The Central Bank of Nigeria has disclosed that bank customers withdrew a total of N923.16bn from bank vaults between May 2024 and May 2025, as reflected in its Money and Credit Statistics.
This figure highlights significant changes in the volume of currency held outside banks and the total currency circulating in the economy during the period.
As of May 2025, the currency held outside banks amounted to N4.63tn, up from N4.57tn in April 2025. This marks a 1.42 per cent increase month-on-month. When compared with May 2024, this shows a substantial rise of 25 per cent, from N3.71tn, indicating a sharp withdrawal of cash from the banking system.
The N923.16bn withdrawn by bank customers over the year is a clear indication of the growing trend of holding cash outside the banks. Currency in circulation, which includes both cash in banks and cash held outside, was recorded at N5.01tn in May 2025.
This represents a negligible decrease of 0.0002 per cent compared to the previous month, but a 26.45 per cent year-on-year increase, from N3.97tn in May 2024. It further demonstrates a growing demand for cash in the economy.
In terms of the proportion of currency held outside banks, this stood at 92.4 per cent of total currency in circulation in May 2025. This is slightly down from 93.8 per cent in April 2025, indicating a small shift towards holding more cash in the banking system.
A year ago, in May 2024, the proportion was 93.5 per cent. While the decrease is marginal, it still points to the persistent dominance of cash held outside the banks, a trend that continues to shape Nigeria’s financial landscape.
The significant rise in currency outside banks signals a growing preference for cash over digital banking channels, possibly driven by factors such as economic uncertainties, a lack of trust in the banking system, or a general preference for cash transactions.
The increase in the volume of withdrawals, amounting to N923.16bn, suggests that more Nigerians are opting to hold physical cash instead of saving or transacting through the formal banking sector.
Last month, The PUNCH reported that currency held outside Nigeria’s banking system declined for the second time in 2025, falling to N4.57tn in April from N4.60tn in March, according to new data from the Central Bank of Nigeria.
This renewed decline comes amid the apex bank’s continued hold on its benchmark Monetary Policy Rate at 27.5 per cent, a decision made during its May 2025 Monetary Policy Committee meeting.
Although the April figure still represented a 26.8 per cent year-on-year rise compared to the N3.61tn recorded in April 2024, the month-on-month decline of N26.4bn is considerable.
The downturn in currency outside banks began following the December 2024 festive season, when the figure peaked at N5.13tn, the highest level recorded in recent years. This seasonal surge, typical for year-end transactions, was quickly followed by a sharp decline in January 2025 to N4.74tn.
February saw the steepest drop in the year so far, falling to N4.52tn as post-holiday spending waned and monetary controls took firmer hold. March brought a temporary reversal, with currency outside banks ticking up slightly to N4.60tn, but by April that rebound had reversed and the total fell again to N4.57tn.
The April decline is especially relevant because it suggests the March rise was transitory rather than a sustained shift in trend.
From December to April, currency outside banks has declined by N555bn or 10.8 per cent, a strong indication that the central bank’s liquidity management tools are having an effect, particularly in curbing excess cash within the informal economy.
