Why are Russians pulling billions from banks? Fears of Putin’s asset grab grow

Russians are pulling billions of dollars out of their bank accounts amid growing fears that the government could eventually seize private assets to fund Vladimir Putin's war in Ukraine. The outflows come as the conflict puts increasing pressure on Russia's economy, with Ukraine targeting businesses, energy facilities and infrastructure within Russia.

Depositors withdrew nearly $3.4 billion in the first two weeks of August, adding to the $11.8 billion taken out during June and July. This cash exodus has been building for months, and could worsen if confidence in the banking system erodes further.

Sberbank's senior executive, Taras Skvortsov, warns that total capital flight in 2026 could reach twice the amount seen during the initial withdrawals following Russia's 2022 invasion of Ukraine. The large-scale withdrawals strain Russian banks, which already face rising bad debts and heavy lending tied to the war economy. Banks must provide more loans to support the government's military and war efforts, creating a challenging situation where customers want their money back, but banks have already invested it elsewhere.

Former Russian finance officials say the growing attacks inside Russia are making people uneasy, as they fear they might not be able to retrieve their cash later. Some banks have already invested depositor funds in other ventures, leaving customers without access to their money. The cash withdrawals extend beyond ordinary Russians; large businesses are also moving funds abroad. In the second quarter of 2026 alone, over $9.4 billion left Russia.

This capital flight creates another problem for the Russian government, which needs substantial funds to finance the war. The Russian government is already grappling with a large budget deficit, partly due to increased military spending. The Finance Ministry relies on selling government bonds to raise money, but recently faced a setback when planned bond sales were canceled due to lack of demand or cash.

The difficulty in selling bonds highlights how capital flight could directly impact the Kremlin's ability to secure financing for its escalating wartime expenses.

If Russia's war in Ukraine persists as a protracted conflict, the situation may worsen, placing further pressure on government finances and the broader economy. Concerns are rising that the government might eventually confiscate private assets if more money is needed. An associate of a Russian billionaire fears that Putin could seize private assets if the government requires additional funds, a view echoed by a former Russian finance official who notes a growing sense of instability in political power within Russia.

Ukraine's drone attacks on major Russian businesses, such as the Wildberries online shopping company, are adding to these fears, as the company has been repeatedly targeted, resulting in significant economic losses.