Following excess liquidity in the financial sector, banks’ deposit with the Central Bank of Nigeria (CBN) stood at N91.1 trillion in May 2026, about 0.4 per cent decline from N92.32 trillion in April 2026.
Banks deposit excess cash with CBN using the Standing Deposit Facility (SDF) window and it comes with attractive interest overnight, making it a preferred option for banks to earn risk-free returns.
The financial data released by the CBN revealed that Nigerian banks’ deposited about N128.92 trillion in March 2026. In February 2026, banks deposit with CBN stood at N61.11 trillion or 16.18 per cent increase when compared to N52.6 trillion deposited in January 2026.
In the first five months of 2026, banks deposited an estimated N425.86 trillion, an increase of over N53.5 trillion in the first five months of 2025.
THISDAY had reported that an estimated N336.2 trillion was deposited with the CBN in 2025, about 777.2 per cent YoY increase over N38.33 trillion deposited in 2024.
The decision by banks to reduce deposits with the CBN can be attributed to the recent cut in the Monetary Policy Rate (MPR) to 26.50 per cent in February 2026 from 27 per cent 2025.
Also, this was driven by the lower opportunity cost of holding cash with the CBN compared to lending it out in the market.
The Monetary Policy Committee (MPC) of the CBN in February 2026 had retained the Standing Facilities Corridor around the MPR at +50/-450 basis points.
