Russia is suffering from a slow-motion bank run as the Kremlin scavenges for war funding—and it may start seizing recruits for the military too

A financial crisis that has long been predicted by Russia experts and Kremlin insiders appears to have finally arrived as banks see depositors scramble to pull out their money amid fears it may be seized.

In the first half of August, Russians withdrew $3.4 billion (286.4 billion rubles), according to central bank data cited by the Washington Post .

That’s after $7.3 billion was withdrawn in July and $4.5 billion in June.

“Drones are flying.

Things are burning down.

Nervousness is growing.

And people’s everyday wisdom may be kicking in that they need to have cash under their pillow and not somewhere in banks where it may never be returned,” a former finance official told the Post , adding that banks have much of their capital tied in loans elsewhere.

The situation echoes the iconic scene from the movie It’s a Wonderful Life , when panicked depositors show up at the Bailey Bros.

Building & Loan demanding their cash, only to learn that it’s not all there.

The bank run in Russia may not be as dramatic or precipitous.

But the stampede out of lenders this year is on track to nearly double the $24.7 billion pace that was seen in 2022, when Vladimir Putin launched his invasion of Ukraine.

Back then, Russia was flush with cash and expected to pay for a short war.

But more than four years later, the invasion has turned into a quagmire that has crushed the Kremlin’s finances.

The budget is sinking into deeper deficits, the sovereign wealth fund has been nearly depleted, and tax hikes are straining consumers who are already struggling with high inflation.