The Central Bank’s Governor Ahmed Munawar has highlighted the need to increase the capital of Maldivian banks to strengthen the local financial sector.

Speaking on MMTV’s Bodu Khabaru programme, Governer Munawar explained that while foreign banks play a key role in financing resort development, this money often ends up overseas instead of benefiting the local economy.

Governor Munawar emphasised that to retain and grow bank assets within the Maldives, local banks must increase their capital. He noted that the current capital requirements are too low to support the growth and stability of Maldivian banks. To address this issue and raise the minimum capital threshold, Munawar revealed the Government’s plan to amend the banking law.

One way to help strengthen local banks, Munawar suggested, is for banks to directly lend to the tourism industry. This would retain the funds in the country rather than letting them flow out through foreign bank branches.

In addition, Munawar pointed out that while foreign exchange inflows to the Maldives amount to MVR 4.5 billion annually, only USD 1.5 billion of that is deposited into local banks, further underscoring the need for stronger, well-capitalised local banking institutions.