A shocking blog post title, but a bitter one to ingest. Last week one fine day when I woke up I found a mail from PayPal in my Inbox which stated :
Upcoming changes to PayPal User Agreement for India?
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.
We seek your understanding as we continue to employ our best efforts to comply with the RBI Guidelines in a timely manner.
This mail certainly declares that PayPal in India is close to dead. The stricter guidelines from Reserve Bank of India ensures a PayPal user does not make payments via PayPal to someone, the money should first be transferred to PayPal using your bank’s credit card. Also, all money received into PayPal must be transferred to your Indian bank account within 7 days.
The reasons which must have enforced such stricter guidelines must include tax theft from the Government of India by those who are not showing PayPal income in their Income Tax returns. Once your PayPal account money is transferred to your Bank account, your account may be monitored by RBI easily. However this is a setback to small businesses in India (SBI’s).
So If you have loads of PayPal dollars just go spendthrift this season and spend as much as you can before the Calender hits the deadline of 1st March, 2011.
More details and PayPal announcement : https://www.paypal-apac.com/india/