Cash outside banks falls to seven-month low as Nigerians return more money to the banking system
New CBN figures show more Nigerians are taking cash back to the banks, a small but notable shift in a country where cash still dominates everyday life.
Nigeria is a country where cash still dominates everyday transactions, but more Nigerians are beginning to take their money back to the banks. Fresh data from the Central Bank of Nigeria (CBN) shows that cash held outside the banking system fell to ₦4.92 trillion in June 2026, the lowest level in seven months, signalling a gradual shift towards formal banking.
On the surface, the numbers suggest more people are depositing their cash instead of keeping it at home, in shops or within the informal economy. That is a positive sign for the banking system, especially as the CBN continues its push for digital payments and greater financial inclusion.
The trend becomes even clearer when compared with the total amount of money in circulation. While overall currency also declined slightly from ₦5.73 trillion in December to ₦5.52 trillion in June, the drop in cash outside banks was much steeper. In simple terms, the money did not disappear; more of it found its way back into banks.
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The journey has not been perfectly smooth. Cash outside banks fell steadily between December and April, rose slightly in May, then dropped sharply again in June by ₦270.97 billion, its biggest monthly decline so far this year.
Even with that progress, Nigeria remains a deeply cash-dependent economy. The CBN data shows that 89.11 percent of all currency in circulation was still outside banks in June. Put differently, nearly ₦89 out of every ₦100 in circulation was not sitting in a bank account. That reflects how heavily many Nigerians still rely on cash for everyday transactions, particularly in local markets, transportation, rural communities and the informal sector.
There are, however, signs that things are moving in the right direction. At the end of 2025, more than 94 percent of the country’s cash was outside the banking system. By June 2026, that figure had dropped to 89.11 percent, while the share of cash held within banks almost doubled to 10.89 percent.
The CBN hopes this is only the beginning. Governor Olayemi Cardoso has set an ambitious target of reducing cash outside the banking system to less than 40 percent of money in circulation by 2028. The bank also plans to bring 50 million more Nigerians into the formal financial system over the same period.
Reaching that goal will not happen overnight. Cash remains deeply woven into how millions of Nigerians live and do business. But the latest figures suggest that, little by little, more people are bringing their money back into the banking system and that is a meaningful step towards a more connected and inclusive financial economy.
