BoU Limits Cheques, Cash Withdrawals to Encourage Digital Payments

The Bank of Uganda has reduced interbank cheque value limits and introduced new over-the-counter (OTC) cash withdrawal caps as part of efforts to accelerate the country’s transition to a cash-lite economy. In a circular dated May 29, 2026, addressed to chief executive officers of commercial banks, credit institutions, and microfinance deposit-taking institutions, the central bank said the move is anchored in its broader e-payments strategy and national digitisation agenda.

“In line with the Bank of Uganda (BoU) e-payments strategy, which aims to promote a cash-lite economy as part of the broader national digitization agenda, Bank of Uganda has reduced the interbank cheque value limits and introduced over-the-counter cash withdrawal caps,” the circular reads.

Under the revised framework, the interbank cheque limit for transactions in Ugandan shillings has been reduced from UGX 10,000,000 to UGX 5,000,000. Similar reductions have been applied across major foreign currencies, including the US dollar, euro, British pound, and Kenyan shilling. The new OTC cash withdrawal limits are also significantly lower for some transaction categories. 

Individual account holders will now be limited to a daily withdrawal cap of UGX 50 million, while corporate and business accounts will have a limit of UGX 500 million. Weekly limits have been set at UGX 250 million for individuals and UGX 2.5 billion for corporate accounts. The changes are set to take effect on January 1, 2027, giving financial institutions a transition period to adjust existing systems and customer processes.

“The new limits shall take effect from 1st January 2027, allowing sufficient time for all existing instruments to be presented for payment,” the Bank of Uganda said. The central bank has directed supervised financial institutions (SFIs) to adopt stronger customer risk profiling systems to determine cash withdrawal limits.

“SFIs shall maintain robust and regularly reviewed risk-based customer profiles, and it is these that shall inform the setting of cash withdrawal limits for individual and business customers,” the circular states. 

It adds that institutions must be able to demonstrate that withdrawal limits are based on ongoing due diligence. In exceptional cases, the Bank of Uganda said it may grant waivers under strict conditions.

“Upon formal request from an SFI, the Bank of Uganda may, at its discretion, waive the limits for specific transactions or sectors; but this shall be conditional on comprehensive risk assessment and customer due diligence,” the circular adds. 

The central bank further directed financial institutions to actively promote electronic payment systems, including Real-Time Gross Settlement (RTGS), mobile, and internet banking services.“SFIs are expected to demonstrate how they are providing or making available to their customers alternative channels for digital payments,” the circular notes.

During a six-month transition period, the Bank of Uganda said it will work with stakeholders to carry out public awareness campaigns to support the shift.“These public engagements shall be coordinated by the Director of National Payment Systems,” the circular states. 

The central bank added that the limits may be reviewed periodically depending on sector needs and policy direction. The circular was signed by Tumubweinee Twinemanzi (PhD), Executive Director, National Payment Systems at the Bank of Uganda.