The government has taken out a loan of MVR 800 million to pay the salaries of public sector employees this month, according to reliable sources.
The Bank of Maldives (BML) issued the loan in the form of Treasury bills (T-bills) to the Ministry of Finance. However, the terms of the loan, such as its duration and interest rates, have not yet been disclosed. At the time of publication, BML had not responded to requests for comment.
This financial move comes as the government grapples with cash flow challenges, which experts attribute to recent domestic policies. Analysts note that government spending decisions and fiscal management have placed significant strain on public finances, leading to the need for short-term borrowing to meet obligations such as salaries.
BML Board Overhaul Before Loan Approval
The loan follows a major reshuffling of the Bank of Maldives’ board of directors. An Extraordinary General Meeting (EGM) held last Saturday saw the appointment of Ahmed Ali Habeeb as chairperson. Habeeb, who serves as the Principal Secretary to the President on Cabinet Affairs, now heads the board during a critical time for the country’s largest bank.
New directors, Ali Irufan and Mohamed Shahid, were also appointed. The government-nominated board members include Ali Faris Mohamed, Adil Moosa, and Dr Mariyam Suzy Adam. Public shareholders re-elected directors Abdulla Naseem, Moosa Rasheed, and Najeem Ibrahim Zakariyya.
These appointments follow a series of high-profile resignations and removals, including the resignation of CEO Karl Stumke earlier this month. His departure followed controversy over BML’s temporary suspension of foreign transaction allowances on Maldivian Rufiyaa-linked debit and credit cards—a decision quickly reversed after intervention by the Maldives Monetary Authority (MMA).
India Rolls Over $50 Million Treasury Bill
In a related development, India has provided further financial assistance to the Maldives. At the request of the government, the State Bank of India (SBI) rolled over a $50 million Treasury bill for another year. This is the second time this year that SBI has extended such support, following a similar rollover in May.
India’s continued financial assistance comes at a time of growing diplomatic tensions between the two countries following the election of President Mohamed Muizzu. However, the Indian High Commission in the Maldives reaffirmed the longstanding relationship, highlighting the assistance as part of India’s ‘Neighbourhood First’ policy.
Concerns Raised Over Politicisation of BML
The changes at BML have sparked political debate, with former President Ibrahim Mohamed Solih warning against actions that could undermine trust in the bank. Solih stressed that the Bank of Maldives is a crucial institution for the Maldivian economy and that eroding public confidence in it would have far-reaching consequences.
Former President Abdulla Yameen also criticised the government for politicising the bank, urging the Maldives Monetary Authority (MMA) to step in and prevent further political interference. He expressed concern that the independence of BML could be at risk under the current administration.
While the government has not commented on these allegations, the leadership changes and policy decisions at BML remain under close scrutiny by financial experts and political figures alike.
