Russians Pull Billions from Banks Amid Fears Kremlin Could Seize Deposits to Fund War
Russians are withdrawing billions of dollars from the country’s banking system in one of the strongest sustained cash outflows since the early months of the full-scale invasion of Ukraine. The trend, now in its seventh consecutive month, reflects a mix of practical disruption from Ukrainian drone strikes and a deeper erosion of trust that private savings could eventually be tapped to help finance the long war.
Central Bank of Russia data show that nearly $3.4 billion (286.4 billion rubles) left the banking system in the first two weeks of August alone. That followed roughly $7.3 billion withdrawn in July and more than $4.5 billion in June. By early August the cumulative increase in cash in circulation since the start of the year had reached about 2.4 trillion rubles—already surpassing the roughly 2 trillion rubles that left the system during the entire first year of the war in 2022. On some days the daily outflow has exceeded 50 billion rubles, with one of the largest single-day figures recorded on August 12.
The shift is visible across major lenders. According to aggregated bank reporting, five of Russia’s seven largest banks have recorded net outflows of individual deposits in recent months. Gazprombank saw the steepest percentage drop, losing around 10.8 percent of household deposits (approximately 299.5 billion rubles) over a four-month period. Rosselkhozbank shed more than 15 percent. Alfa-Bank, the country’s largest private lender, lost about 5.6 percent. Even Sberbank, the dominant state-controlled retail bank, has experienced net withdrawals in recent months after earlier resilience.
Taras Skvortsov, a senior executive at Sberbank, has warned that total withdrawals for 2026 could approach twice the volume seen in the first year of the war. The pressure is arriving against a very different economic backdrop from 2022. Then, the initial panic was driven by the shock of invasion and the first wave of Western sanctions. Now the outflow is unfolding amid a slowing economy, high wartime spending, and visible physical insecurity inside Russia itself.
Two overlapping factors are driving the behaviour. The first is operational. Ukrainian long-range drone strikes have repeatedly targeted oil refineries, logistics hubs and other infrastructure deep inside Russian territory. In response, authorities have frequently shut down mobile internet across large areas to hinder drone navigation. Those blackouts have left card payments and online banking unreliable or unavailable for hours or days at a time, pushing ordinary Russians toward physical cash for everyday transactions. Cash in circulation has risen sharply as a result.
The second factor is psychological and political. Growing numbers of Russians fear that the state could eventually freeze, limit or nationalise bank deposits to cover the mounting costs of the war. Alexandra Prokopenko, a former adviser to the Russian Central Bank now living abroad, described the withdrawals as evidence of collapsing trust. “It means people have no trust in the Russian banking system or in the Russian financial system,” she said. “This is all a consequence of the fear that the government will do something with the banking system, that it could nationalize deposits.” She added that while outright nationalisation remains unlikely in her view, authorities could still impose limits on withdrawals.
Those fears have been reinforced by the Kremlin’s broader campaign of asset seizures. Prosecutors transferred tens of billions of dollars in private assets to state control last year. High-profile cases, including the seizure of assets linked to agricultural billionaire Vadim Moshkovich, have signalled that even wealthy and politically connected figures are not fully protected. A former senior Russian finance official captured the mood: “Drones are flying. Things are burning down. Nervousness is growing. And people’s everyday wisdom may be kicking in that they need to have cash under their pillow and not somewhere in banks where it may never be returned.”
The cash drain has created real liquidity strains for banks. Institutions that had placed funds in longer-term assets or government-directed wartime lending suddenly found themselves short of ready rubles. The Central Bank has responded by expanding repo operations, injecting large volumes of liquidity to keep the system functioning. In earlier months the structural liquidity deficit had already widened significantly; the continued demand for cash has kept pressure high. At the same time, the Finance Ministry has faced difficulties placing government bonds intended to cover a budget deficit that has ballooned well beyond original targets. Some auctions have been cancelled or scaled back as yields climbed, complicating efforts to finance ongoing military spending without further inflationary pressure.
The broader economic picture adds to the unease. The war economy has prioritised defence production and forced banks to extend subsidised credit to military-linked firms and other state priorities. That has left lenders carrying higher volumes of potentially problematic loans. Household bankruptcies have risen sharply, and consumer confidence has deteriorated as inflation, high interest rates and now fuel shortages from refinery strikes squeeze living standards. Growth forecasts for 2026 have been revised downward. Oil revenues, still the backbone of the federal budget, face both lower prices and reduced refining capacity after repeated Ukrainian attacks.
Not every observer describes the situation as a classic bank run. Overall household deposits remain elevated—more than double their level at the start of the war—and many Russians continue to hold term deposits that lock money in for longer periods. Some of the increased cash demand is purely practical, driven by payment disruptions rather than pure panic. The Central Bank has stated that existing liquidity support is sufficient and that major banks retain comfortable capital buffers. Officials have repeatedly denied any plans to confiscate private savings.
Nevertheless, the sustained seven-month outflow and the explicit warnings from bankers signal a meaningful shift in public behaviour. Ordinary depositors and wealthy elites alike are acting to reduce their exposure to the formal banking system. Businesses are reportedly routing funds through neighbouring countries to shield assets. The combination of physical insecurity from drone strikes, economic slowdown and political uncertainty over the state’s long-term intentions has made holding large balances in Russian banks feel riskier than it did even a year ago.
For the Kremlin, the trend carries practical consequences. A banking system short of retail deposits becomes less effective at channeling savings into government debt or wartime lending. Liquidity support from the Central Bank can paper over short-term gaps, but it does not restore the confidence that keeps money circulating inside the formal system. As the war enters its fifth year with no clear end in sight, the willingness of ordinary Russians to keep their savings in banks has become another pressure point in an economy already strained by sanctions, military demands and the physical reach of Ukrainian long-range weapons.
The coming months will show whether the outflow stabilises once internet disruptions ease or whether deeper doubts about the security of deposits continue to drive cash under mattresses and into informal channels. For now, the numbers are clear: Russians are choosing physical currency in record volumes, and the banking system is feeling the effects.
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