Uganda Lowers Bank Cheque Limits To boost e-Transactions

Uganda Lowers Bank Cheque Limits To boost e-Transactions

To shore up mobile money and electronic transactions in the country, the Bank of Uganda has announced that it will lower cheque value limits for amounts above the equivalent of about $2,800 in local and foreign currency starting Jan. 15.

BoU has lowered the limits on the value for cheque payments to promote e-payments. Effective January 15, 2022, cheques for amounts that are above the new limits will not be honoured.
— Bank of Uganda (@BOU_Official) January 10, 2022

“The Bank of Uganda has lowered limits on the value of cheque payments to promote e-payments. The public is urged to use alternative electronic payment options such as electronic funds transfer and mobile money, among others,” governor of the Bank of Uganda, Emmanuel Tumusiime-Mutebile said in the Jan.10 notice.

For Uganda, new research shows that the value of the country’s mobile money sector of about 27 million registered accounts, has topped $46 billion and is projected to grow at a compounded annual average growth rate of 26.6% over the next five years.

It is against this backdrop that the Bank of Uganda is seeking to drum up further usage of electronic and digital payments instead of cheque payments for both local currency and foreign currency transactions.

The covid-19 pandemic and attendant lockdown have led to increased use of electronic payment across Africa and this trend is bound to continue. This increase in digital transactions has led some banks to close their branches, intending to focus on a more digital approach to banking.

This is affecting cheque payments that traditionally require one to visit physical bank branches. The push for faster payment settlements is also acting against cheque payments which take lengthy periods to process and settle.