Bank of Uganda warns against use of currency in floral bouquets

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The Bank of Uganda has cautioned the public against practices that mutilate or deface Uganda Shilling banknotes.

In a public notice released on Monday, the central bank directed florists, gifting stylists and the general public to immediately cease the practice of pinning, gluing or taping Uganda Shilling notes into elaborate displays, especially for social events and gifting ceremonies, including kwanjulas, which are traditional marriage events.

According to the Bank of Uganda, such practices compromise the integrity of the currency and render banknotes unusable in cash processing equipment such as counting machines and automated teller machines, which are critical to the country’s cash distribution and banking system.

“The practice destroys the utility of banknotes, leading to their premature withdrawal from circulation and replacement at an avoidable cost to the public,” the bank said.

The central bank stressed that under the Bank of Uganda Act, wilfully defacing, mutilating, disfiguring or impairing any currency note or coin is a criminal offence.

Under the Penal Code Act, Chapter 128, Section 367 states that any person who melts down, breaks up or defaces currency, for example by stamping a name or mark on it, commits a misdemeanour. On conviction, that person is liable to imprisonment for up to six months, a fine not exceeding sh2,000, or both.

The Bank of Uganda noted that liability does not rest only with individuals handling cash, but also extends to businesses and service providers involved in practices that knowingly damage currency, including commercial gifting and decorative services.

While the central bank said it does not object to the use of cash as a gift, it emphasised that such exchanges must conform to the normal and lawful use of currency to facilitate payment transactions.

The notice was signed by Kenneth Egesa, director of communications and public relations at the Bank of Uganda.

The warning comes against the backdrop of rising costs associated with managing physical currency.

In the financial year ended June 30, 2025, the Bank of Uganda reported that the cost of printing new banknotes rose to sh193.8 billion, an 11.2 per cent increase from the previous year.

When combined with the coin minting costs of sh9.8 billion, total expenditure on managing the physical currency supply amounted to sh212.6 billion.

The central bank attributed much of the increase to the replacement of soiled or damaged notes rendered unusable through poor handling by the public, including wetting, crumpling, writing on banknotes and physical damage caused by adhesives, staples and pins.

In previous years, the Bank of Uganda issued similar warnings and worked with law enforcement agencies to curb deliberate damage to currency during commercial promotions, campaign activities and other non-standard uses of banknotes.

To mitigate rising currency management costs, the central bank phased out the Sh1,000 paper note in favour of more durable coins and is exploring the introduction of a Central Bank Digital Currency as part of broader efforts to modernise the national payment system and reduce the long term financial burden of printing and destroying physical cash.