The government has proposed giving the Maldives Monetary Authority (MMA) the power to designate a payment system as the country's National Payment Switch.

The bill, which began preliminary debate in Parliament today, seeks to amend the National Payment System Act to establish and operate a national payment switch and strengthen the Maldives' financial infrastructure.

The proposed amendment would insert a new provision after Article 15 of the Act, granting the MMA authority to designate a particular system as the National Payment Switch.

Under regulations made by the MMA, payment transactions would be required to be processed and routed through the designated switch.

The government's preferred payment system is currently Favara, which recently connected with India's Unified Payments Interface (UPI). Domestic transactions between banks in the Maldives are also processed through Favara.

The bill would require all payment service providers operating in the Maldives to participate in the National Payment Switch within a timeframe specified in regulations issued under the Act.

However, the MMA would be able to allow payment service providers to continue providing services through an interim arrangement.