India, Sri Lanka discuss early launch of UPI payment system

Six months following the joint announcement by the prime ministers of India and Sri Lanka, discussions have taken place regarding the accelerated implementation of the UPI payment system.

India has once again expressed its commitment to supporting the debt restructuring process in Sri Lanka, a nation facing financial challenges.

The agreement on the acceptance of the Unified Payments Interface (UPI) in Sri Lanka was formalised in July 2023 during the two-day visit of Sri Lanka President Ranil Wickremesinghe to India, where he signed the accord with Prime Minister Narendra Modi.

The most recent deliberation took place on Monday during a meeting between the High Commissioner of India, Santosh Jha, and the Governor of the Central Bank of Sri Lanka (CBSL), Dr. Nandalal Weerasinghe.

"High Commissioner reiterated that #India will continue to be a steadfast partner in Lanka's economic recovery in his meeting with @CBSL Governor. Discussed early launch of 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 in Colombo after the meeting.

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In October, Modi announced that the governments of both India and Sri Lanka are working together on fintech sector connectivity by linking the Unified Payments Interface (UPI) and Lanka Pay.

He announced to link UPI and Lanka Pay when he was addressing the event to launch ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka, via a video message.

Even as Sri Lanka and India marked their 75th anniversary of diplomatic relations in 2023, New Delhi emerged as a steadfast ally of Colombo, playing a pivotal role in the debt-trapped island nation's steady economic recovery.

When the unprecedented economic turmoil struck Sri Lanka last year, India swiftly extended a lifeline to the country with assistance of over USD 4 billion, surpassing the International Monetary Fund's 48-month bailout of about USD 3 billion.

On November 29, President Wickremesinghe declared that Sri Lanka is close to securing a statement of agreement from its external creditors on debt restructuring that will enable the IMF to conclude its first review of the USD 2.4 billion bailout facility approved in March 2023.

With inputs from agencies