A while ago, PayPal stopped personal payments and bank withdrawals to India but now many Indian IT Firms, Freelancers, SEOs, Developers and many others will take a sigh of relief as PayPal is resuming local bank withdrawals. According to PayPal email notification, Reserve Bank of India (RBI) has allowed bank withdrawals for the settlement of export of goods and services. The service will be officially resumed of 3rd March 2010.
PayPal has made some changes in this regard and Indian PayPal holders will have to fill a new field “Export Code” when withdrawing to local bank as per Indian law. On 1st march 2010, PayPal will get back to it’s Indian customers will guidelines of how they can withdraw funds to local bank accounts. However, Personal payments will remained suspended.
This is the email I received from PayPal:
We have been diligently working with the RBI and our business partners to resume Indian bank withdrawals for the thousands of Indian businesses who depend on PayPal to sell their goods or services in the global marketplace.
Today, we are happy to announce that the RBI has allowed us to continue local bank withdrawals for settlements for exports of goods and services. We are currently making changes to comply with Indian regulations for settlements for exports of goods and services, and we anticipate that, as of Wednesday, March 3rd, customers will be able to use our bank withdrawal service.
As part of the changes, you will be required to fill out a new field entitled ‘Export Code’ when you request a withdrawal. This information is required under the current laws of India in order to identify the nature of cross-border merchant transactions. On Monday, March 1st, we will be back in touch with specific instructions on how you can move your money into your bank account.
Moving forward, the RBI has told us that PayPal needs specific approvals to allow personal remittances to India, which we currently do not have. Until we get these approvals, personal payments into India will remain suspended. However, if you are an exporter, you will continue to be able to use the PayPal service for payments of goods and services. In fact, with the changes we are making to our system, PayPal is now set to be a more powerful engine for exporters in India. With purpose codes for export transactions and FIRCs (Foreign Inward Remittance Certificates), you should now be able to get the export related benefits you seek.
You can check the PayPal blog for additional updates.
We thank you for your business and for your patience during the past few weeks.