Maldives President Mohamed Muizzu has taken "necessary steps" to introduce India's Unified Payments Interface (UPI) in the archipelago nation, slated to benefit the Maldivian economy substantially.

Developed by the National Payments Corporation of India (NPCI), UPI is an instant real-time payment system for facilitating inter-bank transactions through mobile phones.

Muizzu on Sunday set up a consortium to introduce UPI in the country and appointed TradeNet Maldives Corporation Limited as its leading agency, according to a press release by the President's Office.

The president also suggested the participation of the country's banks, telecom companies, state-owned companies and fintech companies in the consortium.

He "decided to take the necessary steps" on the recommendation of the Cabinet, the press release said.

"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," it said.

Muizzu also constituted an inter-agency coordination team comprising the Ministry of Finance, the Ministry of Homeland Security and Technology and the country's Monetary Authority to lead the Ministry of Economic Development and Trade in overseeing the establishment of the UPI in the Maldives.

The agreement to introduce UPI in Maldives was signed during External Affairs Minister S Jaishankar's three-day official visit to the country in August.

Earlier this month, dollar-starved Maldives floated a new foreign currency regulation, limiting types of transactions allowed in foreign currency and imposing mandatory foreign currency exchange controls on tourism establishments and banks.

The Maldivian economy appears to have taken a hit after calls to Indian tourists to avoid the picturesque island nation as a response to President Muizzu's 'India Out' campaign last year.

Muizzu won the presidential election last year on an ‘India out’ campaign and asked New Delhi to withdraw its military personnel posted in the archipelago nation by May this year. However, Muizzu has since toned down his anti-India stance and visited India on his first state visit to the country earlier this month.

Tourism is the main source of economic activity for the Maldives, contributing nearly 30 per cent of the GDP and generating more than 60 per cent of foreign exchange.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.