What would happen if all the depositor's went to the bank to ask for their money at the same time?? Plz i want a quick response...
A situation where all depositors want to withdraw their deposits from the bank at the same time would lead to a bank run.
It arises mainly when there are rumours that bank may become insolvent and default on payments .
This leads to panic among depositors.The large scale withdrawal causes further panic as it actually increases the likelihood of defaults. Thus it may become self fulfilling prophecy to the point it may cause bankruptcy.
It arises mainly when there are rumours that bank may become insolvent and default on payments .
This leads to panic among depositors.The large scale withdrawal causes further panic as it actually increases the likelihood of defaults. Thus it may become self fulfilling prophecy to the point it may cause bankruptcy.