Maldives President Mohamed Muizzu, on the recommendation of the Cabinet, has decided to take the necessary steps to introduce India's Unified Payment Interface (UPI) in his country.

"This move is expected to bring significant benefits to the Maldivian economy, including increased financial inclusion, improved efficiency in financial transactions, and enhanced digital infrastructure," read a statement issue by the Maldivian President's website.

The decision was made after the Cabinet thoroughly discussed a paper submitted by the Minister of Economic Development and Trade at a cabinet meeting, ensuring a comprehensive understanding of the matter.

In this regard, President Dr Muizzu has decided to set up a consortium to introduce UPI in the Maldives.

He also suggested that banks, telecom companies, state-owned companies and fintech companies operating in the country should be included in the consortium.

He also appointed TradeNet Maldives Corporation Limited, a leading agency with proven expertise, as the consortium's leading agency.

He also decided to constitute an inter-agency coordination team comprising the Ministry of Finance, Ministry of Homeland Security and Technology and The Maldives Monetary Authority to lead the Ministry of Economic Development and Trade to oversee the establishment of the UPI in the Maldives.

Earlier this month, India extended support to Maldive's economy in the form of USD 400 million and INR 30 billion as a bilateral currency swap agreement, officials said on Monday.

The agreement was announced during Maldivian President Mohamed Muizzu's first bilateral visit to India.

He met Indian PM Narendra Modi in New Delhi.

Diplomatic tensions between the two countries reached a flashpoint last year over remarks made by some Maldives ministers against Indian PM Narendra Modi’s visit to Lakshadweep, to promote the Indian Union Territory having the potential to compete with tourism major Maldives.

However, Muizzu and other Maldivian leaders visited India this year in a bid to improve ties.