x Abu Dhabi, UAEThursday 27 July 2017

Robbers are cashing in on Russians with roubles

Mounting economic problems have clients jittery about leaving their money in the bank - and thieves are striking when they take it out.

A man counts his money as he walks down a street in an up-market area of Moscow, which has been hit by a wave of street robberies.
A man counts his money as he walks down a street in an up-market area of Moscow, which has been hit by a wave of street robberies.

MOSCOW // Ten years after their economy and currency collapsed completely, Russians are again getting nervous about the declining value of the rouble and the reliability of their banks amid the current global financial crisis. And Moscow robbers appear to be reaping the benefits of this trepidation. The Russian capital has been hit by a wave of large-scale street robberies in recent weeks, a trend Moscow police say is directly connected to bank clients who are withdrawing large sums of cash from banks amid increasing economic instability. Armed robbers made off with an estimated 41 million roubles (Dh5.4m) in separate attacks recently, including a brazen daylight assault by two men on the driver of a Volkswagen Passat in southern Moscow. The two assailants pulled up next to the Volkswagen in their car, shoved a gun in the driver's face and made off with a bag containing 25 million roubles, according to the police report. On a single day in mid-November, Moscow police registered four similar attacks in which drivers were robbed of sums ranging from 300,000 roubles to three million roubles, according to state-run Vesti television. Russia remains a largely cash economy, with consumers continuing to use cash for everything from apartments to cars. But with more and more Russians pulling their money out of banks en masse amid economic anxiety and toting large sums of cash around, robbers are targeting what amount to sitting ducks, a Moscow police source said. "It's not necessarily a spike in the number of robberies, it's a spike in the number of high-yield robberies," a Moscow police source said on condition of anonymity because he was not authorised to talk to the press. "We are seeing three to five large-scale robberies a week." The crime wave highlights Russians' increasing distrust in banks and their fears over the value of the rouble, which the Russian central bank propped up by spending more than $50 billion (Dh184bn) in September and October. A greater percentage of Russians feel safer keeping their money in cash rather than in state-owned Sberbank, according to the latest survey on the subject by the Russian state pollster VTsIOM. Only 11 per cent of respondents said keeping their money in a Sberbank account was the safest place for their savings, down from 17 per cent in October, according to the poll, which was made public last month. By comparison, 20 per cent said they preferred to keep their savings in cash - either in roubles or foreign currencies, according to the poll. In a survey of 32 major banks, the Russian business daily newspaper Kommersant reported that clients withdrew 9.5 per cent of their deposits in October, a five-fold increase from September. Individual Sberbank clients withdrew 3.2 per cent of their deposits, or a total of 95.1 billion roubles, the bank said in a statement last week. Russia's 1998 financial crash wiped out the savings of millions of citizens and prompted a run on banks. In an effort to prevent a repeat scenario, the Russian government has implemented laws guaranteeing deposits in bank accounts up to 700,000 roubles. Furthermore, state-controlled Russian television has provided scant coverage of the global financial crisis's effect on Russia, while officials have tried to stem public fears of a declining rouble, saying there will be a "soft devaluation" of the Russian currency. "The government has been very careful with its public statements about the rouble," said Ronald Smith, chief strategist and head of research at Alfa Bank in Moscow. He said the government was wise to be concerned about a possible run on banks. Exactly how much this policy of reticence has managed to ease Russians' fears remains unclear. In September, Russians bought $6 billion worth of foreign currency from banks and currency exchange points, according to the latest available figures from the central bank. That is the highest figure for any single month since the bank began tracking these statistics in 1999. It is exactly at the spots where Russians are getting this cash - ATMs and currency exchange points - that Moscow robbers are staking out potential victims, the Moscow police source said. "You have people going to ATMs and making huge withdrawals two times a day," the source said. "At currency exchange booths people take large amounts of roubles, change them into dollars, and then they pack them into clear, plastic bags." The source sounded particularly exasperated about the translucent bags. "It's not exactly the best way to hide your money," he said. cschreck@thenational.ae