Novak: In July alone, Russians withdrew 620 billion rubles in cash from banks

10 August 21:15

YOUTUBE

Massive cash withdrawals from Russian banks and problems with payments to Wildberries sellers could exacerbate the crisis in Russia’s financial sector. Economist Andrei Novak stated that the problems may already be affecting one of the country’s largest banks—VTB. He made these remarks in an interview with the "Komersant Ukrainian" YouTube channel.

According to Novak, the compensation promised by the Kremlin to Wildberries sellers does not cover their actual losses.

“We’ve seen examples of such compensation from the Russians themselves, where goods worth several million rubles were lost, yet they were compensated only one or two thousand rubles,” he said.

The economist explained that a significant portion of Wildberries’ business was financed by loans, particularly those obtained from VTB Bank. Now, he says, the marketplace’s problems could place an additional burden on the bank.

“There are no such resources, because the entire flow of goods and the construction of warehouses—all of that was financed with borrowed money. They borrowed primarily from one bank—VTB—which now faces a massive liquidity problem because Wildberries is no longer solvent,” he adds.

Separately, Novak drew attention to the scale of cash withdrawals from the Russian banking system. According to him, in July alone, Russians withdrew 620 billion rubles from banks.

“In July alone, Russians withdrew 620 billion rubles in cash from banks. And since the beginning of the year—already nearly 3 trillion rubles,” Novak adds.

According to the economist, liquidity problems could spread to other banks and sectors of the economy.

“Liquidity problems are already beginning to spread like a chain reaction among Russia’s key banks,” he emphasized.

Novak compared the current developments to the economic events of the late 1980s and early 1990s in the Soviet Union.

“This is essentially a replica of the processes that took place in the late 1980s and early 1990s in the Soviet Union. It’s a chain reaction that, at the time, led to the collapse of the Soviet economy,” Novak emphasizes.

At the same time, the economist predicts that the situation in the financial sector could deteriorate further in the coming months.