India and the Maldives have strengthened their digital financial partnership with the successful operationalisation of the Favara-UPI cross-border payment corridor, enabling individuals in the Maldives to make instant money transfers to bank accounts in India through the Unified Payments Interface (UPI).
The Maldives Monetary Authority (MMA) announced that the integration between the Maldives Instant Payment System, Favara, and India’s UPI became operational on July 30. The launch is being seen as a major milestone in cross-border digital payments and reflects the growing economic and financial cooperation between the two neighbouring countries.
The new payment corridor enables users in the Maldives to initiate real-time person-to-person (P2P) fund transfers in Maldivian Rufiyaa (MVR). The transferred amount is automatically converted and credited in Indian Rupees (INR) to the beneficiary’s UPI-enabled bank account in India within seconds.
Service launched in first phase through two Maldivian banks
The facility has initially been rolled out through two participating financial institutions—Bank of Maldives Plc and Maldives Islamic Bank Plc.
Customers of these banks can now use their existing mobile banking applications to send money to India through the Favara payment system without requiring additional payment platforms.
The first phase of the service has been designed primarily to facilitate family-maintenance remittances under both foreign inward and outward remittance categories. It will also support gift-related remittances that are permitted under the Maldives’ foreign outward remittance regulations.
The initiative is expected to significantly improve convenience for Maldivian residents who regularly transfer money to family members, students or relatives in India by reducing transaction time and simplifying the remittance process.
Joint effort by Indian and Maldivian institutions
The cross-border payment corridor has been developed through close collaboration between the Maldives Monetary Authority, the Reserve Bank of India (RBI), NPCI International Payments Limited (NIPL), participating banks and several other stakeholders from both countries.
The project builds upon an agreement signed between NPCI International Payments Limited and the Maldives Monetary Authority in July 2025 to establish interoperability between Favara and India’s UPI platform.
According to the official announcement, the integration reached full operational readiness after an accelerated 10-day implementation process that covered system testing, certification, onboarding of participating institutions and live transaction validation.
The rapid deployment highlights the technical coordination between regulators, payment operators and financial institutions in both countries.
Future phases to introduce merchant payments
Authorities have indicated that the current launch represents only the first phase of a broader cross-border digital payments partnership.
The Maldives Finance Ministry said future phases of the collaboration will expand the range of services available under the payment corridor. Planned additions include QR code-based merchant payments, allowing Maldivian users to make digital payments directly to merchants in India using compatible payment applications.
The expansion is also expected to include additional digital payment solutions aimed at enhancing financial connectivity, promoting tourism and facilitating greater business transactions between the two countries.
Officials believe these developments will further strengthen economic integration and improve ease of doing business between India and the Maldives.
Boost to India’s growing UPI ecosystem
The launch also marks another step in the international expansion of India’s Unified Payments Interface, which has emerged as one of the world’s largest real-time digital payment systems.
Developed by the National Payments Corporation of India (NPCI), UPI enables instant bank-to-bank transfers through mobile applications and has transformed digital payments within India.
In recent years, India has actively partnered with several countries to extend UPI’s global reach by enabling seamless cross-border payment acceptance and remittance services.
According to the government, UPI is currently accepted in nine countries—Cambodia, Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar and Sri Lanka. Indian travellers visiting these destinations can make digital payments using UPI-enabled applications at participating merchants.
The Maldives integration adds another important dimension to UPI’s international footprint by enabling direct person-to-person cross-border fund transfers rather than only payment acceptance.
Expected benefits for users and bilateral trade
The Favara-UPI corridor is expected to provide several benefits for individuals and businesses.
Instant settlement of transactions is likely to reduce delays traditionally associated with international bank transfers. Users will also benefit from a simplified digital process using existing mobile banking applications, eliminating the need for separate remittance channels.
The initiative is expected to support the sizeable movement of people between India and the Maldives, including students, professionals, businesses and families that regularly transfer funds across borders.
For the two countries, the payment corridor represents another milestone in strengthening financial cooperation, promoting digital innovation and expanding the use of secure, interoperable payment systems.
As additional banks and services are brought onto the platform in future phases, the partnership is expected to deepen digital financial integration between India and the Maldives while supporting greater trade, tourism and economic engagement.
