It now however appears that PayPal’s India operations are still under the scrutiny of government and if they aren’t able to satisfy the regulators, be prepared for another disruption. 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.†You may dislike PayPal for their high transaction fees or because they have their own currency exchange rates, but the fact is that they are more or less a monopoly and there aren’t too many good PayPal alternatives in India yet. I just hope this tussle between the RBI and PayPal get resolved soon and that the government makes it easy for other online payment services to enter and operate in India so that we have more choices. Source : Amit
Are u sure the reference are rite in the blog ?? coz the author last time without knowing the facts made a post saying "How to Get an Importer Exporter Code in India"
I thought that the recent changes and implementation of new procedure was made, only after consultation with RBI. Now... it appears that it is just a procedure which RBI is yet to certify and another deadline is now 30th April! I sincerely hope RBI and Paypal work together and find a middle ground quickly... and allow all of us to be at peace! Regards, RightMan
This is a personal point of view, you can't generalize it as "not solved". PayPal is not a children game, it's a serious business and they work hard on resolving things which took place due to misunderstandings. Our govt. changes the rules and regulations very often as if they are still not stable in business (e.g. PAN for every transaction from April 1), so every business involved in transacting money should get your PAN before sending you any amount, they need to change their codes, their huge DB and logic for processing payments. I don't think what currently is forced by the RBI is right - correct me if I am wrong -- RBI says all PayPal transactions are "Remittance", they all need Purpose code as if the services/goods were "exported". Think of a situation, you have clients in India and they prefer PayPal to pay your bills, whether in INR or USD. You get the money in your PP account sent by an Indian but that will be counted as remittance - the only reason is is through PayPal which is a foreign company. I do not see any Indian alternative of that level and can not think about moving in near future. - Vijay
Paypal will solve their problems because they dont want to loose their customers in countries like India who are using Paypal a lot.
Let's hope that they stay awake this time and don't messup again with RBI, really cannot go through the same frustrating times again.
Paypal does have a banking license in europe and are FDIC insured in US (remember they got license as a bank in luxembourg). Paypal is way too big than reserve bank itself and they have more dollar reserves than reserve bank of india has. They wont budge to the bullying with RBI but i am sure they will cooperate with RBI after all they are not doing anything illegal. what is there without paypal? Paypal is the reserve bank of the online world. If the issue goes out of hand, only we indian freelancers will be screwed and we have to take this to political level. Indian govt policies and regulations need to keep up with the fast pacing other countries and emerging new technologies. Think about this! You own a dot com like twitter and if you tell people in India, that you earn million dollars monthly, would anybody believe it? You would look like a fool in front of them. Lets face it! Nobody in India likes you earning a lot of money online. If its the same in US, nobody cares how much you make as long as you are not involved illegal activities. There is too much at stake in our country and why does a common man had to take the suffering everytime? I think somebody from DP needs to win election and become a policitian to represent Indian freelancers. i do have a dream of entering politics but lets see!
oh! forgot to say this. There is a very simple solution for paypal without going through RBI and indian regulations. Do a wire transfer to Indian banks in USD directly from american banks . (OR) An arrangement for sending checks to Indians through DHL in dollar or ruppees. Cant get simpler than this for paypal! We all get our money with better exchange rate, paypal will be free from trouble, and RBI gets to keep foreign exhange.