Parliament Approves Amendment to National Payment System Act
26th Sitting of second session of 2025. | Photo: People’s majlis
Parliament has approved amendments to the National Payment System Act, 2021, enabling the establishment of Payments Maldives, a company to be created by the Maldives Monetary Authority (MMA).
The legislation was passed on Monday with 63 votes in favour, while two members abstained. No MP voted against the bill, which was presented on behalf of the government by Makunudhoo MP Adam Shafeeq.
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The amendments, proposed by the government, target four clauses of the Act. No major changes were introduced during the committee stage. The revised law authorises the MMA to establish or hold shares in companies operating payment systems or providing payment services. It also prohibits the operation of any payment system without a licence or approval from the authority.
In June, the MMA informed Parliament’s Public Accounts Committee that it was in the process of establishing Payments Maldives to enhance the country’s retail payment infrastructure. The company will manage services including the Favara Instant Payment System, which was launched in 2023. Favara currently enables instant bank transfers, request-to-pay services, account verification, and smart addressing for simpler transactions.
The Public Accounts Committee’s report on the amendment was presented by Funadhoo MP Mohamed Mamdooh. It stated that the main purpose of the changes was to grant the MMA explicit legal authority to establish entities responsible for managing payment systems. The report also highlighted an agreement signed last month between the MMA and India’s NPCI International Payments Limited (NIPL) to link the Favara system with India’s Unified Payments Interface (UPI).
The cross-border payment initiative is expected to begin its first phase in early 2026, allowing individuals in both countries to transfer money directly to family and friends. A subsequent phase will enable merchants to accept QR code payments in their respective local currencies.
