Three of the country's top banks now hold customer deposits that are enough to fund more than a third of the 2017/18 national budget.
According to the latest company filings by Kenya Commercial Bank (KCB), Co-operative Bank and Equity Bank, they have Sh923.4 billion in their books of accounts as customer deposits, most of which are non-interest-bearing.
This is a Sh75.4 billion or 8.89 per cent growth in deposits when compared to the full-year period ended December 31, 2015.
At the time, Central Bank of Kenya (CBK) supervision report put the total deposits of the three banks at Sh848 billion.
However, despite the amendment in the Banking Act that now requires banks to give customers at least 70 per cent per cent of the benchmark rate on their fixed deposits, the three banks are benefiting from cheap deposits.
CBK data for 2015 put the customer base for the three banks at 15.5 million, with Equity bank's base being the largest at 8.8 million customers.
In terms of increase in deposits, KCB leads with Sh386.6 billion after a growth of 38.6 billion or 11 per cent.
Equity Bank comes in second with Sh277.3 billion after recording an increase of Sh40.7 billion (17.2 per cent).
It is followed by Co-operative Bank with Sh259.5 billion in customer deposits, a marginal drop of 1.5 per cent.
This reinforces the findings by Sterling Capital Research, which in a report late last year found that most tier I banks get about 80 per cent of their funding from customer deposits.
According to a breakdown by KCB Group Chief Executive Joshua Oigara, three quarters (75 per cent) of the bank's source of funds is deposits, with 65 per cent of them being demand deposits
Despite the deposits growing by 11 per cent, interest paid on holding the money grew by just 10 per cent to Sh13.7 billion.
However, after paying the interest, the bank was able to make Sh42.9 billion as net interest income.
This is a growth of 28 per cent from last year.
For Equity Bank, 70 per cent of its deposits - an equivalent of Sh237.2 billion, is non-interest-bearing.
Just 30 per cent (Sh100 billion) is interest-bearing.
During the period under review, 17.2 per cent growth in deposit base only saw a 7.9 per cent growth in interest expense on customer deposits to Sh6.1 billion.
The bank made a net interest income of Sh35.1 billion, a 18.9 per cent growth.
Group Chief Executive James Mwangi has already indicated that in the wake of increased non-performing loans, the bank will use excess liquidity to invest in Government securities.
In the year ended December 31, 2016, the bank made Sh6.7 billion from selling Government paper, a jump of 87 per cent.
Cooperative Bank, which increased its interest income on Government securities by 39.6 per cent to Sh8.5 billion, on the other hand, saw a 5.9 drop in cost of funds as deposits dropped by just 1.9 per cent.