In the first two weeks of August, Russians withdrew nearly 286.4 billion rubles, and a former central bank adviser warns that confidence in the entire financial system has evaporated.
In the past few weeks, Russians have been withdrawing cash from banks in large numbers, a trend that peaked amid intensified Ukrainian drone attacks. According to data reported by Tportal, sourced from the Russian central bank, in the first fourteen days of August, citizens withdrew nearly 286.4 billion rubles, equivalent to approximately 3.4 billion US dollars.
Significant outflows were also recorded earlier: in July, $7.3 billion was pulled from banks, while in June that amount was $4.5 billion. The main reason for this behavior is the fear that the Kremlin might resort to seizing citizens' deposits to finance the war against Ukraine.
Aleksandra Prokopenko, a former advisor to the Russian central bank, points out that such a large withdrawal of money clearly shows how deep the distrust among people is.
"This means that people have no confidence in either the Russian banking or financial system. It all stems from the fear that the authorities might do something with the banking system, namely, nationalize deposits."
This wave of cash withdrawals is already creating liquidity problems in some Russian banks, a former senior official of the Russian financial system told The Washington Post.
"Drones are flying, things are burning, and nerves are fraying. Perhaps that everyday logic kicks in that it's better to have cash under the pillow than in a bank, from where you might never get it back."
According to him, banks were not prepared for such a strong influx of withdrawal requests.
"For some banks, this is indeed a problem. They didn't expect it and had invested the cash elsewhere, and now people are coming and withdrawing half a trillion rubles a month."
It is important to note that the sources present two different estimates of the value of the withdrawn funds in dollars: Tportal states "about nearly three billion dollars" in one place and "about 3.4 billion dollars" in another.
