Maldives will launch India’s RuPay service to strengthen economic ties and financial stability.

Malé, May , 2024— The Maldives has announced plans to implement India’s RuPay payment system, a significant step toward improving economic cooperation and financial stability. While the precise start date is unknown, the project is expected to strengthen the Maldivian Rufiyaa and deepen commercial connections between the two adjacent countries.

The announcement comes after ongoing consultations between Maldivian officials and their Indian counterparts. Mohamed Saeed, the Maldives’ Minister of Economic Development and Trade, stressed the potential benefits of the RuPay launch, stating that it is part of a larger goal to reduce the country’s reliance on the dollar and strengthen its local currency.”Addressing the dollar issue and reinforcing the MVR is a top priority for the current administration,” Saeed said.

The announcement comes after ongoing consultations between Maldivian officials and their Indian counterparts. Mohamed Saeed, the Maldives’ Minister of Economic Development and Trade, stressed the potential benefits of the RuPay launch, stating that it is part of a larger goal to reduce the country’s reliance on the dollar and strengthen its local currency. “Addressing the dollar issue and reinforcing the MVR is a top priority for the current administration,” Saeed said.

RuPay, designed by the National Payments Corporation of India (NPCI), is India’s leading card payment network, with widespread acceptance at ATMs, point-of-sale (POS) devices, and online platforms. Bhutan, Nepal, Mauritius, the United Arab Emirates, and Singapore all accept the card as well. The implementation of RuPay in the Maldives is intended to improve financial transactions for tourists and business travelers, strengthening the local economy.

The foundation for this endeavor was formed in August 2022, when then-President Ibrahim Mohamed Solih discussed ongoing attempts to operationalize RuPay in the Maldives during a bilateral meeting. The implementation of RuPay is intended to strengthen bilateral travel, tourism, and commercial ties between India and the Maldives.

Furthermore, the Maldives has taken attempts to use local currencies in bilateral trade with India and China. This shift intends to lessen the Maldives’ reliance on the US dollar, potentially cutting yearly import expenses by nearly half, which presently stand at $1.5 million. Minister Saeed revealed that he met with Indian High Commissioner Munu Mahawar two weeks ago, who promised New Delhi’s assistance in arranging import payments in Indian rupees.

In July 2023, the Reserve Bank of India (RBI) approved the Maldives as one of 22 nations to open Special Rupee Vostro Accounts (SRVAs), increasing bilateral trade in local currencies even further. This initiative is consistent with previous agreements in recent years with international banks, payment businesses, and NPCI International Payments Ltd (NIPL), NPCI’s global arm, to accept UPI and RuPay in various formats.

RuPay’s introduction in the Maldives marks a watershed point in Indo-Maldivian relations, demonstrating a shared commitment to economic cooperation and regional financial integration. As both countries seek opportunities for mutual growth, the adoption of RuPay is a critical step toward a more resilient and linked regional economy.