Fear of bank runs in Ukraine and Russia as ATMs see record withdrawals

New Delhi, Feb 25:  Ukrainian citizens flooded the country's ATMs in an attempt to withdraw their money as the military conflict with Russia intensified. Russians have also been queuing at the banks, RT reported.

Long queues of people trying to withdraw cash have led to fears of bank runs. Images taken in Ukraine capital Kiev and other major cities showed long lines forming at ATMs after the central bank, the NBU, enacted a temporary cash withdrawal limit of 100,000 Ukrainian hryvnia per day (about $3,353).

On Friday, the head of the NBU said that the flow of cash into ATMs would not be limited, and non-cash payments are also not subject to restrictions.

The regulator, however, has prohibited the country's banks from making any foreign exchange transactions using Russian and Belarusian rubles. It has also banned operations on the accounts of Russian residents and introduced a moratorium on cross-border currency payments, the report said.

In Russia, people have also been seen queuing outside of ATMs. Data by the Russian central bank showed that demand from the population and businesses for cash has jumped to its highest levels since March 2020, RT reported.

On Thursday, Russians withdrew more than 100 billion rubles (over $1 billion) from their accounts. However, that amount is 1.5 times lower than during the surge in currency withdrawals at the beginning of the Covid-19 pandemic.

The Russian regulator has announced an emergency support package, saying it will ensure the maintenance of fiscal stability and the business continuity of financial institutions by using all necessary tools. The central bank assured that the country's credit organisations have a clear plan of action for any scenario.