Maldives Monetary Authority (MMA) Governor Ahmed Munawar has held discussions with his Indian counterpart on advancing the integration of India’s Unified Payments Interface (UPI) with the Maldives’ Favara payment system, with merchant payment connectivity targeted for launch during the first half of 2027.
The discussions took place in New Delhi on October 19, when Governor Munawar met Reserve Bank of India (RBI) Governor Sanjay Malhotra on the sidelines of Samvad 2026, an international seminar organised by the Indian central bank.
According to the MMA, the meeting focused on strengthening financial cooperation between the two countries, including progress on cross-border digital payments and India’s continued support through an existing currency swap arrangement.
A key area of discussion was the proposed Person-to-Merchant (P2M) connection between UPI and Favara, which would enable users to make payments to participating merchants across the two countries.
The MMA said the connection is expected to be introduced during the first half of 2027, with the initiative intended to make transactions more convenient for tourists while supporting bilateral trade.
Once operational, the integration could allow Indian visitors to make payments at participating businesses in the Maldives through compatible digital payment services, reducing the need to rely exclusively on cash or conventional international card transactions.
The initiative is particularly relevant to the Maldives’ tourism industry, given India’s importance as a regional travel market and the increasing use of digital payments by consumers.
UPI, developed by the National Payments Corporation of India, is a real-time payment system that allows users to transfer funds and make merchant payments through participating banks and payment applications.
The platform has become a major part of India’s digital payments infrastructure and has been expanding its international reach through partnerships with overseas payment networks.
Favara, meanwhile, is the Maldives’ instant payment system, introduced by the MMA to facilitate electronic fund transfers between participating financial institutions.
The system forms part of the central bank’s broader efforts to modernise the country’s payment infrastructure, improve transaction efficiency and encourage greater use of digital financial services.
Connecting the two systems would represent a further step towards cross-border payment interoperability, allowing transactions to move more easily between the financial networks of the Maldives and India.
However, the MMA has not yet announced the detailed operating arrangements, participating financial institutions or transaction fees for the proposed merchant payment service.
The governors also discussed the INR 30 billion currency swap facility extended by India to the Maldives.
During the meeting, Governor Munawar expressed appreciation to the RBI for approving the first rollover of the facility, which is equivalent to approximately USD 360 million at an indicative exchange rate.
A currency swap arrangement allows central banks to exchange currencies under agreed terms, providing access to foreign currency liquidity when needed.
Such facilities can support external payment requirements and help central banks manage liquidity pressures, particularly in economies that depend heavily on imported goods and international financial transactions.
For the Maldives, access to external liquidity arrangements remains relevant because of the country’s substantial import requirements and the importance of foreign currency availability to its economy.
The rollover of the Indian rupee facility allows the arrangement to continue under its agreed terms, although the MMA’s announcement did not provide details of the revised maturity or utilisation of the facility.
Beyond the payment integration and currency swap arrangement, the two governors explored additional opportunities to strengthen institutional cooperation between the MMA and RBI.
The discussions reflect the broader financial relationship between the Maldives and India, which has included cooperation on payment infrastructure, financial sector development and monetary arrangements.
Governor Munawar was accompanied at the meeting by Mariyam Rashfa, Managing Director of Monetary Policy, Economics and Statistics at the MMA, and Abdulla Nasif, Deputy Manager of the authority’s Licensing Section.
The meeting took place during Samvad 2026, which brought together central banking representatives for discussions on monetary and financial sector issues.
With the UPI–Favara merchant payment connection now targeted for the first half of 2027, the focus will shift towards completing the technical and institutional arrangements required to introduce the service.
The planned integration is expected to provide an additional payment option for visitors and businesses, while strengthening financial connectivity between the Maldives and India.
