Russian bank run crisis as savers rush to withdraw cash amid fears of financial collapse

By John Varga, World News Reporter

Vladimir Putin is facing a banking crisis. (Image: Getty)

Russian savers are rushing to withdraw money from their banks, as fears of a deposit freeze grow. Consultancy firm Frank RG says new data shows eight of the country’s 20 largest credit institutions experienced deposit outflows in June.

The largest withdrawals occurred at Russia’s biggest private lender, Alfa Bank, which has roughly 30 million clients. The bank saw a 3.9% decline in retail deposits equivalent to 125.3 billion rubles (£1.15 billion). Other banks posting significant outflows include the privately owned Sovcombank (-2.9%), Dom.RF (-2.5%), Russian Standard Bank (-2.2%), MKB (-2%) and both GPB and Post Bank (-1.1%).

Russians line up to withdraw cash (Image: Getty)

Further data shows the trend has continued into July and even August, as jitters over the health of Russia's financial system persist. Data provided by Ukrainian economists show Russians withdrew 226 billion rubles in July and 220 billion rubles by August 15 - two times the previous month's rate.

The withdrawals have coincided with a drop in interest rates, sparked by the Central Bank's recent decision to cut the key rate to 18% from 20%.

The average maximum deposit rate dropped to 18.3% annually in June, down from over 21% in December.

With roughly 60.3 trillion rubles (£553 billion) held in household deposits—about a third of Russia’s GDP—sustained outflows could have broader economic implications.

Andrei Zubets, director of the Institute for Socio-Economic Studies at the Financial University under the Russian Government, said last year that authorities might implement deposit freezes in response to the threat of rapid inflation should consumers begin spending en masse.

That claim was roundly dismissed by Elvira Nabiullina, the governor of the Central Bank.

Russia's banking system has been crippled by Western sanctions, which have cut it off from global financial markets.

Banks are increasingly being propped up by artificial mechanisms such as capital controls, forced lending, Government intervention and creative accounting.

According to Bloomberg, at least three of the largest financial institutions are poised to ask the Central Bank for a bailout as bad loans surge and balance sheets buckle under growing stress.

Officially, overdue loans reached 10.5% for households and 4% for businesses in Q1 2025. However, executives at Kremlin-controlled Sberbank and VTB admit the size of the bad debts is much larger and likely to climb.

Sources told Bloomberg that much of the apparent stability is a façade, propped up by creative accounting and political pressure. “Everything is not as good as it looks on paper,” one insider said.