Cash held outside Nigeria’s banking system declined to ₦4.92 trillion in June 2026, the lowest level in seven months, according to the latest Money and Credit Statistics released by the Central Bank of Nigeria (CBN), signalling a gradual return of physical cash to the formal banking system.
Key Highlights:
- Cash outside banks fell to ₦4.92 trillion in June 2026, the lowest level since November 2025.
- The figure represents a ₦485.8 billion (8.98%) decline from December 2025.
- Total currency in circulation also dropped by ₦209.56 billion to ₦5.52 trillion.
- Nearly 89.11% of all currency in circulation remains outside the banking system.
- CBN targets reducing cash outside banks to below 40% under the Nigeria Payment System Vision (PSV) 2028.
Data analysed from the CBN report show that currency outside banks declined from ₦5.41 trillion in December 2025 to ₦4.92 trillion in June 2026, reflecting an 8.98 per cent decrease over six months.
The latest figure marks a significant retreat from the elevated cash levels recorded at the end of 2025, suggesting that more physical currency is gradually returning to commercial banks as the apex bank intensifies efforts to promote digital payments and reduce dependence on cash transactions.
While cash outside banks recorded a sharp decline, total currency in circulation fell more modestly from ₦5.73 trillion in December 2025 to ₦5.52 trillion in June 2026, representing a reduction of ₦209.56 billion, or 3.66 per cent.
The faster decline in currency held outside banks indicates that a larger share of physical cash was deposited back into the banking system rather than permanently withdrawn from circulation.
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However, the trend was not entirely consistent throughout the period. Cash outside banks declined steadily from January to April before rising slightly to ₦5.19 trillion in May. The increase proved temporary, as the figure dropped sharply by ₦270.97 billion, or 5.22 per cent, in June, marking the largest monthly decline during the period under review.
Despite the improvement, Nigeria remains heavily dependent on cash transactions. Analysis shows that 89.11 per cent of all currency in circulation remained outside banks in June 2026, compared with 91.27 per cent in May and 89.74 per cent in June 2025.
This means that for every ₦100 in circulation, approximately ₦89.11 was still held outside the banking system in June, underscoring the continued dominance of cash, particularly within the informal economy.
Compared with December 2025, when 94.33 per cent of currency in circulation was held outside banks, the June figures show a gradual improvement in formal financial intermediation. The proportion of cash retained within banks almost doubled from 5.67 per cent to 10.89 per cent during the period.
Although instant payment platforms, mobile banking, fintech services and agent banking continue to expand rapidly, cash remains the preferred means of payment for retail trade, transportation, informal businesses and rural economic activities.
The CBN has reiterated its commitment to accelerating Nigeria’s transition to a digital economy through the Nigeria Payment System Vision (PSV) 2028. The initiative aims to reduce currency outside banks to below 40 per cent of total currency in circulation while expanding digital payment infrastructure nationwide.
As part of the strategy, the apex bank plans to deploy more than 10 million QR-code and tap-to-pay acceptance points across markets, transport hubs, commercial centres and rural communities to promote financial inclusion and reduce reliance on physical cash.
