Well — here comes the final blow — Indian users of PayPal will no longer be allowed to maintain any PayPal balance in their PayPal account for more than 7 days & cannot receive payments greater than $500 (freelancers are gonna feel the pinch).

Here’s what PayPal sent out in its latest email to users in India on Jan 29, 2011:

As part of our commitment to provide a high level of customer service, we would like to give you a 30-day advance notice on changes to our user agreement for India.

With effect from 1 March 2011, you are required to comply with the requirements set out in the notification of the Reserve Bank of India governing the processing and settlement of export-related receipts facilitated by online payment gateways (“RBI Guidelines”).

In order to comply with the RBI Guidelines, our user agreement in India will be amended for the following services as follows:

1. Any balance in and all future payments into your PayPal account may not be used to buy goods or services and must be transferred to your bank account in India within 7 days from the receipt of confirmation from the buyer in respect of the goods or services; and
   
2. Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction.

We seek your understanding as we continue to employ our best efforts to comply with the RBI Guidelines in a timely manner.

We regret any inconvenience caused to you and hope the advance notice will enable you to plan your future use of our services accordingly.

Sincerely,

The PayPal Team

And here are some Frequently Asked Questions from PayPal:

Q: Why will PayPal not allow me to receive more than US$500?
Starting 1 March, 2011, PayPal customers in India will not be allowed to receive payments for any export-related goods or services for an amount exceeding US$500 per transaction. This change is to ensure that we continue to comply with the RBI Guidelines.

Q: Why will PayPal not allow me to keep money in my PayPal balance?
Starting 1 March, 2011, PayPal customers in India will not be able to keep money in their PayPal account balance. Instead, all money received into a PayPal account must be transferred to a customer’s India bank account within 7 days from the receipt of confirmation from the buyer in respect of the good or services. This change is to ensure that we continue to comply with the RBI Guidelines.

Q: Will my customers be able to complete their checkout with their PayPal account balance?
We’re glad that you offer PayPal to your customers. Unfortunately, we will not allow customers in India to send money from their PayPal account balance starting 1 March, 2011. This means that your customers will need to link a credit card to their account in before sending you money with PayPal. This change is to ensure that we continue to comply with the RBI Guidelines.

Q: The customers on my website are not able to complete purchase or pay via PayPal. Why?
Starting 1 March, 2011, PayPal customers in India will not be allowed to receive payments for any export-related goods or services for an amount exceeding US$500 per transaction. If you are listing products greater than US$500 per transaction then you may need to seek alternative methods of payment. This change is to ensure that we continue to comply with the RBI Guidelines.

Q: What is meant by receipt of confirmation from the buyer in respect of goods and services?
As an exporter of products or services abroad, you need to ensure that your buyer has received the product or services as per specifications set out on your website. As an exporter of goods, you may withdraw the balance to your bank account in India upon reasonable consideration of shipping time and other clearances such as excise and customs for the destination country. As an exporter of services, you may withdraw the balance to your bank account in India upon receipt of payment from your buyer into your PayPal account.

This is a post from: The Orange Paper ~ A blog about Personal Finance, Indian Stock Market, Financial Planning, Investing, Wealth Building, Taxes and more.

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Barely a few days ago, PayPal had announced that Indian users would not be able to withdraw electronically from July 29, 2010. However, PayPal has announced today that it will continue to offer electronic withdrawals.

Here’s the email PayPal has sent out:

We’ve received good news. You can continue to enjoy electronic withdrawals just as you did before.

While we have received your appreciation for the advanced notice and the refund of the cheque processing fee, we also have heard loud and clear that you highly value the ease-of-use of our electronic withdrawal service. Our customers are our number one priority and we are working tirelessly to improve our service.

Thank you for your patience and in appreciation for your continued support, we will still provide the $5 USD processing fee refund for any cheque withdrawals made from July 29, 2010 until further notice.

This is a post from: The Orange Paper ~ A blog about Personal Finance, Indian Stock Market, Financial Planning, Investing, Wealth Building, Taxes and more.

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PayPal has announced another change in withdrawal of funds from PayPal Accounts for Indian Users.

In accordance with regulatory instructions, PayPal is bringing in a change in their withdrawal functionality in India starting on August 1, 2010. At present you can request for either an electronic or cheque withdrawal of funds from your PayPal account if you are an India user.

From July 29, 2010 onwards, you will only be able to request for a cheque withdrawal of funds from your PayPal account.

To request for a cheque withdrawal:

1. Log into your PayPal account, click on ‘Withdraw’.
2. Click on the ‘Request a cheque from PayPal‘ link.
3. Enter the withdrawal amount and select your mailing address, then click ‘Continue‘.
4. Click ‘Submit’ to confirm your request.

Checkout screenshots here for the above points.

In order to help users with this change and until further notice, PayPal will refund the $5 USD cheque withdrawal fee to you cheque withdrawals made on July 29, 2010 onwards.

This is a post from: The Orange Paper ~ A blog about Personal Finance, Indian Stock Market, Financial Planning, Investing, Wealth Building, Taxes and more.

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If you’re a Seller from India and accept monies into your PayPal account, well, PayPal has got some news.

PayPal has sent out the following email to users based in India:

This is a post from: The Orange Paper ~ A blog about Personal Finance, Indian Stock Market, Financial Planning, Investing, Wealth Building, Taxes and more.

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So finally you’ve decided that you’re going to take that well deserved vacation — away from all the madness at work. I won’t get into why you need a holiday but instead provide you with money tips when planning a holiday. What if your credit card isn’t accepted and you aren’t getting a decent exchange rate for your native currency? