Russians Rush to Withdraw Cash from Bank Accounts Amid Fears of Deposit Nationalization

Russia is experiencing a record outflow of cash from its banking system, as residents rush to withdraw money from their accounts amid fears that authorities could freeze or confiscate deposits to cover mounting war expenses. According to The Independent, citing former Russian central bank adviser Alexandra Prokopenko, this trend reflects deep public distrust in the country's financial system amid what Russia officially calls a "special military operation."

"This means people don't trust either the Russian banking system or the financial system as a whole. It's all a consequence of fear that the authorities will do something to the banking system, up to and including nationalizing deposits," Prokopenko explained.

Tens of Billions of Rubles Draining Out Monthly

According to Russia's Central Bank, nearly 286.4 billion rubles (roughly 70.3 billion crowns) were withdrawn from accounts in just the first two weeks of August. The Washington Post reports that Russians pulled out the equivalent of $7.3 billion (151.4 billion crowns) in July, and more than $4.5 billion (93.3 billion crowns) in June.

According to Euronews, demand for cash began rising as early as March and has continued to grow since — Russians are now withdrawing an average of 300 billion rubles (73.5 billion crowns) from their accounts every month.

Five of the Seven Largest Banks Affected

An outflow of individual deposits has been recorded at five of the country's seven largest banks. Gazprombank suffered the biggest losses, shedding 299.5 billion rubles (about 73.5 billion crowns) over four months — 10.8% of all its deposits.

Rosselkhozbank lost 270.5 billion rubles (66.5 billion crowns), a drop of more than 15%. Russia's largest private bank, Alfa-Bank, lost 179.4 billion rubles (over 44 billion crowns), or 5.6% of its deposits. According to Euronews, such a pace of withdrawals points to a growing risk of liquidity problems within Russia's financial system.

Fear of Drone Strikes and Confiscations

Russians' concerns stem from two main factors: possible destabilization of the financial system due to Ukrainian drone strikes, which have mainly targeted oil infrastructure, and fear that the state will freeze or seize deposits to cover soaring military spending.

The authorities' own actions have only deepened this anxiety: last year alone, private property worth around $51 billion (over a trillion crowns) was transferred under state control. In June, assets worth $7.6 billion (157.4 billion crowns) linked to billionaire Vadim Moshkovich, founder of the agricultural holding Rusagro, were confiscated.

At the same time, President Vladimir Putin has been collecting funds from oligarchs that officials describe as "voluntary donations" — according to Euronews, hundreds of billions of rubles had already been extracted this way by mid-August.

Source: novinky.cz