Russians withdraw billions from banks amid Ukraine strikes and fears Kremlin could seize savings - Telegraph
The consequences of the war are increasingly altering the financial behavior of Russians themselves. Against the backdrop of Ukrainian strikes deep into Russian territory, economic problems, and fears about the safety of their bank deposits, Russians have been withdrawing money from banks for the seventh consecutive month—since the beginning of the year, the outflow has reached 2.4 trillion rubles.
According to Censor.NET, the British newspaper The Telegraph reports this, citing data from the Central Bank of the Russian Federation, Russian media, and economic experts.
"Drones are flying, something is on fire": Russians are switching to cash
In the first two weeks of August alone, the amount of cash in circulation rose by 286.4 billion rubles—about £2.5 billion. According to the Russian Central Bank, the outflow of funds from the banking system has continued for the seventh consecutive month.
There are several reasons. The Telegraph cites, among them, increased instability due to Ukrainian drone attacks, pessimistic economic outlooks, and fears that the government might freeze deposits or suddenly restrict withdrawals.
"Drones are flying. Something is burning. Tension is mounting. And perhaps people’s common sense is kicking in—that money should be kept under the pillow, not in banks, where it might never be returned," the publication quotes a former Russian financial official as saying.
The Telegraph notes that Russians are increasingly feeling the effects of the war against Ukraine unleashed by Vladimir Putin, while Kyiv continues to launch long-range strikes against Russian oil refineries and other economic targets.
In August, banks saw cash outflows every business day. The largest outflow was recorded on August 12—56.8 billion rubles.
More than 620 billion rubles were withdrawn in July
The August outflow was preceded by a record-breaking July, when more than 620 billion rubles were withdrawn from the banking system.
Thus, as of the beginning of 2026, the total had reached 2.4 trillion rubles. This is already more than Russians withdrew from banks during the entire first year of Russia’s full-scale invasion of Ukraine. In 2022, the outflow amounted to about 2 trillion rubles, with the majority of the money withdrawn by the public and businesses in the first weeks after the invasion began.
The demand for cash has already taken its toll on the banking system. According to the article, the ruble liquidity shortage has reached its highest level since March 2022, and the Central Bank of the Russian Federation has had to increase lending to banks.
Due to a lack of liquidity, many banks also do not have sufficient funds to purchase Russian government bonds.
It's not just fear for deposits
At the beginning of the year, rumors circulated on Russian Telegram channels about a possible freeze on bank deposits. Russian Finance Minister Anton Siluanov called them "fake news," and economists considered such a scenario unlikely.
However, this is not the only reason Russians are turning back to cash. The widespread mobile internet blackouts that Russian authorities are imposing in various regions are making it difficult to pay with cards.
"Due to the actions of the Russian authorities, Russians are increasingly turning to cash: tax hikes are hurting businesses, and internet outages are making cashless payments unreliable," The Telegraph quotes the independent Russian publication The Bell as saying.
Other factors cited include tax increases, persistent inflation, and tighter government oversight of financial transactions.
Russian big business is also moving money out of the country
The anxiety has spread beyond the general public. Major Russian companies are transferring funds abroad in an effort to protect their assets from possible seizure by Russian regulators. In the second quarter alone, approximately 800 billion rubles were transferred out of Russia in this manner.
According to The Telegraph, Russian billionaires are concerned about the Kremlin’s large-scale campaign to nationalize assets, as a result of which assets worth trillions of rubles have already come under state control. Ukrainian strikes on Russian enterprises, intended to increase pressure on the Russian economy, have further contributed to this concern.
The outlook for ordinary Russians is also deteriorating. According to a poll cited by the publication and released in June, 60% of respondents believe that the economic situation in their regions is getting worse.
What led up to it
- Against this backdrop, the Kremlin is also becoming more sensitive to public criticism of the state of the economy. As a reminder, last weekend, Andriy Klepach, the chief economist of Russia’s second-largest bank, was fired following reports of his critical assessments and his prediction that Moscow would lose the "war of attrition" against Ukraine.
