The Bank of Uganda (BoU) has introduced strict new cash withdrawal limits and reduced cheque transaction thresholds in a comprehensive effort to accelerate the country's transition to a cashless economy. The measures represent the most significant regulatory push yet to reduce Uganda's reliance on physical cash transactions.
Starting January 1, 2027, individual customers will face daily cash withdrawal limits of UGX50 million ($13,700) and weekly caps of UGX250 million ($68,500) for over-the-counter transactions. Businesses and corporate customers will be subject to daily withdrawal limits of UGX500 million ($137,000) and weekly restrictions of UGX2.5 billion ($685,000).
The new regulations were outlined in a May 29 circular distributed to commercial banks, credit institutions, and microfinance deposit-taking institutions across Uganda. The central bank announced a six-month transition period before the rules take effect.
Digital Payment Push Accelerates
The Bank of Uganda emphasized its commitment to modernizing the financial sector through digital transformation. The central bank aims to shift transactions from traditional paper-based instruments to electronic channels including 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.
The central bank also announced comprehensive public awareness and information dissemination campaigns during the transition period, working with stakeholders to ensure smooth implementation of the new restrictions.
Cheque Transaction Limits Slashed
Beyond cash withdrawal restrictions, the Bank of Uganda has significantly reduced maximum values for cheque transactions across multiple currencies. Uganda shilling-denominated cheques will be capped at UGX5 million ($1,370), down from the previous limit of UGX10 million ($2,740).
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 been reduced from £2,200 to £1,100, and Kenyan shilling cheque limits from KES 300,000 to KES 150,000.
Mobile Money Growth Drives Policy Shift
The regulatory changes come amid rapid growth in Uganda's digital payment ecosystem. Mobile money transaction volumes surged 21.1% to 301.1 million transactions in 2025, while transaction values increased dramatically by 40% to UGX66.1 trillion ($18.1 billion).
The number of active mobile money customers reached 36.3 million people, supported by an expanding agent network that grew 27.5% to more than 1.16 million agents nationwide. This infrastructure growth provides the foundation for the central bank's push toward cashless transactions.
Bank of Uganda data shows electronic money transactions across all platforms grew 28% in 2025 to UGX366 trillion ($100.3 billion), demonstrating strong adoption of digital payment methods. Transaction volumes increased 17.3% to 9.1 billion transactions, indicating both growth in user adoption and frequency of use.
"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 stated.
The new restrictions represent Uganda's most aggressive policy intervention to date in promoting digital financial services, positioning the country among African nations leading the transition away from cash-dependent economies.