Indian officials have confirmed to Adhadhu that the Maldivian government requested a further extension to repay the remaining $50 million of a $150 million Treasury Bill (T-bill) facility sold to the State Bank of India (SBI) during the previous administration.
Indian sources, speaking on condition of anonymity due to the sensitivity of the matter, stated that the Maldivian government had requested to roll over the debt. However, India responded by informing the Maldivian government that it would not be able to roll over the debt this time, without citing a reason.
The Indian government had previously rolled over this debt for three years during the former administration and continued to do so under the current administration. During this period, the Indian government also covered $45 million in accrued interest.
The SBI debt originated from $200 million in T-bills sold in tranches to the bank during the first year of the MDP administration as budget support, facilitated by the Indian government. India had allowed these debts to be rolled over between 2020 and 2023 without any repayment from the Maldives.
Upon taking office, the current administration reduced the debt to $150 million by settling a $50 million tranche that matured in January 2024. Despite that payment, the government requested a deferral for the payment due in May 2024 and asked for $50 million of the total to be converted into a grant.
Responding to the request, India converted $50 million into a grant and provided rollovers throughout 2024 and the preceding year. The Indian government also covered the interest payments during the rollover periods requested by the current administration.
Of the remaining $100 million owed to SBI, $50 million was paid in May this year. The final $50 million installment was settled just last week.
Following the settlement, Finance Minister Hassan Zareer stated that the payment was made using funds from the Sovereign Development Fund (SDF) through advance planning. However, available information suggests that the Maldivian government had hoped to avoid repayment until the final moment.
India’s assistance has been a key factor in preventing the Maldives from facing potential bankruptcy during the current administration's term. In addition to the T-bill deferrals, India facilitated a $400 million currency swap in 2024 when the Maldives' reserves were at their lowest. Following the expiry of that swap, India extended another facility of 30 billion Rupees, valued at approximately $312.7 million.
The national gross reserve currently includes the dollars drawn from the Rupee facility. According to the Maldives Monetary Authority (MMA), total reserves stood at $643.8 million at the end of last month. Based on these figures, approximately 48 percent of the reserve consists of funds from this facility.
