Bank of Uganda caps counter cash withdrawals from 1 January 2027

In early June 2026 the Bank of Uganda sent a circular to commercial banks, credit institutions and microfinance deposit-taking institutions introducing limits on over-the-counter cash withdrawals. From 1 January 2027, withdrawals from individual accounts are capped at UGX 50 million a day and UGX 250 million a week; corporate accounts are capped at UGX 500 million a day and UGX 2.5 billion a week. The central bank framed the change as a step toward a cash-lite economy.

What is and is not covered

The limits apply to physical cash taken over a banking counter. The Bank of Uganda said electronic channels, including RTGS and EFT transfers, are unaffected, and the announcement does not impose new limits on mobile money. SoftPower News reported the bank's own figures: electronic credit transfers rose from 87.71 percent of transaction volume in FY2017/18 to 93.53 percent in FY2025/26, and the bank described them as the number one payment method.

Supervised institutions must build risk-based customer profiles, and some customers may receive lower limits based on their transaction patterns. Because some sectors still depend heavily on cash, institutions will be able to seek exceptions from the Bank of Uganda for particular customers. The Observer reported that business owners in wholesale trade, construction, agriculture and transport had raised concerns about weak digital infrastructure in their sectors.

Why a shop owner should care

Most small businesses never withdraw UGX 50 million in a day, so the cap itself will not bite. The direction of travel will. Banks have been told to profile customers by cash behaviour, and a business that deposits and withdraws large amounts of cash every week is the profile they are being asked to look at. The practical response is to move more of your takings and your supplier payments onto traceable rails before January, so the cash you do handle is small and explained.

Mobile money rules already in force

Two existing rules sit alongside the new caps. Since 2024, under the National Payment Systems Act and the agents regulations, any mobile money transaction of UGX 1,000,000 or more at an agent or operator centre must be completed only after the customer's identity is verified with a national ID, passport or refugee document. Business Times reported the Bank of Uganda's reason as a rise in the use of mobile money for fraud and scams. And from 1 July 2026 the Income Tax (Amendment) Act applies a 10 percent withholding tax on commissions paid for telecom and mobile money retail services, final for resident individuals, which affects anyone running an agency line alongside a shop.

Getting ready before January

• Accept more than cash at the till. Mobile money and card on every sale, with the payment method recorded against the receipt, so your bank deposits match your sales report.
• Pay suppliers electronically. A transfer with a reference is easier to reconcile than a bundle of notes, and it leaves the audit trail the bank and URA both want.
• Reconcile weekly. Match the mobile money statement, the bank statement and the till totals every week, not at year end.
• Talk to your bank now if your trade is genuinely cash-heavy. Exceptions are possible but they go through the institution, and the Bank of Uganda has said a sensitisation campaign runs from July 2026.

The bigger picture

Uganda is following a pattern already visible across the region: nudging money onto electronic channels where it can be seen, taxed and protected. For a business that is already recording every sale and paying suppliers from the books, the January change is a non-event. For one that still lives on cash, the next three months are the time to build the habit.

Sources

1. https://observer.ug/business/bou-caps-individual-cash-withdrawals/
2. https://softpower.ug/bank-of-uganda-sets-cash-withdrawal-limits-to-accelerate-shift-to-digital-payments/
3. https://businesstimesug.com/why-you-need-national-id-to-transact-sh1m-on-mobile-money/
4. https://www.ey.com/en_gl/technical/tax-alerts/uganda-issues-tax-amendment-acts-for-2026