KAMPALA — The Bank of Uganda (BoU) has announced new limits on over-the-counter cash withdrawals from commercial banks and other supervised financial institutions, a move aimed at accelerating Uganda’s transition towards a digital payments economy.
The new policy, which takes effect on January 1, 2027, will cap cash withdrawals at Shs50 million per day for individual account holders and Shs500 million per day for corporate accounts.
In a statement issued on Wednesday, the central bank said the decision was informed by changing consumer behaviour and growing adoption of electronic payment systems across the country.
“We are introducing limits to how much cash can be withdrawn over the counter from the financial institutions we supervise starting 1 January 2027,” Bank of Uganda said.
“Withdrawals from individual accounts will be capped at UGX 50 million per day and at UGX 500 million per day from corporate accounts.”
Under the new framework, individual customers will also be limited to Shs250 million in cash withdrawals per week, while corporate entities will be restricted to Shs2.5 billion per week.
The central bank clarified that the restrictions will apply only to physical cash withdrawals conducted over banking counters and will not affect electronic transactions conducted through digital payment channels.
“According to our data, payments have undergone a digital shift and electronic credit transfers are the number one payment method,” the Bank said.
“Digital payments continue to grow in volume and value, indicating that consumers trust and prefer their efficiency.”
Digital Transactions Exempt
The Bank emphasised that high-value transactions conducted through electronic payment systems, including Real Time Gross Settlement (RTGS) and Electronic Funds Transfers (EFTs), will continue without the newly announced limits.
Financial institutions have also been directed to encourage customers to embrace alternative payment channels such as mobile money, EFTs and bank-to-wallet transfers.
According to the regulator, the move is part of a broader strategy to modernise Uganda’s financial system, improve transaction efficiency and reduce the risks associated with large cash transactions.
Exceptions for Certain Sectors
Recognising that some sectors of the economy continue to rely heavily on cash transactions, the central bank said provisions have been made for exceptions.
“Because some sectors still depend heavily on cash, financial institutions will be able to seek exceptions for certain transactions or sectors,” the statement noted.
Under the guidelines, supervised financial institutions will be required to establish risk-based customer profiles, with some customers potentially assigned lower withdrawal limits depending on their transaction patterns and risk assessments.
Banks will also be able to submit requests to the central bank seeking exemptions for specific sectors or transactions where large cash withdrawals remain necessary.
Public Sensitisation Campaign Planned
To prepare customers and businesses for the transition, the Bank of Uganda said it will launch a nationwide public awareness campaign beginning in July 2026.
The campaign will focus on educating consumers and businesses about available digital payment alternatives and the practical implications of the new withdrawal regime.
Data Shows Growing Digital Adoption
The policy is backed by data collected through the country’s Automated Clearing House system, which indicates a significant shift from cash-based transactions to electronic payments over the past decade.
According to the Bank, the volume of electronic credit transfers increased from 87.71 percent of transactions in the 2017/18 financial year to 93.53 percent in 2025/26. The value of those transactions also rose from 79.33 percent to 93 percent over the same period.
The regulator further noted that mobile money has become an increasingly important component of Uganda’s payments ecosystem, accounting for an average of about 25 percent of annual transaction activity since the 2020/21 financial year.
The announcement marks one of the most significant changes to Uganda’s cash management framework in recent years and reflects a broader global trend toward digital financial services, as regulators seek to improve efficiency, transparency and financial inclusion in the banking sector.