The Favara-UPI cross-border payment corridor was launched, connecting the Maldives and India after integrating the Maldives Instant Payment System, 'Favara', with India's Unified Payments Interface (UPI).
The Maldives Monetary Authority (MMA) announced the successful implementation of the integration on July 30, 2026, as stated by the Ministry of Finance.
The initiative signifies a pivotal development in transnational digital financial integration and economic collaboration between the two countries.
With the new mechanism, people in the Maldives can use Favara to send money instantly to beneficiaries in India. Transactions commence in Maldivian Rufiyaa (MVR) and are credited directly to recipients in Indian Rupees (INR) using the UPI network. The service launched with a chosen group of financial organizations in the island country.
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According to the official announcement, "The service has started with the involvement of two local banks: Bank of Maldives Plc and Maldives Islamic Bank Plc." The document stated that "clients of these banks can start person-to-person (P2P) transfers straight to UPI-enabled bank accounts in India through their mobile banking apps and the Favara payment system."
Allowed remittance categories within the framework encompass family-support-related remittances as per both Foreign Inward and Foreign Outward Remittance regulations. The system also allows for gift-related transfers categorized under Foreign Outward Remittance regulations.
Emphasizing the collaborative effort among various agencies in the rollout, the statement remarks, "The implementation demonstrates strong cooperation between the MMA, the Reserve Bank of India (RBI), NPCI International Payments Limited (NIPL), involved financial institutions, and other stakeholders from both nations."
The bilateral framework is based on initial structural agreements. The official contract for the Favara-UPI merger was signed by NIPL and MMA in July 2025. Operational readiness was attained after an expedited 10-day plan focused on testing, certification, onboarding, and real-time validation.
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Additional enhancements to the digital interface are scheduled for later phases of execution. The formal announcement emphasized that "future stages of the partnership will present more cross-border payment scenarios, such as QR-based merchant transactions and other novel digital payment solutions, further enhancing economic and financial connections between the Maldives and India."
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The rollout enhances the global footprint of India’s digital payment landscape. Apart from the Maldives, UPI services are available in nine additional countries: Cambodia, Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar, and Sri Lanka, enabling smooth transactions for Indian tourists overseas.