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A Bank run is a situation wherein a bulk of the customer base of a bank turns up at the bank branches and tries to withdraw money at the same time. Banks usually do not maintain all the deposits that are placed with them as liquid cash. They grant loans using this money and earn an income. A customer can walk into his bank and ask for his money anytime whereas a bank cannot force a customer to repay all the money he owes the bank on any given day. They have to wait for the customer to repay the loan in monthly installments as planned during the loan agreement.
So, let's say 1000 customers have deposited $1000 each with ABC Bank totaling to 1 million dollars. The bank would probably keep 100,000 of this money as liquid cash to meet daily customer withdrawal limits and disburse the remaining 900,000 as loans to customers. So, if let's say 500 of the 1000 customers turn up today at the bank and ask for the bank to give their money bank, practically speaking the bank does not have funds to pay them all. Though it is their money, the bank is not in a situation to give them all their money. So in this case the bank has only $100,000 whereas they need to pay $500,000 to its customers. Since the bank does not have enough money they will go bankrupt or bust.
So a bank run usually results in severe damages to the banks financial statements or in worst case make it go bankrupt.
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