India Maldives Launch Seamless UPI Cross-Border Payment Corridor

Why in News (40 words)

The Maldives has launched the Favara-UPI Cross-Border Payment Corridor, enabling real-time fund transfers to India. The initiative strengthens India–Maldives digital financial connectivity, promotes faster remittances, and reflects growing cooperation in cross-border digital payment infrastructure.

Favara-UPI Payment Corridor: Key Features

• The Maldives Monetary Authority (MMA) has integrated its instant payment system, Favara, with India’s Unified Payments Interface (UPI) to enable real-time cross-border remittances.
• Under the new facility, users in the Maldives can transfer funds instantly in Maldivian Rufiyaa (MVR), which are automatically credited in Indian Rupees (INR) to UPI-enabled bank accounts in India.
• In the initial phase, the service is available to customers of Bank of Maldives Plc and Maldives Islamic Bank Plc through their mobile banking applications.
• The corridor currently supports Person-to-Person (P2P) transactions, making remittances faster, secure, and more cost-effective.
• Permitted transactions include family maintenance remittances and gift-related remittances, in accordance with foreign remittance regulations.

Significance for India–Maldives Relations

• The initiative strengthens India–Maldives economic cooperation by improving digital financial connectivity and facilitating seamless cross-border payments.
• It reduces the dependence on traditional remittance channels by offering instant, low-cost, and secure digital transactions.
• The payment corridor will particularly benefit the Indian diaspora, businesses, tourists, and families by simplifying money transfers between the two countries.
• The project demonstrates India’s expanding Digital Public Infrastructure (DPI) and the growing international acceptance of UPI as a global payment platform.
• The implementation reflects close collaboration among the Maldives Monetary Authority (MMA), Reserve Bank of India (RBI), NPCI International Payments Limited (NIPL), and participating financial institutions.