BoU caps individual cash withdrawals at Shs50m, businesses at Shs500m

The Bank of Uganda has issued new cash withdrawal limits for bank customers. In a May 29 circular to commercial banks, credit institutions, and microfinance deposit-taking institutions, BoU capped daily cash withdrawals at UGX50 million for individuals and UGX500 million for businesses. The rules take effect January 1, 2027. 7464

The move is part of BoU’s push to reduce cash in circulation and accelerate digital payments across Uganda.

The New Withdrawal Limits Explained

For Individual Customers
1. Daily limit: UGX50 million ~ $13,700 over the counter
2. Weekly limit: UGX250 million ~ $68,500
This applies to cash withdrawals across the counter. Walk-in customers with cheques and remittance recipients are also covered. 746439cf

For Businesses & Corporate Customers
1. Daily limit: UGX500 million ~ $137,000
2. Weekly limit: UGX2.5 billion ~ $685,000
The higher limits recognize operational cash needs for payroll, suppliers, and trade. 7464

Why BoU Introduced the Caps

BoU hasn’t published full reasons yet, but similar moves by other central banks point to 3 goals:

1. Boost digital payments: Mobile money, bank transfers, and cards cost less to manage than physical cash. Kenya and Nigeria have used withdrawal caps to push cashless transactions.
2. Reduce cash-related crime: Large cash movements are harder to track. Limits help fight money laundering + theft.
3. Manage currency circulation: Uganda’s currency in circulation hit Shs8.9 trillion recently. Capping withdrawals helps BoU control liquidity.

What This Means for You

If you’re an individual:
– UGX50M daily is still high for most personal use – rent, school fees, medical bills.
– For amounts above the limit, BoU expects use of RTGS, EFT, mobile money, or cheques.
– The cap applies “over the counter”. ATM limits may be separate and set by your bank.

If you run a business:
– UGX500M daily should cover most SME operations.
– Payroll + large supplier payments will need to shift to bank transfers to avoid delays from Jan 2027.
– Banks will likely require prior notice for large cash withdrawals to manage liquidity. 793b

Comparison with Other Countries

Uganda joins a regional trend:
1. Kenya: CBK previously capped cash deposits/withdrawals at Shs1M, now reviewing rules
2. Nigeria: CBN set weekly limits of N500k individuals / N5M corporates from Jan 2026, with 3%-5% fees for excess
3. Ethiopia: NBE caps at 200,000 Birr daily individuals, 300,000 Birr businesses
4. South Sudan: BoSS capped all withdrawals at SSP10M 75c9d9ae39cf0b4e

Exceptions & Implementation

BoU’s circular allows flexibility “in extraordinary cases”. Banks will need approval processes for emergencies like medical evacuations or disaster response. b0e1

Implementation starts Jan 1, 2027. That gives banks 18+ months to upgrade systems and educate customers on digital alternatives.

FAQ

Does this affect mobile money withdrawals?
The circular targets banks, credit institutions, and MDIs. Mobile money agents may have separate limits set by BoU/UCC.

Will there be penalties for exceeding limits?
BoU hasn’t announced penalties yet. Nigeria’s CBN charges 3% individuals / 5% corporates on excess. Uganda may adopt similar fees. 035e

Can I withdraw more with prior notice?
Likely yes. Banks already ask for notice on large cash orders. BoU’s “extraordinary cases” clause suggests approvals will be possible. b0e1

Is this the end of cash in Uganda?
No. Cash remains legal tender. BoU just wants less dependence on it. Digital payments have grown 40%+ yearly, but cash is still king in rural areas.