A financial crisis long forecast by Russia experts and Kremlin insiders appears to have arrived, with banks seeing depositors rush to withdraw money amid fears that it could be seized.

In the first half of August, Russians withdrew $3.4 billion, or 286.4 billion rubles, according to central bank data cited by the Washington Post. That followed $7.3 billion in withdrawals 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 up in loans elsewhere.

The situation has drawn comparisons to the famous bank-run scene in It’s a Wonderful Life, when panicked depositors arrive at the Bailey Bros. Building & Loan demanding their cash and learn the money is not all there.

Russia’s outflows may not be as sudden or dramatic, but the pace of withdrawals this year is on track to nearly double the $24.7 billion pace recorded in 2022, when Vladimir Putin launched the invasion of Ukraine.

At that time, Russia was flush with cash and expected to finance a short war. More than four years later, the conflict has become a quagmire that has severely strained the Kremlin’s finances.

The budget is sliding deeper into deficit, the sovereign wealth fund has been nearly depleted, and tax increases are weighing on consumers already coping with high inflation. For households, that means the same economy being asked to fund the war is also absorbing tighter credit and higher living costs.

Moscow has ordered banks to provide capital to the defense industry, but many of those loans have turned into bad debts. Now, the loss of deposits across the financial sector has created a liquidity crunch so severe that it is threatening Russia’s ability to finance the war.

Taras Skvortsov, a senior executive at Sberbank, Russia’s top retail lender, told Russian radio that many banks do not have cash available to buy government bonds.

The finance ministry halted bond auctions indefinitely last month because borrowing costs rose and investor demand weakened. Those auctions are the Kremlin’s main domestic borrowing channel for covering its budget deficit, which reached $76 billion at the end of July.

As government funding sources narrow, ordinary Russians are increasingly worried their own savings could be next. The leader of Russia’s Communist Party recently told parliament that 130 trillion rubles held in bank accounts should be “mobilized” to address the country’s economic and budget problems.

Meanwhile, the finance ministry is preparing legislation that could give it access to $40 billion in pension savings held in privately managed funds.

That would come after Russian oligarchs have already seen their businesses nationalized, with $51.5 billion in assets seized for the state last year.

“If the government needs cash, Putin will just do a grab for assets. He doesn’t care,” an associate of a Russian billionaire told the Post. “And that’s where I think it’s heading.”

Warnings about Russia’s finances have been mounting for months. In June 2025, Russian banks raised concerns about a possible debt crisis as high interest rates made it harder for borrowers to repay loans. That same month, the head of the Russian Union of Industrialists and Entrepreneurs said many companies were in “a pre-default situation.”

In December, the Center for Macroeconomic Analysis and Short-Term Forecasting, a state-backed Russian think tank, said the country could face a banking crisis by October if loan problems worsen and depositors continue pulling out funds.

Earlier this year, Russian officials told Putin that a financial crisis could arrive by the summer amid surging inflation.

In May, sources told the Russian newspaper Izvestia that nearly 25% of the bond market was at risk of default because businesses that borrowed at low rates now have to refinance at much higher ones. The amount of debt that must be rolled over this year is about twice last year’s level, increasing pressure on cash flows and intensifying competition for liquidity.

A European intelligence report released in June also said Russian lenders are vulnerable because of soaring indebtedness and worsening loans. It said the number of Russians who declared bankruptcy last year rose by almost one-third to more than 500,000.

“The situation creates the illusion of a dynamic economy ⁠that, in reality, conceals an explosive situation which an economic shock, such as an ambitious package of sanctions against banks … could trigger,” the report added, according to Reuters.

Russia’s deteriorating financial sector also mirrors its battlefield performance. New Ukrainian tactics and drones have slowed Russia’s advance, damaged the country’s oil infrastructure, and pushed casualties above the replacement rate.

And just as Russia is searching for money to seize, reports indicate the military is preparing to increase the number of men it seizes to fill the ranks.

Authorities have already used coercive tactics to find new troops. Sources told the Wall Street Journal that the military is now preparing plans and procedures for a broader mobilization.

Because of the expected political backlash, the Kremlin may wait until after parliamentary elections next month to announce it.

An earlier mobilization in September 2022 triggered a mass departure of hundreds of thousands of men, many of whom fled to neighboring countries such as Georgia and Kazakhstan.

Rumors of another mobilization have already driven cross-border traffic higher. Real estate agents told the Journal that property prices have also risen recently in Georgia and Armenia in anticipation of another exodus.

This story was originally featured on Fortune.com