Uganda’s Central Bank Introduces Cash Withdrawal Limits to Accelerate Digital Payments

Uganda’s central bank has unveiled new restrictions on over-the-counter cash withdrawals and lowered cheque transaction limits as part of a broader strategy to deepen digital payments adoption and reduce the country’s dependence on cash-based transactions.

In a circular dated May 29 and issued to commercial banks, credit institutions, and microfinance deposit-taking institutions, the Bank of Uganda (BoU) announced fresh cash withdrawal thresholds for individuals and businesses. The policy is expected to take effect from January 1, 2027.

Under the new framework, individual account holders will be restricted to a maximum of UGX50 million ($13,700) in daily cash withdrawals over the counter, with a weekly cap of UGX250 million ($68,500).

Corporate entities and business customers will face higher limits, with withdrawals capped at UGX500 million ($137,000) per day and UGX2.5 billion ($685,000) weekly.

Uganda Pushes Toward a Digital-First Financial System

The latest directive signals a stronger regulatory push toward a cash-lite economy, with authorities encouraging greater reliance on digital payment channels such as mobile money, internet banking, and real-time settlement systems.

According to the central bank, the move forms part of a wider effort to modernise Uganda’s financial ecosystem and improve transaction efficiency.

“These interventions align with our strategic commitment to fostering a modern, digital-first financial landscape by encouraging a shift from traditional paper-based instruments to secure electronic channels,” the Bank of Uganda stated in its circular.

The regulator added that a six-month transition window would be used to conduct nationwide public awareness campaigns and stakeholder engagement to ease implementation.

The initiative reflects broader regulatory policy efforts aimed at strengthening financial system efficiency, expanding digital inclusion, and improving financial compliance through more traceable payment channels.

Cheque Transaction Limits Also Reduced

Alongside the new withdrawal caps, the Bank of Uganda has introduced lower cheque transaction thresholds in a further effort to discourage paper-based payment systems.

Under the revised rules, Uganda shilling-denominated cheque limits will be reduced from UGX10 million ($2,740) to UGX5 million ($1,370).

Foreign currency cheque limits have also been adjusted downward:

• US dollar cheques: Reduced from $2,750 to $1,375
• Euro cheques: Lowered from €2,250 to €1,125
• Pound sterling cheques: Reduced from £2,200 to £1,100
• Kenyan shilling cheques: Cut from KES300,000 to KES150,000

The tighter thresholds reinforce Uganda’s broader transition away from paper instruments toward secure, technology-enabled financial services.

The policy direction also aligns with evolving regulatory technology trends, where governments and financial regulators increasingly deploy digital infrastructure to improve transparency, strengthen internal controls, and enhance regulatory monitoring.

Digital Payments Continue to Gain Momentum

The new measures come amid sustained growth in Uganda’s digital payments ecosystem.

Recent data from the Bank of Uganda showed that electronic money transactions increased by 28 per cent in 2025 to UGX366 trillion ($100.3 billion), while transaction volumes climbed 17.3 per cent to 9.1 billion transactions.

Mobile money usage also recorded strong growth during the period.

Transaction volumes rose 21.1 per cent to 301.1 million transactions, while transaction values surged 40 per cent to UGX66.1 trillion ($18.1 billion).

The expansion was supported by rising financial access, with the number of active mobile money users reaching 36.3 million customers. Uganda’s mobile money agent network also expanded significantly, growing 27.5 per cent to more than 1.16 million agents nationwide.

The figures highlight increasing consumer confidence in digital financial services and reinforce the role of technology-driven payment systems in supporting financial inclusion and economic modernisation across Africa.

As regulators across the continent continue to prioritise digital transformation, Uganda’s latest move could provide an important model for balancing regulatory compliance, secure payments, and broader financial system efficiency.