The Bank of Uganda (BoU) has clarified that the new cheque limits do not apply to over-the-counter cheque withdrawals and cheque payments made within the same bank.
On July 14, 2021, Bank of Uganda reduced by half the maximum value that can be written on cheques to banks and other financial institutions from Shs20 million per transaction to Shs10m.
But on July 21, BoU Governor Emmanuel Tumusiime-Mutebile explained that the new rules exclude over-the-counter cheque withdrawals and intra bank payments.
“The new limits do not apply to over-the-counter cheque withdrawals, nor do they apply to cheque payments that are made within the same bank, that is, where the cheque issuer and the recipient hold accounts with the same commercial bank. The public is urged to use alternative electronic payment options, such as the Real Time Gross Settlement System (RTGS), Electronic Funds Transfer (EFT), and mobile money, among others,” Mr Mutebile said.
He added that they 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, the governor said.
“Bank of Uganda and the supervised financial institutions will continue to sensitise the public on the alternative payment options during the six-month window before the new limits come into effect. Bank of Uganda remains committed to the development of a vibrant, resilient, safe, and efficient payments system to promote financial inclusion and economic growth,” he added.
In a July 14 letter to all financial institutions, BoU said lowered the amount to be written on cheques from Shs20m to Shs10m.
The USD has been lowered from 5,500 to 2,750; the Euro from 4,500 to 2,250, the GBP from 4,400 to 2,200 and KES from 600,000 to 300,000
“In line with the provisions of Section 4.3 (b) of the Uganda clearing house rules and procedures, Bank of Uganda wishes to inform all clearing house participants of a downward revision to the cheque value limits for the currencies currently handled by the Clearing House,” BoU said in a statement.
“This follows a No Objection” received from the Uganda Bankers Association,” it added.