Maldives President introduces UPI payment service to boost economy

Image is used for representative purpose only. Photo courtesy: The Hindu

Maldives President Mohammed Muizzu has taken “necessary steps” to launch India’s Unified Payments Interface (UPI) in the archipelagic nation, which will significantly benefit the Maldivian economy.

Developed by the National Payments Corporation of India (NPCI), UPI is an instant real-time payment system to facilitate inter-bank transactions through mobile phones.

According to a press release from the President’s Office, Mr Muizzoo on Sunday set up a consortium to launch UPI in the country and appointed Tradenet Maldives Corporation Limited as its lead agency.

The President also suggested participation of the country’s banks, telecom companies, state-owned companies and fintech companies in the consortium.

The press release said they “decided to take necessary steps” on the recommendation of the Cabinet.

“This move is expected to deliver significant benefits to the Maldivian economy, including increased financial inclusion, improved efficiency in financial transactions and enhanced digital infrastructure,” it said.

Mr Muizzu also formed an inter-agency coordination team comprising the Ministry of Finance, Ministry of Homeland Security and Technology and the country’s Monetary Authority to lead the Ministry of Economic Development and Trade to oversee the establishment of UPI in the Maldives.

Foreign Minister S. on the agreement to launch UPI in Maldives. The signing was done during Jaishankar’s three-day official visit to the country in August.

Earlier this month, the dollar-starved Maldives issued a new foreign exchange regulation, limiting the types of transactions allowed in foreign currency and imposing mandatory foreign exchange controls on tourism establishments and banks.

The Maldives economy appears to have taken a hit after President Muizzu called on Indian tourists to stay away from the picturesque island nation in response to President Muizzu’s ‘India Out’ campaign last year.

Mr Muizzu had won the presidential election last year on the ‘India Out’ campaign and had asked New Delhi to withdraw its military personnel deployed in the archipelagic nation by May this year. However, Muizzu has since softened his anti-India stance and visited India earlier this month on his first state visit to the country.

Tourism is the main source of economic activity for the Maldives, contributing about 30 percent of GDP and generating more than 60 percent of foreign exchange.