The Bank of Uganda (BoU) has introduced new limits on over-the-counter cash withdrawals, capping individuals at Shs 50 million per day and businesses at Shs 500 million in a major policy shift aimed at accelerating the country’s transition toward a cash-lite economy.
According to a circular issued to commercial banks, credit institutions and microfinance deposit-taking institutions, the new withdrawal limits will officially take effect on January 1, 2027.
Under the new guidelines, individuals will no longer be allowed to withdraw more than Shs 50 million in cash over the counter within a single day, while companies and corporate entities will be restricted to a maximum of Shs 500 million daily.
The central bank says the move is intended to reduce excessive dependence on physical cash transactions and encourage wider adoption of digital financial services such as internet banking, banking transactions or electronic transfers between accounts.
The policy is expected to significantly impact cash-intensive sectors of the economy, including wholesale trade, construction, agriculture and transport businesses, many of which still heavily rely on large physical cash transactions.
Kenneth Egesa, the director of Communications at Bank of Uganda, confirmed that the circular had already been distributed to supervised financial institutions to allow adequate preparation ahead of implementation.
Financial analysts say the new policy mirrors broader global efforts to modernize payment systems, improve transaction traceability and strengthen anti-money laundering controls.
However, some business owners have expressed concern that the restrictions could disrupt operations in sectors where digital payment infrastructure remains unreliable or inaccessible.
Uganda has in recent years witnessed a sharp increase in the use of mobile money and electronic banking services, with both government agencies and private institutions increasingly pushing for cashless transactions.
The new directive is expected to spark nationwide debate over financial inclusion, digital readiness and the practicality of reducing cash dependency in Uganda’s largely informal economy.
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