In a significant legislative move, the Maldives Parliament has approved comprehensive amendments to the National Payment System Act, granting the Maldives Monetary Authority (MMA) expanded powers to regulate and monitor financial transactions more effectively.
The legislative amendment, passed with 63 lawmakers’ support on Monday, introduces sweeping reforms designed to tighten financial oversight and prevent unauthorized payment activities. The new law fundamentally transforms the central bank’s regulatory capabilities by empowering the MMA to establish companies, partnerships, and joint ventures specifically focused on operating payment systems and providing payment services.
Key provisions of the amendment include strict new criminal provisions targeting financial irregularities. Under the new legislation, individuals and entities will be prohibited from offering or soliciting payment services without explicit MMA approval. This restriction applies broadly, with only licensed banks and specifically exempted parties allowed to operate within the payment services landscape.
The law introduces substantial penalties for non-compliance, with monetary fines ranging from MVR 100,000 to MVR 1,000,000 for violations. To provide comprehensive regulatory clarity, the amendment includes a broad definition of “payment solicitation” that encompasses activities such as promoting payment services, proposing contracts, and inviting public participation in payment arrangements.
Notably, even exempted entities will face significant limitations, including a prohibition on soliciting payment services from foreign entities. This provision aims to create a more controlled and transparent financial ecosystem within the Maldives.
The amendment represents a critical step in modernizing the country’s financial regulatory framework. By expanding the MMA’s statutory powers, the legislation seeks to create a more robust mechanism for monitoring and controlling payment systems, ultimately protecting consumers and maintaining financial system integrity.
Once ratified by the President, the amendment will take immediate effect, marking a transformative moment for the Maldives’ financial regulatory landscape. The new law significantly expands the MMA’s regulatory scope and enhances its capacity to oversee the financial sector with greater precision and authority.
Financial experts have praised the amendment as a forward-thinking approach to addressing potential vulnerabilities in the payment services sector. The comprehensive nature of the reforms signals the Maldives’ commitment to maintaining a secure and transparent financial environment.
