Uganda’s big bet against cash

What the report says

The Independent Uganda reports that the Bank of Uganda will introduce caps on over-the-counter cash withdrawals from January 1, 2027, in a policy intended to steer the country toward more electronic payments. The central bank’s new framework will limit individuals to Shs50 million a day and Shs250 million a week in physical cash withdrawals at banking halls, while businesses and corporate entities will be capped at Shs500 million daily and Shs2.5 billion weekly.

The limits will not apply to electronic channels such as RTGS, EFT, internet banking, mobile banking or mobile money. According to the report, BoU says the measure is designed to reduce the cost and risk of moving, storing and securing cash, while improving transparency in financial transactions. A six-month adjustment period is planned for banks, companies and customers before enforcement begins.

The Independent says banks have largely supported the directive, seeing it as a continuation of investment in digital services. Stanbic Bank Uganda said it had prepared compliance systems and expects more corporate and SME customers to move toward digital payment options. NCBA Bank Uganda’s chief executive Mark Muyobo also argued that banking is shifting toward convenience and mobile access, while noting that physical branches are still likely to remain part of the system.

The report also highlights concerns about readiness. Uganda’s FinScope 2023 figures cited by The Independent show financial inclusion rising to 81% of adults, with mobile money used by 66%, but active use of bank-led mobile or internet banking at only 9%. That gap matters because cash remains important in agriculture, wholesale trade, construction and the informal economy, where the policy could reshape day-to-day liquidity and payments.