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January 29, 2011
RBI forces Paypal to amend user agreement
The Reserve Bank of India (RBI) has forced Paypal to amend its user agreement for its Indian customers. According to the changed policy, an Indian Paypal user
- cannot send/receive money for personal transactions.
- cannot receive amount greater than $500 USD.
- cannot send money using Paypal balance (only credit cards)
- must withdraw all the paypal balance within 7 days of receipt.
I wonder what is the logic behind enforcing credit card rule for sending payments? May be the Indian banks felt threatened because of the growth of Paypal.
It will also be interesting to see how Paypal manages the 7 days withdrawal rule. They will be flooded with NEFT and cheque withdrawal requests.
With so many changes, this is surely going to impact Paypal's growth and popularity in India. Unfortunately, unless the banking and foreign currency rules in India are modified, this change will remain with us for a foreseeable future.
Posted by manish at January 29, 2011 11:30 AM