Russians are withdrawing record sums of cash from the countrys banks amid growing fears that the Kremlin could seize private deposits to fund its war in Ukraine.
About 9.4 billion dollars was converted into physical currency in the second quarter of 2026 alone, with July recording the largest monthly outflow on record. The flight has continued into August, with depositors pulling nearly 3.4 billion dollars in just the first two weeks of the month, according to data from the Russian Central Bank aggregated by the financial-data service banki.ru.
Deposits Falling at Nearly All Major Lenders
The retreat reflects deepening anxiety about the financial system, sharpened by escalating Ukrainian drone strikes deep inside Russia and fears that the state could move against private savings. A Sberbank senior executive warned that total capital flight in 2026 could approach twice the amount seen during the first wave of withdrawals after the full-scale invasion in 2022.
Five of the seven banks holding the largest pools of household deposits have been bleeding funds since early March. According to data aggregated by banki.ru, Gazprombank lost the most, shedding 10.8% of household deposits over four months. Rosselkhozbank gave up more than 15%. Even Sberbank, the countrys largest lender, saw its household balances turn negative in June and July.
Liquidity Squeeze Undermines War Financing
The withdrawals are creating liquidity problems for lenders and undermining the Kremlins ability to issue bonds to finance the fight. Russias Finance Ministry was forced to halt domestic bond placements earlier this year because of high interest rates around 16%. A former official in Russias financial sector told The Washington Post that banks had not anticipated the scale of the outflow.
The Central Bank has tightened oversight since June 1, allowing banks to flag suspicious withdrawal patterns and demand proof of origin for large cash deposits. Reuters separately reported a structural liquidity squeeze has opened up in the banking system. By the end of May, currency outside the banking system had swollen by roughly 13.6 billion dollars since January.
Alexandra Prokopenko, an associate at the Carnegie Russia Eurasia Center in Berlin, cast the exodus as a product of fear that the state could nationalize deposits to finance the war. While she views that outcome as unlikely, she noted that caps on cash withdrawals cannot be ruled out. The pressure has been harshest at smaller institutions, where some lenders shed more than half of individual deposits in just four months.
Fiscal Crisis Compounds the Pressure
The flight into cash compounds a broader fiscal crisis. Russias federal budget deficit reached 6.45 trillion rubles through July, already 2.8% of GDP, according to Meduza. Oil and gas revenues fell nearly 17% even as government procurement jumped almost 40% year-over-year. Economist Sergei Aleksashenko, a former deputy chair of the Central Bank, has warned the total deficit for 2026 could reach 7 to 7.5 trillion rubles.
Sources: The Washington Post; UNITED24 Media; Meduza; Reuters; banki.ru
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