(MOSCOW, RUSSIA) – Russia’s banking system is showing severe signs of strain, with a record 1,370 bank offices closed between January and August 2026, as citizens withdraw cash and default on loans at unprecedented rates.
The closures represent an average of 196 offices shutting every month. Sberbank, Russia’s largest state bank, accounted for 40 percent of the closures, with many occurring in peripheral regions where residents face restricted ATM withdrawals and delayed salary payments.
The wave of closures comes amid growing public distrust of the banking system. Russians are withdrawing cash in large volumes, with Gazprombank and Alfa Bank among the leaders in cash withdrawals. The situation has been worsened by recurring internet shutdowns and restrictions on ATM withdrawals, making physical branches more necessary even as they disappear.
Bad loans are also mounting. Rosneft Bank, among the top ten Russian banks by assets, reported a 1,700 percent increase in non-performing loans, amounting to approximately 277 billion roubles (£2.5 billion / $3.1 billion).
The crisis is being accelerated by statements from Kremlin loyalists. The head of the oligarch trade union, Shokin, described citizens’ deposits as “free money” and suggested they could be used for national privatisation. Communist leader Gennady Zyuganov has also proposed taking people’s deposits and investing them in the war effort.
Such proposals are fuelling further panic. Russians continue to withdraw money, banks cannot maintain their offices, and the resulting closures create more panic in a vicious cycle.
The Russian dictator Vladimir Putin has also asked major banks like VTB to finance struggling businesses, including Wildberries, which accounts for approximately 3 percent of Russia’s GDP. Russia’s GDP continues to fall and is now smaller than that of Italy or the US state of Texas.
In contrast, Ukraine’s banking system remains stable and continues to digitalise, becoming more user friendly despite the ongoing war.
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