When there is a ‘run’ on banks, they often don’t have the cash reserves on hand to pay out in cash to every account holder. By law, for their founding, they are bound to have a certain percentage easily liquid, I believe, but if EVERY account holder showed up, they simply would not have the cash available. Especially if it was an old Savings and Loan or ‘Building Society’ because they usually had their capital invested in home mortgages and the like.
There are investments and bonds that can not be paid out on demand, or not without a penalty of some sort. The most simple we used were 30 or 60 or 90 day holdings, which meant, for at least a minimum lump sum… say $5000, you would agree with your bank that you would NOT touch this money and for that, the bank would pay a higher rate of interest for the term of the ‘holding’. Perhaps, he had placed his funds in one of these types of ‘holdings’ for a term and forgot, or something.