Total sight deposits fell to 597.641 billion Swiss francs ($596.27 billion) from 619.77 billion francs in the previous week.
The 22 billion franc drop, which analysts said was caused by SNB bonds and reverse repurchase agreements (REPOs), was the fourth week of large reductions since the SNB tightened its monetary policy by hiking interest rates on Sept. 22.
The central bank declined to comment on Monday.
The SNB has been reducing liquidity to steer the market Swiss Average Rate Overnight (SARON) towards its new policy rate of 0.5%.
On Monday, the SARON was at 0.4377%.
To steer the rate, the SNB has also introduced a limit above which banks would not receive interest on their sight deposits.
Total reserves above 580 billion francs - equivalent to 28 times the commercial bank's minimum reserves - receive zero interest rather than the 0.5% SNB policy rate.
Each bank has their individual allowance, based on their minimum reserves level, so banks with sight deposits less than 28 times the minimum reserves can trade with banks who are above their level.
The SNB auctioned new bills on Friday, which will not be reflected in the figures, said Karsten Junius, an economist at J.Safra Sarasin.
This probably meant the bank was switching repos for longer-dated bills which can be used by banks as collateral.
He reckons the SNB would not want to absorb all the liquidity above the 580 billion franc interest-paying limit in order to stimulate interbank trading.
Credit Suisse economist Maxime Botteron agreed.
"In keeping some deposits at 0%, it gives banks an incentive to lend this liquidity to other banks and financial institutions, which supports activity in the money market.
"This contributes to a robust basis for the calculation of SARON, which is largely a transaction-based reference rate," he said.
($1 = 1.0023 Swiss francs)
(Reporting by John Revill; Editing by Emelia Sithole-Matarise)
