Massive Russian Household Transfers to Foreign Banks in June
In June, Russian households moved a record 4.65 billion dollars to overseas bank accounts, a figure reported by Kommersant based on Central Bank data. The regulator noted that Armenia received more than 450 million dollars in transfers from Russia during June, setting a new all-time high and doubling the prior month’s total of 266 million. Transfers to Kazakhstan topped 140 million, up from 95 million in May. Russians sent 300 million to Kyrgyzstan and 231 million to Georgia, while the overall balance of funds held in non-resident Russian banks rose from 31.5 billion at the end of February to 43.5 billion by the end of June.
Market observers point to the summer season as a period when outward transfers commonly rise as people take vacations. With Russian payment cards not functioning abroad, many travelers opt to move funds into cards issued by foreign banks or rely on alternative arrangements that work in foreign countries. The upsurge is partly driven by practical needs during trips and by the desire to ensure access to money abroad without relying on domestic cards that might be blocked or restricted in foreign markets.
Roman Prokhorov, the chairman of the board of the Association for Financial Innovations, notes that parallel imports have begun to influence the pattern of transfers as well. He suggests that some individuals prefer safer, more formal transactions when dealing with cross-border purchases and settlements, which can involve moving money to foreign accounts in advance of purchases made abroad. This shift reflects broader changes in consumer behavior and the evolving landscape of international trade that can affect how money circulates across borders.
In early July, Anatoly Aksakov, the chair of the State Duma Committee on Financial Markets, along with Nikolai Zhuravlev, a senator in the Federation Council, introduced a bill for consideration by the State Duma. The proposal would require banks to transfer funds between accounts with no commission, up to a monthly ceiling of 1.4 million rubles. The measure aims to simplify internal transfers while potentially reducing transaction costs for individuals who move money across accounts or borders. Supporters argue that this policy could improve liquidity for households and small businesses, whereas opponents warn it might affect bank revenue and risk management.