Bank of Uganda Caps Over-the-Counter Cash Withdrawals, Slashes Cheque Limits in Digital Payments Push
KAMPALA, Uganda – In a sweeping move to accelerate the country’s shift toward a digital-first financial ecosystem, the Bank of Uganda (BoU) has announced new daily and weekly over-the-counter (OTC) cash withdrawal limits, alongside significant reductions in interbank cheque values.
The new regulations, outlined in a circular signed by Dr. Tumubweinee Twinemanzi, Executive Director of the National Payment Systems, will take effect on 1 January 2027, providing a six-month transition period for financial institutions and customers to adapt.
New Cash Withdrawal Caps
Effective 1 January 2027, all supervised financial institutions—including commercial banks, credit institutions, and microfinance deposit-taking institutions—will enforce the following OTC withdrawal limits:
Individual Accounts 50 million(daily cap) 250 million(weekly cap)
Corporate/Business Accounts 500 million(daily cap) 2.5 billion( weekly cap)
The BoU noted that the limits apply only to over-the-counter cash withdrawals. Digital channels, including the Real-Time Gross Settlement (RTGS) system, electronic funds transfers, and mobile money bank-to-wallet transfers, remain unrestricted.
Interbank Cheque Limits Halved
In a related intervention, the central bank has reduced interbank cheque value limits by 50% across all major currencies. The new limits are as follows:
Current Limit New Limit
UGX 10,000,000 5,000,000
USD 2,750 1,375
Euro 2,250 1,125
GBP 2,200 1,100
KES 300,000 150,000
Rationale: The Digital Shift
According to the BoU, the decision aligns with its e-payments strategy and broader national digitization agenda. Central bank data indicates that electronic credit transfers are now the number one payment method in Uganda, with digital payments continuing to grow in both volume and value.
“Consumers trust and prefer the efficiency of electronic payments,” the BoU noted in a public statement, emphasizing that the new measures are designed to foster a “cash-lite economy” and a “modern, digital-first financial landscape.”
Exceptions for Cash-Dependent Sectors
Recognizing that some sectors—such as agriculture and artisanal mining—remain heavily reliant on cash, the BoU has issued guidelines for exception management:
· Customer Risk Profiling: Supervised Financial Institutions (SFIs) must develop robust, risk-based customer profiles to determine appropriate withdrawal limits. SFIs will be required to demonstrate that limits are based on ongoing due diligence.
· Exceptional Approvals: Upon formal request from an SFI, the Bank of Uganda may discretionally waive the limits for specific transactions or sectors, conditional on a comprehensive risk assessment.
Promotion of Digital Alternatives
Financial institutions are mandated to proactively advise customers on available alternative digital channels, including RTGS, mobile and internet banking, and electronic funds transfers. The BoU has indicated that SFIs will be required to periodically demonstrate the effectiveness of their digital advisory efforts.
Public Awareness Campaigns
During the six-month transition period, the Bank of Uganda will coordinate comprehensive public awareness and information dissemination campaigns in collaboration with all stakeholders. The efforts will be led by the Director of National Payment Systems.
“Bank of Uganda will continue to support the development of an innovative, vibrant, inclusive and resilient payments ecosystem that supports socio-economic transformation,” the circular reads.
The central bank added that the OTC cash withdrawal limits will be revised from time to time in consultation with the industry.
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