BOU to impose limits on over-the-counter cash withdrawals from January 1, 2027 A new Bank of Uganda policy seeks to push businesses and individuals towards electronic payments, but the transition will test the country’s digital infrastructure and financial readiness Kampala, Uganda | JULIUS BUSINGE | Bank of Uganda’s move to cap over-the-counter withdrawals marks a major shift in how businesses and individuals move money, but success will depend on infrastructure, trust and readiness The country’s decision to impose limits on over-the-counter cash withdrawals from January 1, 2027, is set to become one of the most consequential reforms in the country’s financial system in decades. BoU says the new policy will accelerate the transition towards a cash-lite economy, improve financial transparency and reduce the security and operational costs associated with handling large volumes of physical currency. But the move has also triggered debate over whether Uganda’s digital financial infrastructure is sufficiently mature to support a rapid shift away from cash, particularly among businesses, agricultural traders and the informal economy where physical money remains deeply embedded.
Commercial banks have broadly welcomed the directive, viewing it as a natural extension of years of investment in digital banking platforms. Economists agree with the policy’s broader objectives but caution that implementation will determine whether the reforms deliver their intended benefits or create new bottlenecks. Under the new framework, individuals will be permitted to withdraw a maximum of Shs50 million per day and Shs250 million per week over the counter.
Businesses and corporate entities will face limits of Shs500 million daily and Shs2.5 billion weekly. The restrictions apply only to physical cash withdrawals conducted at banking halls. Electronic transactions, including Real Time Gross Settlement (RTGS), Electronic Funds Transfers (EFT), internet banking, mobile banking and mobile money, will remain unaffected.
The central bank says the measures are aimed at encouraging greater use of digital payment channels while reducing the costs and risks associated with cash transportation, storage and security. A six-month transition period has been provided to allow banks, businesses and customers to adjust before the new rules take effect. Digital finance gains momentum The reforms co…
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