Bank of Uganda slashes cheque limits, caps cash withdrawals in push for digital payments

June 3, 2026 in Business, Finance, Financial Services, Policy by Editor

Bank of Uganda has cut interbank cheque limits by 50 percent and introduced over-the-counter cash withdrawal caps as part of a wider push towards a cash-lite, digitally driven economy.

The Bank of Uganda (BoU) has announced sweeping changes to cheque transaction limits and over-the-counter (OTC) cash withdrawals as part of its strategy to accelerate the country’s transition towards a digital-first financial system.

In a circular dated May 29, 2026, and addressed to chief executives of commercial banks, credit institutions and microfinance deposit-taking institutions, the central bank said it would significantly reduce interbank cheque value limits while introducing new caps on cash withdrawals conducted at banking halls.

According to the directive, the maximum value for interbank cheques denominated in Uganda shillings will be reduced by half, from UGX 10 million to UGX 5 million. Similar reductions have been applied to foreign currency cheques, with limits for US dollar, Euro, Pound Sterling and Kenyan Shilling transactions also cut by 50 percent.

The Bank of Uganda said the measures are aligned with its e-payments strategy and broader national digitalisation agenda, which seeks to promote a cash-lite economy and encourage greater use of secure electronic payment channels.

“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,” the circular states.

The new framework also introduces cash withdrawal limits for customers accessing funds directly from bank counters. Individual account holders will be restricted to daily cash withdrawals of UGX 50 million and weekly withdrawals of UGX 250 million. Corporate and business accounts will face daily limits of UGX 500 million and weekly caps of UGX 2.5 billion.

Industry observers say the move reflects growing efforts by regulators to reduce the costs and risks associated with cash handling while increasing the adoption of electronic transfers, mobile money, real-time payments and other digital financial services.

The central bank has provided a transition period before implementation. The revised cheque limits and cash withdrawal caps will take effect on January 1, 2027, allowing banks and customers time to adjust and clear existing instruments.

The reforms are expected to have significant implications for businesses that still rely heavily on cheque payments and large cash transactions, while potentially accelerating Uganda’s shift towards a more digitised payments ecosystem.