2016 · Q89
Which of the following with regard to the term ‘bank run’ is correct?
General KnowledgeIndian Economy
- AThe net balance of money a bank has in its chest at the end of the day’s business
- BThe ratio of bank’s total deposits and total liabilities
- CA panic situation when the deposit holders start withdrawing cash from the banks
- DThe period in which a bank creates highest credit in the market
Explanation
A "bank run" is a panic situation in which large numbers of depositors simultaneously withdraw cash, fearing the bank may fail — threatening its liquidity. It is not an end-of-day cash balance, a deposit-liability ratio, or a credit-creation period.