India & Sri Lanka discuss early launch of UPI payment system

Colombo: Six months after it was announced by the prime ministers 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 Lanka President Ranil Wickremesinghe signed an agreement on Unified Payments Interface (UPI) acceptance in Sri Lanka during Wickremesinghe's two-day visit to India.

The latest discussion took place on Monday during a meeting between the High Commissioner of India Santosh Jha with 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 here after the meeting.

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 $4 billion, surpassing the International Monetary Fund's 48-month bailout of about $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 $2.4 billion bailout facility approved in March 2023.