Maldives and India launch Favara-UPI link for instant cross-border payments
NEW DELHI: The Maldives Monetary Authority (MMA) and NPCI International Payments Ltd (NIPL) have announced the successful integration of the Maldives' instant payment system, Favara, with India's Unified Payments Interface (UPI). The service went live on July 30, marking a significant step in digital financial connectivity between the two countries.
The Indian Finance Ministry, in a statement issued on Friday, described the development as a transformative milestone in cross-border digital financial connectivity and bilateral economic cooperation. Individuals in the Maldives can now transfer funds in real time to UPI-enabled bank accounts in India using their mobile banking applications, the statement said.
The service has initially been launched with two participating banks in the Maldives: Bank of Maldives Plc and Maldives Islamic Bank Plc. Customers of these banks can initiate person-to-person (P2P) transfers directly to UPI-enabled accounts in India through the Favara payment rail. The transfers are processed in real time, offering a faster and more convenient alternative to traditional remittance channels.
The integration is the result of collaborative efforts between the MMA, the Reserve Bank of India (RBI), NIPL, participating financial institutions, and other stakeholders in both countries. It reflects the deepening economic ties between the Maldives and India, which have expanded into digital infrastructure and financial services in recent years.
According to the statement, subsequent phases of the collaboration will introduce additional cross-border payment use cases, including QR-based merchant payments and other innovative digital payment services. These developments are expected to further strengthen economic and financial ties between the two nations, and could also benefit tourists and businesses on both sides.
UPI is already accepted in nine countries — Cambodia, Singapore, United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar, and Sri Lanka. This allows Indian travellers to make seamless payments abroad through UPI at participating merchants and outlets. The addition of the Maldives through the Favara corridor expands UPI's global footprint and offers similar convenience for Maldivian users sending money to India.
NPCI International Payments Ltd is a subsidiary of the National Payments Corporation of India (NPCI), which is an umbrella organisation for operating retail payments and settlement systems in India. NPCI was established as an initiative of the Reserve Bank of India and the Indian Banks' Association. It operates the UPI platform, which enables real-time payments between individuals and at merchant locations, and has been widely adopted across India for digital transactions.
The go-live of the Favara-UPI corridor is part of a broader trend of countries linking their payment systems to UPI to facilitate faster and cheaper cross-border transactions. For the Maldives, the integration offers its citizens a direct and efficient channel to send money to India, which is a major trade and tourism partner. For India, it reinforces the country's leadership in digital payment technologies and its commitment to fostering regional financial inclusion.
Observers note that the launch comes amid growing digital payment adoption in South Asia and the Indian Ocean region. The successful operation of the corridor could serve as a model for other bilateral payment integrations, promoting financial interoperability and reducing reliance on traditional banking intermediaries.
The Finance Ministry's statement did not specify any transaction limits or fees, but said that customers should contact their respective banks for details. The central banks of both countries are expected to monitor the system's performance and address any operational issues as the service expands.
