Maldives Grants Central Bank the Authority to Designate 'National Payment Switch'

President Dr Mohamed Muizzu has ratified a pivotal legislative amendment to the National Payment System Act, formally granting the Maldives Monetary Authority (MMA) the legal mandate to designate and regulate a unified National Payment Switch for the nation's financial system.

According to the President's Office, the amendment—which was passed by the Parliament last Monday—has come into full effect following the President's executive sign-off.

The primary objective of the newly enacted legal framework is to modernise and strengthen the country’s financial infrastructure. By embedding core regulatory principles into the National Payment System Act, the amendment establishes formal guidelines for setting up, operating, and overseeing a central payment switch.

Under the new provision, inserted immediately following Article 15 of the Act, the MMA is vested with the authority to select a specific domestic infrastructure to serve as the national standard. Consequently, regulations framed under this law will mandate that specified financial and payment transactions nationwide be routed and processed directly through the designated National Payment Switch.

While the MMA has yet to formally declare the designated system, the government’s current priority framework revolves around Favara, the national instant payment network. Favara currently handles inter-bank transactions across the Maldives and recently achieved a major milestone by linking with India’s Unified Payments Interface (UPI) to facilitate seamless cross-border transactions.

With the law now in effect, all licensed payment service providers operating in the Maldives will be required to participate in the designated National Payment Switch within a strict timeframe to be outlined in forthcoming MMA regulations. To facilitate a seamless shift and prevent service disruptions, the MMA announced it will issue special transitional authorisations, enabling providers to adapt their systems while operating under temporary regulatory oversight.