PayPal India now makes it mandatory for all Paypal users in India to add Purpose Code, PAN, Bank Account to withdraw money from Paypal. This is in continuation of its restrictions to comply with Indian Reserve Bank of India (RBI) guidelines.
Paypal India Restrictions
In an email sent out to all Paypal India users, they informed all PayPal users in India will need to add following details to continue export-related payments and withdraw money: Purpose code, PAN Number and Bank account number in India.
Earlier only PAN and mobile number were mandatory and users were able to withdraw via cheque (limit of $2500 per month) without a purpose code. Now Paypal requires that you need to add a PAN number, compulsorily specify a purpose code identifying type of payment and specify a bank account number too to verify your bank transactions.
Earlier RBI had stopped Paypal payments to and from India, which was later restored after Paypal complied with law guidelines. Then Paypal restricted Indian users that that they may not use Paypal funds to buy goods or services and balance funds must be transferred to bank account in India within 7 days. In addition, Export-related payments for goods and services to PayPal may not exceed US$500 per transaction.
That meant a lot of small businesses and bloggers now had to disclose income sources, transfer money back to India and pay taxes on the newly declared income. This was a step by RBI to get more accountability of money transfer using Paypal in India. Now the requirements are more tight as people find Paypal alternatives.
How have these rules affected your Paypal experience in India?Tags » Paypal