Russian Banks Face Major Service Disruptions Amid Intensified Internet Control

On April 3, 2023, significant disruptions were reported by major Russian banks in their electronic services, as evidenced by online monitoring data and customer reports. This incident occurs against the backdrop of the Russian government's growing control over internet access, which has introduced restrictions on popular applications and is attempting to limit the use of virtual private networks (VPNs).

Specifically, Sberbank, the largest bank in Russia, reported temporary service interruptions on April 3. Other Russian institutions, such as T-Bank and VTB, also faced similar issues. Data from the monitoring service Downdetector indicated a sharp spike in outages within the Russian banking sector on the morning of the same day.

Approximately at 10:00 AM Moscow time, customers began to report problems with mobile banking applications, money transfers, and cash withdrawals at ATMs. In many cities, lines formed at shops, restaurants, and gas stations, as establishments could only accept cash payments.

The National Payment System of the Central Bank of Russia (NSPK) stated that the disruptions were caused by a "technical malfunction in one of the banks." The NSPK oversees Russia's Fast Payment System, a network for instant interbank transfers that relies on QR codes and phone numbers.

"There may be temporary difficulties in processing transactions with bank cards or cancellations of such transactions. The situation does not affect the security of funds," the NSPK said in a statement.

The pro-Kremlin news outlet Kommersant reported that the issue arose due to a failure in Sberbank's payment services and could have been "complicated" by customers' use of VPN services.

This mass outage occurred less than a week after Russia's Minister of Digital Development Maksut Shadayev announced on March 30 that the government would work on "reducing the use of VPNs"—one of the few remaining ways for Russian citizens to bypass online censorship.

Shadayev reportedly asked telecommunications operators and digital platforms to impose fees and block users for utilizing VPN services in accordance with an order from Russian President Vladimir Putin.

The blocking of VPNs likely contributed to the banking service disruptions on April 3, according to Fedor Muzalevsky, the technical director of RTM Group, a company specializing in IT security.

"The blocking of VPNs has been a topic of intense discussion in recent days, and it is quite likely that this issue contributed to today's outage—a case of so-called 'friendly fire,'" Muzalevsky told Kommersant.

Russian authorities have been gradually tightening online censorship since the onset of the full-scale war in Ukraine, efforts that have accelerated sharply in recent months. In early March, the Kremlin introduced a "whitelist" system that allowed access only to selected websites—primarily pro-Kremlin social media, media outlets, and official government sites—during prolonged mobile internet outages.

Internet blackouts have become increasingly common in Russia, with the Kremlin justifying the disruptions as security measures in response to Ukrainian drone attacks.