RBI cripples PayPal in India
After struggling to comply with Indian regulations for the past year or so, it seems RBI has fatally crippled PayPal. In an email to all its Indian users, PayPal notifies us about the upcoming changes.
With effect from 1 March 2011, you are required to comply with the requirements set out in the notification of the Reserve Bank of India governing the processing and settlement of export-related receipts facilitated by online payment gateways (“RBI Guidelines”).
In order to comply with the RBI Guidelines, our user agreement in India will be amended for the following services as follows:
- Any balance in and all future payments into your PayPal account may not be used to buy goods or services and must be transferred to your bank account in India within 7 days from the receipt of confirmation from the buyer in respect of the goods or services; and
- Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction.
This is very bad news for scores of Indian freelancers/SMBs which rely heavily on PayPal for international payments.