The Maldives Monetary Authority (MMA) has announced that a sweeping amendment of the nation’s banking laws is now under way, aiming to fortify domestic banks and trap a larger share of the foreign‑exchange earnings generated by the country’s tourism sector.
Speaking at a press conference in the President’s Office, MMA Governor Ahmed Munawwar said the reforms are essential to retain far more than the country does of the roughly USD 5 billion in annual tourism revenue that currently bypasses the local financial system.
Governor Munawwar highlighted that, following post‑COVID adjustments to foreign‑exchange rules, the proportion of US‑dollar receipts processed through Maldivian banks rose from just 10 percent to 21 percent, but he noted that “a significant portion of that 5 billion remains parked offshore.”
He pointed to the recent amendment of the Payment System Act and the pending bill related to the Destination Principle—currently before Parliament—as key components of a “structural, step‑by‑step effort to build a comprehensive framework.”
The governor warned that local banks are presently barred from extending loans for resort development, a limitation that undercuts the sector’s growth.
“If we can retain dollars locally, that capital stays within our system,” he said, noting that despite a profit of USD 356 million reported by domestic banks last year, 11 percent of those earnings—about USD 38 million—have been siphoned abroad, amounting to a cumulative outflow of USD 200 million over the past five years through foreign‑bank branches.
The MMA’s reform agenda seeks to expand domestic banking capacity, boost liquidity, and encourage the settlement of local transactions in the Maldivian rufiyaa, thereby reducing reliance on offshore channels and strengthening the overall resilience of the nation’s financial sector.