Issue of Currency
The Government has given the Bank of Uganda the sole right to issue banknotes and coins in the country. The Bank ensures that sufficient currency is readily available to meet demand.
Managing quality of banknotes and coin in circulation
Firstly, the used banknotes issued by the branches of the Bank must be capable of being mechanically handled by cash receiving and/or dispensing machines.
Secondly, the quality of used banknotes should be acceptable to members of the public when paid to them by the tellers of commercial banks.
In order to manage the quality of banknotes placed into circulation, all banknotes deposited at the branches of the Bank are processed on electronic banknote processing machines.
The Bank ensures the availability and adequacy of banknotes and coins throughout the country.
The Bank will reimburse mutilated banknotes and coins which are not willfully damaged. Such banknotes and coins can be deposited/ exchanged at the commercial banks or Bank of Uganda branches.
The Bank is responsible for the bulk distribution of banknotes and coin and in order to fulfill this function currently operates branches in Kampala, Jinja, Mbale, Gulu, Mbarara, Masaka, Arua, Fort Portal and Kabale.
The main functions of the branches are to accept bulk deposits, effect withdrawals and process banknotes deposited, to ensure that adequate banknotes of acceptable quality are available for re-circulation. Banknotes not meeting the required quality standard are destroyed. The branches also ensure that new banknotes are circulated in all the geographical regions of Uganda.
Members of the public have access facilities at the branches for the replacement of mutilated banknotes and exchange.