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When can a huge cash crisis in a bank take place?

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a

When people don't pay back the loan amount.

b

When all the depositors approach the bank at the same time for withdrawal.

c

When people are not taking loans.

d

None of these

answer is B.

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Detailed Solution

When all the people who deposited their surplus money in the bank approach the bank at the same time to withdraw their money, this will lead to a huge money crisis for the bank. As banks have used the money from deposits for giving out loans or investing in projects, they won't have much money in the bank to give all the depositors their money back. But this type of situation does not usually happen because all the depositors don't need their money at the same time.

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