PayPal: Resuming local bank withdrawals to India
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PayPal is a major banking service working worldwide. They are major instrument for overseas payments to exporters, service providers and e-sellers. Sellers and buyers in E bay and Amazon frequently use the services of PayPal.
Large Numbers of Non Resident Indians (NRI) also use PayPal to remit money to their friends and family in India. Personal payments to and from India and transfers to local banks in India had been suspended from February 9, 2010 due to a notification from RBI.
During this time, customers could make commercial payments to India but merchants could not withdraw funds in Rupees from local Indian banks. PayPal authorities regretted the inconvenience customers faced in India and around the world.
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PayPal resumes local bank withdrawls in India
PayPal had been working with their business partners and the Reserve Bank of India (RBI) to resume local bank withdrawals in India for the thousands of Indian businesses who depend on PayPal for their overseas payments. PayPal has become an essential and convenient tool for them to sell their goods or services in the global market place.
PayPal has now announced that the RBI has allowed them to continue local bank withdrawal service in India for payments of exports of goods and services. They are currently making changes to comply with Indian regulations for settlements for exports of goods and services and they anticipate that customers will be able to use their bank withdrawal services from March 3, 2010.
Customers will have to fill out a new field entitled “Export Code” when they request for withdrawals in local banks. This particular information is required under the current Indian Laws to identify the nature of overseas business transactions.
PayPal will be back in touch with specific instructions on how customers in India can transfer their money into their bank accounts on Monday, March 1, 2010.
The Reserve Bank of India has informed PayPal that they need specific approvals to allow personal remittances to India. They do not get the approval so far. Personal payments into India will remain suspended til they get these statutory approvals. However, if a client is an exporter he or she can continue to use the PayPal services for payments of goods or services sold overseas.
PayPal is set to be a more powerful entity for exporters in India with the changes they are making to their system. Customers would be able to get export related benefits with purpose codes for export transactions and Foreign Inward Remittance Certificates (FIRC)
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Why PayPal did suspended local bank transfers and personal payments in India?
PayPal suspended these services (local bank transfers and personal payments) to respond to inquiries from the regulators in India. They had to answer specifically questions on personal payments that constitute remittances into India.
They had worked with their bank processing partners in India and the regulators to get the problem resolved. PayPal realized that this was causing considerable inconvenience to their customers. They wanted to reassure their customers that this was a top priority for PayPal.
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When will personal payments be turned back on?
The regulators in India recently informed PayPal about revised licensing rules.PayPal is now actively engaged in process of complying with these revised rules. Personal payments to and from India will be remained suspended for at least few months until PayPal fully resolve the questions from the Indian regulators.
Farhad Irani, Head of Indian operations, PayPal informed that Customers will be reimbursed for any withdrawal fee charges.
He told that It has always been possible for sellers to request a check and this option is still available from the Withdraw Money tab of PayPal account. It usually takes five to seven working days to receive a check when a customer request a check and PayPal normally charges a fee of $ 5 for that. They are trying their best to help sellers during this difficult time. PayPal will refund the check withdrawal fee back to PayPal account of the Indian customers within a week. Though this is not ideal situation but he will appreciate customers' patience.
He added that India is a very special market and continued success of Indians in overseas markets is very precious for them.
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