Online payments provider PayPal has sent an e-mail communication to Indian users informing them, that with effect from 26th September 2011, they will not be able to receive overseas payments exceeding US$ 500 per transaction, and that any balance in their PayPal account will be auto withdrawn out of their PayPal account on a daily basis. PayPal adds that the changes have been made to implement RBI’s Guidelines regarding the processing of export-related payments.PayPal has also limited accounts of users who have not added bank account numbers, PAN and Purpose code. These users will not be able to receive and withdraw payments.
We don’t understand how PayPal could force automatic withdrawals on its users without prior intimation, specially when RBI regulations give a time limit of seven days for the credit of the collection amount to an exporter. This would also translate into financial loss for users, since they cannot retain the amount, seeking a favorable exchange rate for withdrawal.
Earlier this year, PayPal had crippled its online wallet functionality, limiting Indian users from utilizing the amount in their PayPal accounts for online transactions, and had put a limit of $500 per transaction for receiving payments. It had also enforced a seven day limit for keeping payments in the account, after which they needed to be transferred to the account holder’s bank account.
In May, PayPal had made it mandatory for its users in India to furnish additional information, including a purpose code, permanent account number and bank account details, in order to receive payments.
Email Received From PayPal:
Hi Muhammed Abdul Kalam,
As communicated earlier this year, we are working to implement RBI’s Guidelines regarding the processing of export-related payments. As a result the following changes will be made to your PayPal account:
• Effective 26th September 2011, you will not be able to receive overseas payments exceeding US$ 500 per transaction into your PayPal account.
•Any balance will be auto withdrawn out of your PayPal account daily.
We understand the impact this may cause to your business and seek your support and understanding as we continue to work together with the RBI. We will keep you updated as our conversations progress.
In case you have any queries, please log into your PayPal account and click onContact Us at the bottom of any PayPal page.
Sincerely,
The PayPal Team
In News, Tech