In terms of recent guidelines of Reserve Bank of India (RBI) on international money transfer companies such as PayPal India, PayPal has imposed a new payment limits to all Indians. In essence, it has amended the already existing PayPal user agreement for Indians to comply with RBI newly promulgated guidelines associated with processing and settlement of export-import proceeds held by online payment companies.
Consequently, PayPal has suspended personal PayPal payment including electronic bank remittances to India. At the same time, it has announced a purpose code for any bank in terms of RBI guidelines. Hence, PayPal users are subject to new limits which only allow them to deal with small value money transfers.
More specifically, PayPal users would have to comply with the under mentioned requirements
Currently PayPal is operating as a payment gateway in India and hence as a resident, you are able to use your card for making payments online. For the business customers, however RBI has specifically come out with a circular which allows PayPal (or for that matter any other payment gateway) to handle the export related inwards up to a maximum transaction value of USD 3000.
One may wonder why such strict money transfer regulations were imposed on online money transfer companies such as PayPal. On the one hand, RBI has found out many PayPal account holders shop online with the foreign funds that they earned without transferring it into India or to their bank accounts. On the other hand, RBI thinks many PayPal account holders use this method to evade taxes by declaring lower business turnover. Such tax invasion has grown out of proportion; as such RBI has intervened to curb the menace that affects the Indian economy.
In order to make the PayPal user more aware, the following Questions & Answers were put forward:
Currently PayPal is operating as a payment gateway in India and hence as a resident, you are able to use your card for making payments online. For the business customers, however RBI has specifically come out with a circular which allows PayPal (or for that matter any other payment gateway) to handle the export related inwards up to a maximum transaction value of USD 3000.