The amount banks will repay on January 29 is more than this week's repayments of 991 billion euros and twice the 1.8 billion forecast in a Reuters poll.

The speed with which banks repaid the long-term loans they took from the ECB in late 2011 and early 2012 to ride out a period of strained funding conditions accelerated towards the end of last year, which was the cut-off point for an ECB snapshot of banks' balance sheets that it will assess this year.

ECB President Mario Draghi has pointed to the possibility of some short-term deleveraging as banks prepare for the assessment, which will look at whether lenders have set aside sufficient capital to cope with the risk on their books.

Such developments should, however, be seen in a longer-term context, Draghi added, saying that by the end of this year, the banking system would be stronger and more transparent.

But the paybacks have slowed down again this year, and this also slows a drain in excess liquidity, keeping the upward pressure on bank-to-bank lending rates under control at a time when the euro zone recovery is slowly beginning to take hold.

Excess liquidity, or cash beyond what lenders need to cover their day-to-day operations, stood at 161 billion euros on Friday.

Although the connection between money market rates and excess liquidity is difficult to pin down, Draghi stressed last week that the ECB would monitor developments closely and was ready to consider all available instruments.

On Friday, the ECB said seven banks would repay 3.4969 billion euros from the first LTRO on January 29, and two banks would pay back 202 million from the second LTRO.

(Reporting by Frankfurt newsroom; Editing by Alison Williams)