What do you think would happen if all depositors went to ask for their money at the same time? 3 marks question
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If all the depositors would go to banks and withdraw their money at the same time, then there will be a huge cash crisis in the banks as they will run our of money. They will not be able to give loan to markets and several companies. Bank cash reserve ratio will also decrease drastically.
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Answer:
If literally everyone who had money deposited in a bank were to ask to withdraw that money at the same time, the bank would most likely fail. It would simply run out of money. The reason for this is that banks do not simply accept people's deposits and keep them, whether in cash or electronic form.
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