Russians are withdrawing money from banks amid the mass reduction of the branch network

Russian banks are simultaneously reducing the number of branches, while clients are withdrawing significant amounts of cash from them. Since the beginning of the year, 1,370 bank branches have been closed in russia, while the population has converted 2.4 trillion rubles into cash. This is reported by the Foreign Intelligence Service of Ukraine, reports UNN.

Details

The Russian banking system is simultaneously reducing its physical presence and losing clients’ money. Banks are closing branches and moving services online. In response, Russians are withdrawing their savings in cash, while businesses are trying to move capital abroad. Both processes point to one thing: trust in the state financial system is declining. Since the beginning of the year, 1,370 bank branches have been closed in russia. If the pace continues, their number could exceed 2,000 by the end of the year

According to available information, banks are closing an average of 196 branches per day - twice as many as last year. "Sberbank" closed the most outlets—about 540, accounting for nearly 40% of the total.

Banks explain the reductions by the shift of clients to digital channels and the need to cut costs. At the same time, the closure of branches means there are fewer places where clients can obtain cash or conduct transactions without using digital services.

At the same time, depositors themselves are withdrawing money from banks. According to the central bank of russia, 2.4 trillion rubles have been converted into cash since the beginning of the year. In July, the outflow reached 643 billion rubles - the highest level in recent months. During the first half of August, another approximately 300 billion was withdrawn from banks. For the population, this is no longer simply a habit of keeping some money in cash. The war, sanctions, and the practice of state intervention in the economy are undermining confidence that money in an account belongs to the client and is accessible at any moment

According to intelligence information, concerns are growing in russia that banking resources could be used to finance the war or that, in the event of a new financial crisis, the state could find a way to dip into citizens’ savings. Big business is demonstrating similar behavior. Russian companies are trying to keep part of their capital outside the country due to fears of confiscations, new restrictions, and financial losses caused by the war.

We remind you

Russia’s largest state-owned banks are recording a deterioration in the quality of their loan portfolios, an increase in non-performing debt, and are being forced to build up reserves.