This is a sign of easing reliance on the ECB for funds as investors return to the country's debt market.
Net debt to the ECB totalled €260 million ($340 million) in March, an 4.4 percent drop from the February figure, the Bank of Spain said.
It was the lowest amount since March 2012 when Spanish banks owed the ECB €227.6 billion, and well below the peak of €388.7 billion owed in August 2012, but more than double the €118.9 billion owed at the end of 2011.
Spanish lenders were practically shut out of international debt markets last year due to fears that the country may need a sovereign bailout and concerns over their balance sheets, which are loaded with piles of bad loans following the collapse of a property bubble in 2008.
But Spanish bank borrowing from the ECB has fallen steadily since the central bank chief Mario Draghi vowed last year to buy sovereign debt of eurozone countries that had requested aid.
Several Spanish banks, including Banco Sabadell and Bankinter, have started to repay loans they took from the ECB.
Spain secured a rescue loan in June 2012 of up to 100 €billion from its eurozone partners to underpin Spanish banks.