Objective: to study the impact of economic sanctions on the key indicators of the liquidity and financial condition of the sanctioned banks of the Russian Federation, by comparing them to the indicators of non-sanctioned credit institutions. Methods: logical method, method of comparative analysis, statistical methods, method of graphic images.Results: the article examines the impact of economic sanctions on the Russian banking system. The sanctions affecting the Russian banking system are presented in chronological order. It is stated that the negative impact of the Western sanctions on the banking system is not denied. The authors analyze scientific works devoted to the effect of sanctions on Russian banks. The analysis revealed the absence of comprehensive studies of the effect of sanctions on the liquidity and financial condition of the sanctioned banks. For this assessment, the authors analyzed the performance indicators of six sanctioned and six non-sanctioned Russian banks with the largest assets. It is proved that economic sanctions led to deterioration of the financial results of the sanctioned banks, increased their dependence on the domestic interbank market and the funds from Bank of Russia. Other changes were mainly due to the overall economic situation, internal policies of banks and the policy of the Bank of Russia, not the sanctions. Scientific novelty: the article, for the first time, basing on the comparative analysis of the main performance indicators of the sanctioned and non-sanctioned banks, proved the impact of economic sanctions on the Russian banking system. However, despite the banking sector adaptation to the existing conditions through their reorientation to the domestic market, it should be noted that a certain tension ensuring the long-term liquidity is still preserved. The cost of the available long-term resources to be attracted remains relatively high, which influences the financial results of the banking sector. Therefore, without making cardinal decisions in this sphere, against the background of maintaining the effect of sanctions from the United States and the European Union, and perhaps their aggravation after the Russian banks entering the Crimean market, it would not be possible to achieve the long-term effect. In this regard, it is necessary to develop additional mechanisms to strengthen the banking sector by optimizing its internal costs, developing new markets available for long-term borrowing (China, India, Brazil, etc.), and using additional measures by the Central Bank of the Russian Federation to support the sanctioned credit institutions. Practical significance: the main provisions and conclusions of the article can be used in the formation of the development strategy for credit organizations, which bear the risks of the deterioration of the financial situation of borrowers due to the general economic situation, the restricted access of the sanctioned banks to cheap Western long resources; by the Central Bank of the Russian Federation when forming the monetary policy; by economists, financiers for the expansion and deepening the subject areas of scientific research. The study of the effect of economic sanctions on the banking sector allows predicting the further development of the situation and outline the steps necessary to mitigate the negative external influences within the constraints, and to form the patterns of stabilization and development with the aim of increasing bank stability.