Maldives Links Favara System to India’s UPI for Instant Cross-Border Payments

The Maldives Monetary Authority (MMA) has officially launched a landmark cross-border payment service, linking the national payment system, "Favara," with India’s Unified Payments Interface (UPI). This integration makes the Maldives one of the few nations globally—joining the likes of Singapore and Nepal—to connect its domestic payment infrastructure with India’s digital payment giant. Inaugurated by MMA Governor Ahmed Munawwar, the service was launched at a ceremony attended by Foreign Minister Iruthisham Adam and Indian Ambassador G.K. Balasubramanian. The initiative is the result of a strategic partnership between the MMA, the Reserve Bank of India (RBI), and NPCI International Payments Limited (NIPL). In the initial rollout, customers of the Bank of Maldives (BML) and Maldives Islamic Bank (MIB) can now send funds directly to UPI-linked accounts in India via mobile or internet banking. The system simplifies international remittances by automatically converting MVR or USD into Indian Rupees (INR), credited instantly to the recipient's account. The MMA emphasized that the process is designed to be as secure and intuitive as a local transfer. To ensure transparency, users are presented with real-time exchange rates, applicable bank fees, and the recipient’s authenticated name before finalizing any transaction. Currently, the service is restricted to person-to-person (P2P) transfers for specific purposes, including family support, educational expenses, and medical costs for long-term visa holders. In accordance with foreign exchange regulations, the MMA has set a monthly transfer limit of INR 24,000 (approximately USD 250) per customer, although individual banks may implement lower caps. Looking ahead, the MMA confirmed that a second phase is already in development. This upcoming expansion will introduce person-to-merchant (P2M) transactions, enabling Maldivian travelers and businesses to make seamless payments in India using QR codes. By integrating with UPI—a system that processed over 241 billion transactions between 2024 and 2025—the Maldives aims to reduce the cost and time associated with international finance. This move marks a pivotal step in aligning the Maldivian economy with some of the world's most advanced digital financial ecosystems.