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UPI will be launched soon in Sri Lanka, Both countries signed agreement


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Six months after the joint announcement by the prime ministers of India and Sri Lanka, discussions have taken place regarding the expedited launch of the Unified Payments Interface (UPI) payment system in Sri Lanka. India reaffirmed its commitment to supporting the debt restructuring efforts in the financially challenged island nation 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, on Monday.

In July 2023, Prime Minister Narendra Modi and Sri Lanka President Ranil Wickremesinghe formalized an agreement on UPI acceptance in Sri Lanka during Wickremesinghe’s two-day visit to India. The recent dialogue emphasized India’s unwavering partnership in Sri Lanka’s economic recovery, addressing topics such as the early implementation of the UPI payment system in Sri Lanka, the growth in Indian Rupee trade settlements, and India’s ongoing support in Sri Lanka’s debt restructuring process.

In October, Modi disclosed that collaborative efforts between the two governments were underway to enhance connectivity in the fintech sector by integrating the UPI and Lanka Pay systems. This announcement was made during the inauguration of ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka, conveyed through a video message.

Despite the challenges faced by Sri Lanka in 2023, particularly in the wake of economic turmoil, India emerged as a steadfast ally. Celebrating the 75th anniversary of diplomatic relations, New Delhi played a pivotal role in facilitating the steady economic recovery of Colombo. In response to the unprecedented economic crisis in Sri Lanka, India promptly provided significant assistance, exceeding USD 4 billion, surpassing the International Monetary Fund’s 48-month bailout of approximately USD 3 billion.

On November 29, President Wickremesinghe announced that Sri Lanka is on the verge of securing a statement of agreement from external creditors regarding debt restructuring. This development is anticipated to pave the way for the International Monetary Fund to conclude its first review of the USD 2.4 billion bailout facility, which was approved in March 2023.

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