India, Sri Lanka discuss UPI payment system’s early launch

UPI payments

Six months after it was announced by the heads of both countries, India has discussed the early launch of the UPI payment system with Sri Lanka and reiterated its support in the cash-strapped island nation’s debt restructuring process.

In July 2023, Prime Minister Narendra Modi and Sri Lankan President Ranil Wickremesinghe signed an agreement on Unified Payments Interface (UPI) acceptance in Sri Lanka during Wickremesinghe’s two-day visit to India. 

“High Commissioner reiterated that India will continue to be a steadfast partner in Lanka’s economic recovery in his meeting with the CBSL Governor. Discussed early launch of the UPI payment system in SL, growth in INR trade settlements, and India’s support in Lanka’s debt restructuring process,” said a post on X by the High Commissioner of India after the meeting.

Prime Minister Modi previously announced the collaborative efforts of both nations in the fintech sector, aimed at integrating the Unified Payments Interface (UPI) with Lanka Pay. This announcement was made during the launch of ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka.

Throughout 2023, India emerged as a reliable ally for Colombo, particularly aiding the island nation’s economic resurgence amid challenging times. India’s support extended beyond diplomatic relations, providing substantial assistance of over USD 4 billion compared to the IMF’s bailout of approximately USD 3 billion amid Sri Lanka’s financial crisis.

President Wickremesinghe reported on November 29 that Sri Lanka is nearing a consensus with external creditors on debt restructuring. This development is pivotal for the IMF’s evaluation of the USD 2.4 billion bailout facility sanctioned in March 2023, indicating progress in Sri Lanka’s financial stabilisation efforts.

(With PTI inputs)

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