Favara-UPI cross-border payment corridor goes live between Maldives, India

India and the Maldives have operationalised a cross-border payment corridor linking the Maldives' instant payment system, Favara, with India's Unified Payments Interface (UPI), the finance ministry said on Friday.

The Maldives Monetary Authority (MMA) announced the successful launch of the integration on July 30, describing it as a step forward in digital financial connectivity and bilateral economic cooperation between the two countries.

Under the arrangement, users in the Maldives can initiate fund transfers through Favara using their mobile banking applications.

Transactions will be made in Maldivian Rufiyaa (MVR) and credited to beneficiaries in India in Indian Rupees (INR) through the UPI network.

The service has initially been rolled out with the participation of Bank of Maldives Plc and Maldives Islamic Bank Plc.

Customers of the two banks can make person-to-person (P2P) transfers directly to UPI-enabled bank accounts in India.

According to the ministry, the permitted remittance categories include family maintenance-related remittances under both foreign inward and outward remittance provisions, as well as gift-related remittances allowed under foreign outward remittance rules.

The implementation was carried out through collaboration between the Maldives Monetary Authority, the Reserve Bank of India (RBI), NPCI International Payments Limited (NIPL), participating financial institutions and other stakeholders from both countries.

The agreement for integrating Favara with UPI was signed between NIPL and the Maldives Monetary Authority in July 2025.

The ministry said the payment corridor achieved operational readiness after testing, certification, onboarding and live validation completed over a 10-day period.

In the next phase, the two sides plan to expand the collaboration to include QR code-based merchant payments and other cross-border digital payment services.

UPI-based payment services are now available in nine countries outside India: Cambodia, Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar and Sri Lanka.