Paypal's Withdrawal suspended for Indian Users [updated]

PayPal , one of the Best Online secure Payment Processor is going to be suspend Withdrawing funds to Bank Account. This action was made after the PayPal did not go accordance with Reserve Bank of India(RBI) . Similar problem occured in the beginning of this year( February 2010) . This Service was one of the Best for withdrawing among other payment solutions.

I use PayPal , Alertpay , Neteller , Liberty Reserve (LR) . Yet i loved PayPal because it made me to withdraw funds easier with low fees of Rs.50(around 1$) and receive money in my bank account with in 2 to 5 days .

I was annoyed after receiving the mail today. However the electronic Withdrawal is available upto 29 July(tomorrow)  after that you can receive money only via Cheque which costs you 5$ as service fees.

paypal indian user issueEmail from PayPal

I still wonder whether this is a temporary situation or Permanent one. Hope for the best.

To withdraw funds through Cheque, check out PayPal India page @

Update: I say a post in a blog about a reply from PayPal’s Chief GM ,

?Alpana Killawala, who is the Chief General Manager at the Reserve Bank of India, told Jaimon Joseph the actual reason why PayPal had to temporarily stop transactions in India:

All money flowing across Indian borders is subject to two major laws. The Foreign Exchange Management Act (FEMA) and the Payments and Settlements Act of 2007. According to those laws, organizations like PayPal should have submitted themselves to scrutiny by the RBI. They hadn?t, so they were pulled up.

The Reserve Bank of India has now sent a detailed questionnaire to PayPal that they are expected to answer by April 30, 2010. If PayPal is unable to satisfy the regulators, Alpana says, ?their operations could be disrupted again.?

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Update 2 (31/07/2010):

Hurray ! The Electronic withdrawal is back to normal. I received an email from paypal . Hope you would have also received the email.

Paypal resuming bank

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  1. A new fact about Pay Pal :

    I applied for a charity account with Pay pal because its free and supported by vbulletin software for payment subscription, I have all the documents like NGO Registration certificate, Memorandum of Society, Society PAN card, and the Bank details , bank details were verified by the Pay Pal by depositing amount of Rs. 2 and 40 paisa, after submitting all the document as per said in their website and in their emails, they denied me for the account, just because they have no tie-up with India regarding charity account, what the hell is this, why the pay pal people should not mention at the time sign up process. I have wasted around 1000/- rs in doing fax to pay pal and after 4-5 days they denied.

    Don’t apply for a charity account with pay pal if you are living in India. Just wastage of time and money.

    • Very much align with Sonia, PayPal is doing monopoly here, transaction fee while transfer amount to your bank……Huge.

      No other option available here…. ccavenue is too expensive.


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