Russians pull $7.3bn from banks in July and $3.4bn in early August over seizure fears
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Russian households and companies withdrew $7.3 billion from the banking system in July and about $3.4 billion in the first two weeks of August, according to Russian central bank data, as fears spread that the Kremlin could seize deposits to finance the war in Ukraine. Sberbank senior executive Taras Skvortsov said this year's total outflows could reach almost twice the $24.7 billion recorded in 2022, and banks are struggling to meet cash demand.
Key Facts
- Russia's central bank recorded more than $4.5bn in June, $7.3bn in July, and about $3.4bn in the first two weeks of August in deposit withdrawals.
- Sberbank senior executive Taras Skvortsov said this year's total withdrawals could reach almost double the $24.7bn recorded in 2022.
- Former Russian Central Bank adviser Alexandra Prokopenko said withdrawals reflect deep public fear that the government could nationalise deposits.
- A former senior Russian finance official told The Washington Post that some banks did not expect the outflows and that people are withdrawing half a trillion rubles per month.
- VEB chief economist Andrei Klepach said Russia cannot win a war of attrition against Western-backed Ukraine, and was then removed from his post and all public duties.
Cash Withdrawals
The central bank data show outflows reached more than $4.5bn in June, $7.3bn in July, and about $3.4bn in the first two weeks of August. Withdrawals have left banks struggling to pay shrinking cash amounts and caused liquidity problems in a financial sector already strained by rising non-performing loans tied to state-directed military production credit. Sberbank senior executive Taras Skvortsov told RBK Radio that a large outflow occurs every month and that the situation will not improve if the trend continues. Skvortsov said banks no longer have cash left to buy government bonds because of the liquidity problems, directly affecting the state.
Fear and Official Response
Former Russian Central Bank adviser Alexandra Prokopenko said withdrawals reflect deep public distrust of the banking system and fear that the government could nationalise deposits. Prokopenko sees nationalisation as unlikely but said authorities could impose restrictions on withdrawals. A former senior Russian finance official told The Washington Post that some banks did not expect the outflows and that people are withdrawing half a trillion rubles per month. VEB chief economist Andrei Klepach said Russia cannot win a war of attrition against Western-backed Ukraine, and was then removed from his post and all public duties.
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Russians pull $7.3bn from banks in July and $3.4bn in early August over seizure fears
