Two ways State Bank of India plays a role in Maldives' development

First Post

23-07-2025

From resort development loans in the 1970s to interest-free budgetary support in 2024, SBI's footprint spans the Maldivian archipelago read more
India, via SBI, has been helping Maldives' economy for decades now. File image
The State Bank of India has emerged as a key financial player in the Maldives, playing a decades-long dual role that supports private sector growth and national fiscal stability.
From resort development loans in the 1970s to interest-free budgetary support in 2024, SBI's footprint spans the Maldivian archipelago.
Since it began operations in the Maldives in February 1974, India's largest state-owned bank has been at the forefront of funding the country's tourism industry, helping to build the very resorts that now anchor the local economy.
STORY CONTINUES BELOW THIS AD
It has further extended credit to firms engaged in marine exports and fishing, reinforcing India's longstanding financial presence in the island nation.
Interest-free Treasury Bill support
Beyond private sector engagement, SBI has provided sovereign budgetary support that goes to show the strategic angling of Indo-Maldivian ties. In 2022, India, via SBI, subscribed to US$100 million in domestic Treasury bonds issued by the Maldivian government. The loan came with a sovereign guarantee from New Delhi and no interest charges: an extraordinary concession in sovereign finance.
This model continued into 2024. At the request of the Maldivian Ministry of Finance, SBI rolled over two separate US$50 million Treasury Bills in May and September, again on a zero-interest, 'government-to-government' basis. These measures were aimed at helping the Maldives cope with acute fiscal stress and maintain budget liquidity without adding to debt-servicing burdens.
A uniquely generous model of assistance
India's support via SBI is unusually generous in global finance, offering interest-free debt and sovereign guarantees. While other lenders impose market-based rates, New Delhi's willingness to underwrite the Maldives' fiscal stability shoes economic practicality and geopolitical intent in the Indian Ocean region.
The bank's assistance has helped the Maldivian government manage high external debt and prevent payment disruptions. Officials familiar with the matter say this direct lending mechanism reflects 'a high-trust, bilateral financial architecture' that allows rapid responses to economic emergencies.
Stabilising the economy, reinforcing influence
The larger impact of this support is unmistakable. Indian credit, delivered through SBI, has given the Maldives room to stabilise its balance of payments, keep essential imports flowing, and begin fiscal reforms. In the short term, such aid has insulated Male from market volatility; in the long term, it reinforces Indian influence at China's maritime doorstep.
Meanwhile, SBI's legacy in the Maldivian private sector continues to shape employment and enterprise. From aviation and fisheries to housing and trade, the bank's commercial credit lines have fuelled entrepreneurship for half a century.