Question

What do you think would happen if all the depositers went ot ask their money at the same time?

Answer 1

Its really simple and catastrophic,The banks will go bankrupt and the whole system will collapse,This is the reason why RBI holds caution deposit of 9 lakh crores so that it could use it in emergencies,This has happened like in 1929 American Great Depression and in 2008 to Lehmann Brothers bank which trigerred 2009 global financial crisis