Kasaragod: For over a decade, dentist Dr Anjitha and her husband, physiotherapist Udayakrishnan P, have built their lives in the Maldives -- earning well, saving steadily, and looking forward to their annual trip home to Kasaragod. But when they arrive this November, the couple will barely have ₹13,000 each to spend, despite earning together over ₹3 lakh a month.

That's the blow dealt to Indians in the Maldives by the State Bank of India, which has capped outward remittances at just $150 (₹13,188). "What's worse, we can't use the SBI debit cards issued here in India. SBI has stopped ATM withdrawals, online payments, and card swipes outside the Maldives. We're denied access to our own money," said Udayakrishnan over the phone from Addu city.

SBI's restrictions, set to take effect on October 25, are financially crippling the small NRI population in the Maldives and their families back home. The bank has attributed the move to a dollar crunch in the island nation.

The $6.5 billion economy is struggling to rebuild its foreign exchange reserves to meet debt obligations in the coming years. According to World Bank estimates, it would need a reserve of $1.07 billion to sustain its debts in 2026. China and India remain its biggest creditors.

SBI said that the remittance restrictions apply only to Maldivian Rufiyaa accounts, while transfers from dollar accounts will remain unaffected. That is of little solace because only those employed in the tourism sector are paid in dollars. Salaries in all other sectors are paid in Maldivian Rufiyaa (MVR).

Under the October 2024 regulations of the Maldives Monetary Authority (MMA) -- its banking regulator -- transactions made in foreign currency outside the exempted categories can attract fines ranging from 10,000 MVR to 1 million MVR (₹57,500 to ₹57.5 lakh).

Despite a resurgence in tourism after the COVID-19 pandemic, the Maldives faces a significant dollar shortage, driven by rising import costs for essentials such as food and fuel, and compounded by a legacy of public debt. So the government is mopping up the dollars to meet debt repayments over the coming years. In October last year, the MMA tightened rules further, directing banks to deposit 90 per cent of the dollars earned from the tourism sector with the regulator -- up from the previous 60 per cent.

Manu Madhav from Kanhangad, a tourism teacher in the Maldives, said they understood the dollar shortage in the country but found SBI's explanation "incomprehensible". "These restrictions apply only to Indian expatriates who rely on SBI to send money home. In contrast, the Bank of Maldives is raising its debit card spending limit abroad to $1,000 from $500, starting November 11," he said. Also, Maldivians travelling to India for tourism or medical treatment are not subject to the $150 cap, Madhav said.

In a note to customers in the Maldives, SBI said: "As the inflow of foreign exchange to SBI remains very low, we are unable to sustain the current salary remittance limits provided to Indian expatriates."

Shaffaf, a Malappuram native and teacher in the Maldives, said NRIs there wrote to the High Commission in Malé and the Ministry of External Affairs seeking intervention, but the responses have been discouraging.

The High Commission, in a note shared on social media, said it was in talks with the governments of India and the Maldives, as well as the Maldives Monetary Authority, to enable direct Indian Rupee-Maldivian Rufiyaa transactions without the need for dollar conversion, and allow the introduction of UPI payments in the Maldives to ease remittances for Indian expatriates.

However, the note also advised Indians to "plan remittances", "encourage their employers to pay salaries in dollars", and "regularly check SBI Maldives" for updates on limits -- advice that enraged NRIs.

"What nonsense are you asking expats to do? How should we plan? Can you suggest any legal way to remit the money? Are we supposed to demand that the (Maldivian) Ministry of Health and Education pay in dollars? Or keep checking the SBI site? Shame on you!" Joby Paulose commented on the High Commission's post.

Udayakrishnan, the physiotherapist, told Onmanorama that two of his Indian colleagues have a car loan and a home loan. "The car EMI is ₹15,000, but he can now send only ₹13,000. They are going to default for no fault of theirs," he said.

Though Udayakrishnan has no loans, his investment plans are at risk because he has to maintain monthly SIPs. "Even though we work in the government sector, unlike natives, expats don't have a pension or PF (provident fund). We have to secure our future with investments," said Madhav, the teacher.

