Favara and India’s UPI to be linked by July next year

Maldives’ instant payment system, Favara, will be linked with India’s Unified Payments Interface (UPI) and made operational by July next year, Maldives Monetary Authority (MMA) governor Ahmed Munawar said today.

Speaking at the launch of key economic sector development programmes at Barceló Nasandhura, Munawar said the integration would enable easier and more secure financial transactions between the two countries.

He said the connection would be facilitated through Payment Maldives and would link the country to international payment networks.

QR-code-based payments are expected to be introduced by April next year, he added.

UPI is India’s official digital payment platform and is widely used for everyday transactions, from large businesses to taxis and roadside vendors. A memorandum of understanding on linking Favara and UPI was signed by MMA in July.

The National Financial Inclusion Strategy was also launched at the event. The strategy was developed using findings from the 2022 National Financial Survey. Payment Maldives and Inclusive Green Finance initiatives were also introduced.

Citing MMA research, Munawar said many people remain unfamiliar with modern financial services, underscoring the need to improve financial literacy. He said the goals set out for the development of the financial sector were ambitious but achievable.

Under the new plan, the government aims to double the financial sector’s contribution to GDP from six percent to 12 percent over the next five years.

“To achieve this, we need to strengthen financial infrastructure and introduce state-of-the-art services,” Munawar said, adding that efforts would also focus on encouraging innovation while ensuring security.

According to the National Financial Inclusion Survey, 14 percent of women in Maldives do not have access to financial services. Munawar said insurance uptake and use of other financial products also remain low, while only 38 percent of elderly people use internet banking.

He said that older people are increasingly targeted by scammers, noting that police data showed MVR 1.2 million was stolen in 165 scam cases in November alone.

Munawar said the new initiatives would make financial services more accessible and extend coverage to more segments of the population.