Uganda’s central bank caps cash withdrawals in digital payments push

Uganda’s central bank has imposed new limits on over-the-counter cash withdrawals and slashed cheque transaction thresholds in a sweeping push to accelerate the country’s transition to a cashless economy.

In a May 29 circular sent to commercial banks, credit institutions, and microfinance deposit-taking institutions, the Bank of Uganda (BoU) said individual customers will only be allowed to withdraw up to UGX50 million ($13,700) daily and UGX250 million ($68,500) weekly in cash over the counter. The new rules will take effect from January 1, 2027.

Businesses and corporate customers will face daily withdrawal caps of UGX500 million ($137,000) and weekly limits of UGX2.5 billion ($685,000).

The measures mark the clearest signal that Uganda’s financial regulators want to reduce the economy’s reliance on cash and move transactions onto digital payment rails such as mobile money, internet banking, and real-time settlement systems.

“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,” BoU said in the circular. 

“During this six-month transition period, the Bank of Uganda shall, in collaboration with all stakeholders, conduct comprehensive public awareness and information dissemination campaigns.”

The central bank is also tightening cheque usage limits, further discouraging paper-based payments.

Under the new rules, the maximum value for Uganda shilling-denominated cheques has been reduced from UGX10 million ($2,740) to UGX5 million ($1,370). US dollar cheque limits have been cut from $2,750 to $1,375, while euro cheque limits will fall from €2,250 to €1,125.

Pound sterling cheque limits have similarly been reduced from £2,200 to £1,100, and Kenyan shilling cheque limits from KES 300,000 to KES 150,000.

The restrictions come as digital payments continue to expand in the country. According to Bank of Uganda data, electronic money transactions grew 28% in 2025 to UGX366 trillion ($100.3 billion), while transaction volumes increased 17.3% to 9.1 billion transactions.

In 2025, mobile money transaction volumes rose 21.1% to 301.1 million transactions, while transaction values surged 40% to UGX66.1 trillion ($18.1 billion). The number of active mobile money customers climbed to 36.3 million, supported by an agent network that expanded 27.5% to more than 1.16 million agents nationwide.