MMA Regulation Change Threatens Maldives’ Financial Integrity: MDP Chairperson

The main opposition Maldivian Democratic Party (MDP) Chairperson Fayyaz Ismail has warned that the the Maldives Monetary Authority’s (MMA) recent amendment to the corporate governance regulation, which allows political appointees to serve on the boards of banks, insurance firms, and finance companies, could erode trust among domestic and international lenders and investors.

“So far, no government has done this to maintain the integrity of the financial system. This government is pushing the financial system backward for many years, refusing to disclose state accounts and financial reports and heading towards establishing a secret state,” Ismail said in a post on X, referring to a news article about the central bank’s regulatory changes. “These policies will undermine the confidence of domestic and foreign lenders and investors. To build a healthy economy, transparency is crucial, and it is essential that the government has the ability to listen to the criticism that comes from such disclosure.”

Former Finance Minister Ibrahim Ameer also voiced similar concerns, alleging that the Muizzu administration’s changes to the corporate governance regulation are designed to exert undue influence over the Bank of Maldives (BML).

Previously, any person appointed to a political post by the President was barred from being appointed to the boards of banks, insurance companies, and finance companies. The revised regulation, however, now only restricts the appointment of cabinet ministers, heads of independent institutions, and leaders of political parties to the boards of financial institutions.

The revision to the corporate governance regulation coincides with controversial changes introduced by President Muizzu’s newly appointed central bank governor, Ahmed Munawar. Munawar, who previously served as an advisor at the Finance Ministry, has recently restructured the MMA by creating five new managing director positions and abolishing the position of Assistant Governor. The former Assistant Governors have been promoted to Advisor roles.