I'm a US resident with US account, but I was looking over the Policy updates I was notified by email. Amendment to the PayPal User Agreement, Acceptable Use Policy, and Student Account Agreement Effective Date: Mar 10, 2010 * Amendment to the PayPal User Agreement Section 8 (Fees) of the User Agreement is amended to state that you may not send a Personal Payment to a recipient in India. Any payment sent to India must be for a Purchase Payment and will be charged the Purchase Payment fees. Very surprising. What leads to this? Discuss?
Because your bank (RBI) considers these payments remittance, and has no control over them. Paypal is not a licensed financial institution for remittance payments, which became required is a law passed a few years ago. Because of this, the whole India/Paypal system has crashed. None of this is Paypal's fault except the poor manner they handled the payment reversals, and that they allowed payments to go through well after they agreed to halt personal payments in India.