows banks to offer their services for free and pay you for your money on their savings accounts. If you take that away you will simply have to pay for keeping an account or do your own research on how to invest the money, which will probably cause you more work and a worse risk / return ratio. Or take banks entirely out of the equation and allow everyone to simply keep their money at the central bank.
The governing body would only decide how much is created not who it goes to. Every citizen would get an equal share of all newly created money. Banks would still be able to lend money as they see fit, but they would not be allowed to use leverage.