For many Nigerians, domiciliary accounts were built on a simple promise: hold foreign currency safely inside the banking system and avoid the instability of the naira.

That promise still exists on paper, but in practice, access to those funds has become less predictable, shaped by liquidity conditions, policy changes, and how foreign currency moves through the banking system.

Today, dollars still appear in account balances and the challenge is not always whether the money exists, but whether it can actually be reached when needed.

Dollars in the system, limited access in practice

Nigeria's banking system continues to hold significant foreign currency positions. Domiciliary deposits form part of a broader pool of foreign assets managed within the financial system, alongsidegross external reserves that rose to $45.71 billion by end-2025, according to CBN Governor Olayemi Cardoso.

But those figures do not translate into guaranteed cash availability for individuals.

Banks do not keep all domiciliary deposits as physical cash in branches. A portion is managed through external liquidity and correspondent banking arrangements under regulatory guidelines. This means what appears on a statement is not the same as cash that can be immediately withdrawn at any branch.

As a result, access often depends on liquidity conditions at individual banks. When demand rises or supply tightens, customers may be told to wait, regardless of their account balance.

A cycle of changing rules

Over the past several years, domiciliary account operations have moved through repeated regulatory adjustments.

In 2021, the Central Bank of Nigeria introduced restrictions that affected how cash deposits could be used and how transfers were processed, creating distinctions based on how funds entered an account.

In 2023,the CBN directed banks to ease access to domiciliary balances and allow higher withdrawal limits, including a $10,000 daily cash threshold. However, in many cases, physical dollar availability did not match the policy intent.

By 2024, additional restrictions affected how foreign currency deposits could be used in lending arrangements, forcing businesses to restructure financing strategies.

Further guidelines also introduced tighter controls on large foreign currency cash deposits, particularly high-denomination notes, under compliance and anti-money laundering measures.

Each adjustment changed how accounts functioned in practice, but did not fully resolve the underlying issue of liquidity.

Why access remains inconsistent

The core issue lies in how foreign currency is handled within the banking system.

Dollars in domiciliary accounts are not stored as idle cash in branches. Banks manage portions of FX through external liquidity and correspondent banking arrangements in line with regulatory frameworks.

This structure creates a gap between recorded balances and physical availability.

When customers request withdrawals, banks depend on available cash positions at that time. If liquidity is tight, access becomes delayed or limited, even when balances are sufficient.

The remittance shift that reduced inflows

For many users, domiciliary accounts were sustained largely through international remittances rather than cash deposits.

That channel has changed.

A Central Bank directive effective from May 1, 2026 requires International Money Transfer Operators to route inflows through naira settlement systems. In many cases, remittances are now disbursed in naira under this framework.

This adjustment affects a major inflow stream.Nigeria received $20.93 billion in remittances in 2024, an 8.9 percent increase on the prior year and the highest total in five years, making it one of the most important sources of household foreign currency support.

With reduced direct dollar inflows, it has become harder for many account holders to fund domiciliary accounts in foreign currency without sourcing cash independently.

A product defined by access, not balance

Domiciliary accounts still function within the banking system. Balances are recorded, transfers are processed, and foreign currency positions are maintained.

But their usefulness now depends less on account ownership and more on access conditions at any given time.

Funding has become more restricted, withdrawals depend on liquidity availability, and remittance inflows no longer reliably arrive in foreign currency.

This has shifted the role of domiciliary accounts from a flexible savings tool to a more conditional holding system.

Conclusion

Domiciliary accounts remain part of Nigeria's financial structure, holding significant foreign currency value within the system.

But the experience for many users has changed.

Between evolving regulations, limited physical liquidity, and reduced direct foreign inflows, access has become less consistent than the original promise suggested.

The dollars challenge is no longer their existence, but their availability when they are needed.