Nigeria’s banks had more than ₦6 trillion deposited with the Central Bank of Nigeria (CBN) by 16 October 2026. The sharp increase came after the apex bank repaid ₦2.408 trillion in matured Open Market Operations securities, releasing funds into the banking system.

But the bigger question is not how much money the banks deposited. It is what happened to the liquidity released into the financial system, why banks kept so much of it with the CBN, and what this means for the flow of credit to businesses and individuals.

Data from the CBN’s daily banking system liquidity reports, as presented in the supplied figures, show that banks’ net placements at the Standing Deposit Facility rose from approximately ₦3.86 trillion on 13 October to ₦6.083 trillion on 16 October. That represents an increase of about ₦2.22 trillion, or roughly 57.6 percent using the rounded figures.

The transaction that changed the liquidity equation 

To understand the increase, it helps to look at how the CBN manages money in the banking system. Open Market Operations are among the instruments the apex bank uses to influence liquidity and monetary conditions. When the CBN sells securities, buyers pay for them, drawing funds out of the banking system. When securities mature and the CBN repays investors, funds flow back to the holders.

In this case, the CBN repaid ₦2.408 trillion in matured OMO securities. Over the same period, banks’ deposits at the Standing Deposit Facility climbed above ₦6 trillion.

The deposits reached approximately ₦6.065 trillion on 14 October, eased to ₦6.044 trillion on 15 October and rose again to ₦6.083 trillion on 16 October. Banks therefore maintained placements above ₦6 trillion for three consecutive days.

The timing points to a connection between the repayment and the increase in deposits. However, the figures alone do not prove that all the money repaid through the OMO transaction went directly into the deposit facility.

Other transactions and movements within the financial system can also affect daily liquidity.

Why Having Cash Does Not Automatically Lead to More Lending 

The Standing Deposit Facility gives eligible banks a place to deposit surplus funds and earn interest. It also forms part of the CBN’s framework for managing short-term liquidity and interest rates.

For a bank, the decision to place funds with the apex bank involves more than simply having cash available. Banks weigh the returns on alternative investments against the risks, costs and expected returns associated with lending.

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Loans to businesses and individuals require credit assessments, and borrowers must be able to repay. Banks also consider their liquidity needs, regulatory requirements and other investment opportunities.

This means that a large deposit balance at the CBN does not automatically prove that banks are refusing to lend. It does, however, raise a useful question about how available liquidity is being allocated across the financial system.

For businesses seeking working capital and households looking for credit, the distinction matters. Money can be available within the banking system without translating immediately into more affordable or accessible loans.

Treasury bills absorbed only a fraction of the funds

At the Treasury bill auction held on 14 October, investors submitted bids worth approximately ₦1.032 trillion. However, only ₦269.06 billion was allotted, leaving roughly 74 percent of the subscriptions unaccepted.

The CBN’s daily liquidity figures recorded the corresponding primary-market sales on 15 October. The government also recorded ₦109.96 billion in primary-market repayments during the four-day period.

After accounting for the sales and repayments, net liquidity absorption through primary-market securities stood at ₦159.10 billion. Compared with the ₦2.408 trillion repaid through matured OMO securities, that amount was relatively small. The reported transactions therefore point to a substantial net release of liquidity, estimated at about ₦2.25 trillion.

Strong demand for Treasury bills did not result in an equivalent withdrawal of funds because the amount allotted was much smaller than the value of bids submitted.

What the numbers tell us about the banking system

Banks’ opening balances moved only modestly, rising from ₦195.08 billion on 13 October to ₦234.89 billion the following day before falling to ₦198.32 billion on 16 October.

There was also no reported borrowing through the CBN’s Standing Lending Facility during the period. The facility allows eligible banks to obtain short-term funds from the apex bank when they need them.

Taken together, the high deposit placements and absence of reported SLF borrowing indicate that banks were placing substantial funds with the CBN rather than seeking short-term financing from it during those days.

The figures offer a snapshot of liquidity management, not a complete explanation of banks’ lending decisions or the wider economy. Establishing whether the funds could have supported more private-sector lending would require additional evidence, including lending rates, loan demand, credit growth and banks’ risk assessments.

For now, the central issue is clear: the release of ₦2.408 trillion through matured OMO securities coincided with banks’ deposits at the CBN rising above ₦6 trillion. Treasury bill sales absorbed only a relatively small portion of the liquidity released.

The puzzle is not simply why Nigerian banks have so much money available. It is how that liquidity moves between the CBN, financial markets and the businesses and households that need credit.

Oluwabusolami Odunsi