Agencies hired by the Maldives government are still conducting recruitment interviews in India, mostly in Hyderabad, Kochi, and Marthandam in Kanyakumari for nurses and teachers. "Candidates pay between ₹2.5 lakh and ₹3 lakh to these agencies to get a job in the Maldives. I hope they know they will be able to send home only ₹13,000. Our money is stuck in the Maldives," Madhav said.

According to NRIs in the Maldives, specialist doctors earn between 60,000 and 80,000 Maldivian Rufiyaa (MVR), equivalent to roughly ₹3.5 lakh to ₹ 4.5 lakh. MBBS doctors earn 20,000 to 30,000 MVR (₹1 lakh to ₹1.7 lakh), while nurses and allied health professionals earn between 18,000 and 25,000 MVR (₹1 lakh to ₹1.4 lakh). Teachers earn similar salaries.

For high-income doctors, monthly expenses are around 8,000 MVR, including rent of 3,000-4,000 MVR for houses, 3,000 MVR for food, and 2,000 MVR as miscellaneous costs, according to Udayakrishnan and Madhav. Those living in shared apartments spend significantly less.

"Any Indian working here could easily send ₹ 50,000 or more home, and doctors could remit ₹1 lakh or more," said Udayakrishnan.
However, SBI's restrictions on outward remittances are severely affecting families back home.

Udayakrishnan recalled that when he arrived in the Maldives in 2014, SBI's remittance caps were $1,200 for doctors and high-salary employees, and $700 for nurses and teachers -- with $1,000 or $500 allowed in the first half of the month, and $200 in the second half.
"It was reasonable, as we could save and send that much home," he said.

The COVID-19 pandemic hit the tourism-dependent island hard, and SBI did away with the mid-month remittance of $200, lowering the total to $1,000 and $500.

By 2024, SBI further reduced the outward remittance cap to $400 for all professions, including those earning the minimum wage of $250. "Now SBI has cut it to $150, far below even the minimum wage here," said Madhav.

Despite the dollar shortage in the banking system, US currency is freely available on the black market.

On September 16, the Maldives Police arrested a 30-year-old Bangladeshi national at Velana International Airport for allegedly conducting unauthorised foreign currency exchanges. They seized 68,000 Rufiyaa, $1,700, and other currencies from him.

However, buying dollars on the black market comes at a steep premium -- around 43 per cent higher than the official rate, said NRIs in the Maldives. While the official exchange rate is 15.30 MVR for one dollar, the black market rate is about 22 MVR. It was around 19 MVR in June.

"To send ₹50,000 home by buying dollars on the black market, we would have to spend an extra 3,800 MVR (roughly ₹22,000), the same as the monthly rent for well-off residents here," said Madhav.

Using the hawala network to send money costs a similar amount, and it also risks attracting scrutiny from tax authorities. "The hawala people know our situation and squeeze us," said one NRI.

On a purchasing power parity (PPP) basis, the Maldives tops SAARC nations with a per capita income of $23,351 in 2024, nearly double that of India’s -- making it a preferred destination for Indian jobseekers.

Despite a dollar crunch, they say salaries continue to be paid on time and daily life remains largely unaffected, though the government is tightening its belt. President Mohamed Muizzu has halved his own pay and imposed a 10 per cent cut across most public sector jobs.

Muizzu aims to reduce dependence on tourism and transform the Maldives into a discreet financial hub in the Indian Ocean -- one with no residency requirements, no corporate tax, tax-free inheritance, and strict financial privacy, according to a statement from his office in May.

The Maldives International Financial Centre is coming up with an $8.8 billion investment from Dubai-based MBS Global Investments, owned by Qatari Sheikh Nayef bin Eid Al Thani. It is expected to be completed by 2030 and generate over $1 billion in annual revenue by 2035.

That's a 10-year wait. "But if India and the Maldives can implement the rupee–Rufiyaa direct exchange agreed during Modi's July visit, without dollar conversion, it would ease our troubles," said Udayakrishnan, hoping the system takes effect before his vacation begins in November.