System that allows instant transactions between banks inaugurated

‘Favara’, a payment system that allows instant money transactions between two banks, has been launched.

The system, developed by the Maldives Monetary Authority (MMA), was launched by Vice President Faisal Naseem, during a special event held at Crossroads Maldives on Saturday night. 

Speaking at the event, MMA's Governor Ali Hashim underscored that usage of internet banking and mobile banking was more common among Maldivians in comparison to neighboring countries. 

Despite this paving the way for digital financial services - he stressed the lack of an adequate infrastructure for this to date. The introduction of 'Favara', he said, will address the difficulties arising from this. 

“Our objectives for this project were the provision of equal opportunities for payment systems and increasing competition within the financial sector,” Hashim said.

The system was introduced in collaboration with three of the major banks in Maldives;  Bank of Maldives, Maldives Islamic Bank, and State Bank of India.

Hashim, noting efforts were underway to include other banks in the system as well, expressed hope for them to be able to join before the end of the year. 

“Following, you can make instant money transfers 24 hours a day, no matter where you are or where you have your money stored, without interruption,” Hashim said.

He said the next phase of the project will be the beginning of open banking in the Maldives. With that, the door for the provision of other financial services will open, he said.

Hashim also said that various countries around the world have already established systems for instant transactions between banks of different countries and that there is no reason that such a system cannot be established in the Maldives.