CBN data shows currency outside banks drops by nearly N486bn in six months amid push for digital payments……
The amount of cash held outside Nigeria’s banking system has dropped to N4.92 trillion, its lowest level in seven months, according to the latest Money and Credit Statistics released by the Central Bank of Nigeria (CBN).
The decline indicates that more physical currency is gradually moving back into commercial banks as the apex bank continues efforts to encourage digital payments and reduce the country’s heavy reliance on cash transactions.
Data analysed from the CBN report showed that currency outside banks fell from N5.41 trillion recorded in December 2025 to N4.92 trillion in June 2026.
This represents a decrease of N485.80 billion, or 8.98 per cent, within the six-month period.
The June figure was the lowest recorded since November 2025, when cash outside banks stood at N4.91 trillion.
While cash held outside banks recorded a significant decline, the total currency in circulation experienced a smaller reduction during the period.
According to the data, total currency in circulation fell from N5.73 trillion in December 2025 to N5.52 trillion in June 2026, representing a decline of N209.56 billion or 3.66 per cent.
The sharper reduction in currency outside banks compared with total currency in circulation suggests that more cash was returned to commercial banks rather than remaining in circulation outside the formal financial system.
However, the decline did not follow a consistent downward path throughout the period.
Currency outside banks reduced from N5.41 trillion in December 2025 to N5.25 trillion in January and further to N5.19 trillion in February. Although the CBN data did not provide figures for March 2026, available records showed that the amount declined again to N5.08 trillion in April.
The trend briefly reversed in May when cash outside banks increased to N5.19 trillion, rising by N109.34 billion or 2.15 per cent compared with April.
The increase was short-lived, as June recorded the biggest monthly decline within the period. Currency outside banks dropped by N270.97 billion to N4.92 trillion, representing a 5.22 per cent fall.
Almost 90% of Nigerian currency remains outside banks
Despite the recent decline, the majority of Nigeria’s physical cash remains outside the banking system.
Analysis of the CBN figures showed that 89.11 per cent of all currency in circulation was held outside banks in June 2026.
This was lower than the 91.27 per cent recorded in May 2026 and 89.74 per cent recorded in June 2025.
The figures mean that for every N100 in circulation, approximately N89.11 was held outside banks in June.
The month-on-month decline of 2.16 percentage points indicates that more physical cash returned to the banking system during the period.
Compared with December 2025, the shift was more significant. At the end of last year, about 94.33 per cent of all currency in circulation was held outside banks, while only 5.67 per cent remained within the banking system.
By June 2026, the share of cash outside banks had fallen to 89.11 per cent, while the proportion retained within banks nearly doubled to 10.89 per cent.
Although the figures point to gradual improvement in formal cash management, they also highlight Nigeria’s continued dependence on physical currency, particularly across informal businesses, rural communities and everyday transactions.
CBN intensifies digital payment drive
The decline comes as the Central Bank of Nigeria continues to promote electronic payments through initiatives aimed at expanding financial inclusion and reducing cash dependency.
Despite the rapid growth of instant payment platforms, mobile banking, fintech services and agent banking networks, cash remains widely used in retail markets, transportation, informal trade and rural economies.
At the launch of the Nigeria Payment System Vision (PSV) 2028 in Abuja, CBN Governor Olayemi Cardoso said the initiative was designed to build on Nigeria’s digital payment progress and accelerate the move towards a more inclusive, technology-driven financial system.
The apex bank has set a target of reducing cash held outside banks to below 40 per cent of total currency in circulation.
As part of this effort, more than 10 million QR-code and tap-to-pay acceptance points are expected to be deployed across markets, transport centres, rural communities and commercial locations nationwide.
