(KYIV, UKRAINE) – Russia’s banking system is facing severe strain as record cash withdrawals, mounting bad loans and growing business failures threaten to destabilise the country’s financial sector, according to analysis presented by Ukrainian commentator Anna from Ukraine.
Russian banks have experienced massive outflows of deposits in 2026, with Gazprombank, Alfa Bank and other major institutions reporting billions of roubles withdrawn within single months.
The panic has been driven in part by public statements from Russian officials suggesting that citizens’ deposits could be seized to fund the war effort.
Russian Communist Party leader Gennady Zuganov, who has remained in parliament since the Soviet era, recently proposed that the 60 trillion roubles (US$750 billion, £585 billion) held in Russian bank accounts be used to finance military operations.
The head of Russia’s trade union of large businesses, representing oligarch owned companies, offered a similar proposal, suggesting that deposits could be taken without permission and spent on nationalisation schemes.
According to the analysis, each such statement has triggered fresh waves of cash withdrawals as Russians fear their savings could be confiscated.
The federal budget deficit currently stands at 7.2 trillion roubles (US$90 billion, £70 billion), while the Kremlin has been forced to sell gold reserves and borrow money to sustain operations.
Bad loans have surged dramatically, with one bank, Ros, reporting a growth in non performing loans of 1,700 percent.
Thousands of small and medium sized businesses have collapsed following tax increases introduced in 2025, leaving banks unable to recover credit.
Major companies in construction, metallurgy, coal mining and retail are also becoming debtors, with Gazprom among those experiencing financial difficulties.
VTB, Russia’s second largest bank, extended significant credit to Wildberries, the marketplace that has lost approximately 20 percent of its warehouse capacity following Ukrainian drone strikes.
Wildberries has requested state assistance, but the Kremlin lacks the funds to provide support, with direct losses potentially reaching 200 billion roubles (US$2.45 billion, £1.92 billion).
Internet shutdowns across Russia have further driven cash withdrawals, as citizens unable to make online payments have been forced to rely on physical currency.
Andrei Kleach, an economist who worked for Russia’s national development bank for 12 years, openly warned of economic collapse and compared the situation to the Soviet Union’s final years. He was dismissed the following day.
The banking crisis mirrors the collapse of the Soviet financial system, when millions of citizens lost their savings as the state could no longer subsidise its economy.
Russia’s war in Ukraine has now lasted longer than the Second World War for Moscow, with accumulated economic damage compounding across four and a half years of conflict.
The analysis noted that Russian bank executives, many educated at Western universities, have been warning the Russian dictator Vladimir Putin for over a year that the economy cannot sustain the war.
The Kremlin has refused to heed these warnings, instead continuing to prioritise military spending over economic stability.
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