The controversial proposed tax on savings in Cyprus looks set to hit Russian pockets hard—with experts estimating that Russian deposits in Cypriot banks amount to at least $20bn.

“Confidence in Cyprus as a safe place to deposit money is going to be reduced to zero,” Anatoly Aksakov of the Russian association of regional banks told Interfax news agency.

As a condition for a desperately-needed €10bn ($13bn) bailout for Cyprus, fellow eurozone countries and international creditors on Saturday imposed a levy on all deposits in the island’s banks.

Deposits of more than €100,000 will be hit with a 9.9% charge, while under that threshold the levy drops to €6.75%.

Aksakov said the amount of Russian money likely to be affected was $20bn (€15.4bn), while the Russian edition of Forbes magazine gave much higher estimates.

Forbes said on its website that ratings agency Moody’s last year estimated the holdings of Russian businesses in Cyprus at $19bn, with another $12bn held there by Russian banks.

Forbes also cited other press estimates which place the personal deposits of Russians in Cyprus between €8bn and €35bn.

“Russians have lost up to €3.5bn in one day,” an editorial on the site read. “The news of a 10% tax on deposits in Cypriot banks has sown panic among the richest Russian businessmen.”

According to Interfax, the regional banking association’s vice president Alexander Khandruiev has suggested that Russia negotiate a deal with Cyprus to reduce, or even eliminate the tax in return for further financial aid.

Cypriot Finance Minister Michalis Sarris is due in Moscow this week.

In 2011 Russia lent Cyprus €2.5bn. Nicosia requested a further bailout of €5bn, which Moscow declined, deeming it the EU’s responsibility to find a solution to the island’s financial woes. Page 35