Currency outside banks rises 104% in 3 yrs — CBN

•Demand deposits climb 71% •Analysts highlight cash dependence, financial inclusion challenges

Currency held outside the banking system by Nigerians rose by 103.8 per cent to N4.923 trillion in September 2026 from N2.416 trillion in September 2023, highlighting the persistent demand for physical cash despite the expansion of electronic payment channels in the country.

Data from the Central Bank of Nigeria, CBN, Money and Credit Statistics, also showed that currency outside banks increased by 10.3 per cent year-on-year from N4.465 trillion in September 2025 to N4.923 trillion in September 2026.

The figures indicate that cash held outside the banking system has more than doubled in three years, reflecting the scale of currency demand within the economy and the challenges facing efforts to deepen the use of formal banking and electronic payment systems.

A breakdown of the data showed that currency outside banks increased by 66.2 per cent from N2.416 trillion in September 2023 to N4.016 trillion in September 2024.

The figure subsequently rose to N4.465 trillion in September 2025, an increase of 11.2 per cent from the corresponding period in 2024, before climbing further to N4.923 trillion in September 2026.

According to analysts, the latest increase indicates that the preference for cash transactions remains significant, notwithstanding the growing adoption of mobile banking, electronic transfers, point-of-sale terminals and other digital payment platforms.

Demand deposits rise 71%

Meanwhile, demand deposits in the banking system increased by 70.8 per cent to N39.124 trillion in September 2026 from N22.903 trillion in September 2023.

The CBN data showed that demand deposits rose to N31.842 trillion in September 2024, representing an increase of 39.0 per cent against the corresponding period in 2023.

The figure climbed further to N34.642 trillion in September 2025, an increase of 8.8 per cent year-on-year, before rising to N39.124 trillion in September 2026, representing a 12.9 per cent increase over September 2025.

The growth in demand deposits indicates an expansion in funds held in bank accounts that are generally accessible for payments and withdrawals on demand.

Reacting to this data, Clifford Egbomeade, Economic and Communications expert, said: “The simultaneous increase in demand deposits and currency outside banks points to the coexistence of formal banking balances and substantial demand for physical cash in Nigeria’s payment system.

‘‘However, the two indicators measure different components of monetary activity. Demand deposits represent bank-account balances, while currency outside banks represents cash held outside the banking system.

‘‘Their growth rates alone do not establish how much of the increase in cash holdings is attributable to economic growth, inflation, informal transactions or changes in payment preferences.”(Vanguard)