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.
| About Unified Payments Interface (UPI): ● Unified Payments Interface (UPI) is an instant real-time payment system developed by the National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI). ● NPCI International Payments Limited (NIPL) is the international arm of NPCI, responsible for expanding UPI and RuPay acceptance across foreign countries. ● Key Features of UPI: ○ 24×7 instant fund transfers ○ Interoperable payment platform ○ QR code-based payments○ Mobile-first digital transactions ○ Low-cost and secure payment ecosystem ● Digital Public Infrastructure (DPI): India has built a globally recognized DPI ecosystem comprising Aadhaar, UPI, DigiLocker, e-KYC, and the Account Aggregator Framework, enabling inclusive digital governance and financial services. |