The Maldives and India have launched a new cross-border digital payment corridor connecting the Maldives Instant Payment System, Favara, with India’s Unified Payments Interface. The integration allows individuals in the Maldives to transfer money directly and in real time to UPI-enabled bank accounts in India.
The Maldives Monetary Authority announced that the service became operational on July 30, 2026, marking an important step in strengthening digital financial connectivity and economic cooperation between the two countries.
Real-Time Transfers from Maldives to India
Under the new arrangement, customers in the Maldives can initiate transfers through their mobile banking applications using the Favara payment network. The transaction is made in Maldivian Rufiyaa, while the beneficiary in India receives the amount in Indian Rupees through the UPI system.
The integration is expected to make eligible cross-border remittances faster and more convenient by reducing dependence on slower conventional transfer channels.
Recipients in India do not require a separate payment platform as long as their bank account is enabled for UPI transactions.
Two Maldivian Banks Join Initial Phase
The service has initially been launched through Bank of Maldives Plc and Maldives Islamic Bank Plc.
Customers of these two institutions can use their existing mobile banking applications to send person-to-person payments to eligible UPI-linked bank accounts in India. More financial institutions may be included as the corridor expands.
The initial phase is focused on individual remittances rather than commercial or merchant payments.
Permitted Remittance Categories
Transfers through the Favara–UPI corridor are currently permitted for selected remittance purposes.
These include family-maintenance payments under foreign inward and outward remittance categories. Gift-related transfers are also permitted under the applicable foreign outward remittance framework.
The service will operate under the foreign-exchange and regulatory requirements of both countries, with participating banks responsible for carrying out the necessary customer verification and transaction checks.
Result of India–Maldives Financial Cooperation
The payment corridor was developed through cooperation among the Maldives Monetary Authority, the Reserve Bank of India, NPCI International Payments Limited, participating banks and other stakeholders in both countries.
The formal agreement for connecting Favara with UPI was signed between the Maldives Monetary Authority and NPCI International Payments Limited in July 2025.
According to the official announcement, final testing, certification, onboarding and live validation were completed through an accelerated ten-day implementation process, allowing the corridor to achieve operational readiness.
The launch demonstrates how national instant-payment platforms can be connected to make international remittances quicker and more accessible.
Merchant Payments Planned in Future Phases
The present service primarily supports person-to-person transfers from the Maldives to India. Future phases are expected to introduce additional payment services.
These may include QR-code-based merchant payments, allowing users to pay businesses across the two countries through compatible digital-payment applications.
Further expansion could support tourism, retail purchases, small-business transactions and other cross-border financial services. Such services would be particularly useful because India is one of the Maldives’ major economic, tourism and connectivity partners.
Benefits for Families and Workers
The integration is expected to benefit families, professionals, workers, students and other individuals who regularly transfer money between the Maldives and India.
Real-time settlement can provide recipients with quicker access to funds for education, medical treatment, household expenses and other essential requirements. Mobile-based transfers may also reduce the need to visit bank branches or remittance offices.
The system could become especially valuable for Indian citizens working in the Maldives and Maldivian residents maintaining financial links with India.
Expanding UPI’s International Reach
UPI has steadily expanded beyond India through partnerships with foreign governments, central banks, payment networks and financial institutions.
Indian travellers can use UPI-supported payment services in countries including Cambodia, Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar and Sri Lanka.
The integration with Favara differs from travel-oriented merchant acceptance because it creates a direct link between the domestic instant-payment systems of the Maldives and India for eligible account-to-account remittances.
The launch of the Favara–UPI corridor represents another step in the internationalisation of India’s digital public-payment infrastructure while supporting the Maldives’ efforts to modernise its own financial ecosystem.
By enabling instant transfers between Maldivian Rufiyaa and Indian Rupees, the corridor is expected to reduce payment friction, strengthen people-to-people financial connections and create a foundation for wider digital commerce between the two neighbouring countries.
Source: PIB
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