As someone who studied banking after school, this is not correct or not as infinite, at least. Governments set a ratio of deposits vs loans. In my country, they can "create" loans of 150% of deposits. (wasn't always that bad until the ANC forced banks to take on government debt). Anyway, this means for every $100 deposited at the bank, the bank can create $150 of loans. Which is why they fear everyone asking for their money back at the same time, most of all.
If you want to fuck with a country, get everyone to line up at the banks at the same time, and start withdrawing every last cent.