A female mugger targeted a woman in her fifties as she withdrew money from a cashpoint.
The robber, described as a dark-skinned European, struck outside Nationwide in High Street, Wanstead, at 11.30am today.
A 37-year-old woman, who witnessed the incident and asked not to be named, said: "I was waiting to use the cash machine myself.
"There was a lot of people around. I thought the couple at the cashpoint were mother and her daughter.
"I thought they were having a joke because there was a lot of nudging, but then I saw loads of money fall on the floor.
"They started scrapping to get the money, which looked like it was about 20 £20 notes.
"It looked like the woman managed to get back most of her money.
"It was horrible, the young girl was making out to the public that she was with the woman.
"The girl started walking off towards Wanstead tube station, I wanted to go after her, but there are no police around to protect you.
"I have never witnessed anything like this before, especially on my own doorstep.
"It has put me off using cashpoints now."
The mugger wore her hair in a plait at the base of her neck and was around 5ft.
Natalia Popa who works at Percy Ingle bakery next door to the bank, said: "The woman came in to count her money. A man came in after her and gave her the receipt from the cash point.
"She said she saw the woman watching her before she used the machine."
Staff in the bank confirmed a woman was mugged today and said the incident had been reported to police.
The woman was uninjured during the incident.