Maldives set to implement India’s UPI, boosting digital transactions and economic growth

Maldives President Mohamed Muizzu has initiated key actions to bring India's Unified Payments Interface (UPI) to the Maldives, a decision expected to significantly benefit the country's economy. UPI, developed by the National Payments Corporation of India (NPCI), is a real-time payment system that facilitates instant inter-bank transactions via mobile devices.

On Sunday, Muizzu formed a consortium to manage the introduction of UPI in the Maldives, appointing TradeNet Maldives Corporation Limited as the lead agency, according to a statement from the President's Office. The president encouraged participation from the country’s banks, telecom providers, state-owned entities, and fintech companies to ensure smooth implementation. This initiative stems from a Cabinet recommendation to strengthen the nation's digital economy. "This move is expected to bring significant benefits to the Maldivian economy, including increased financial inclusion, improved transaction efficiency, and stronger digital infrastructure," the statement said.

Additionally, Muizzu established an inter-agency coordination team involving the Ministry of Finance, Ministry of Homeland Security and Technology, and the Maldives Monetary Authority. This team will work with the Ministry of Economic Development and Trade to oversee the project. The decision to implement UPI follows an agreement reached during Indian External Affairs Minister S. Jaishankar’s visit to the Maldives in August.

Meanwhile, the Maldives, struggling with a foreign currency shortage, recently introduced new regulations to control foreign exchange transactions within tourism establishments and banks. The Maldivian economy has faced challenges following calls for Indian tourists to avoid the island nation in response to Muizzu's previous 'India Out' campaign.

Muizzu, who won the presidential election on an anti-India platform, initially pushed for the withdrawal of Indian military personnel from the Maldives by May this year. However, his stance has since softened, and he recently visited India on his first state visit, marking a positive shift in diplomatic relations. Tourism remains the backbone of the Maldivian economy, contributing nearly 30% of its GDP and generating over 60% of foreign exchange.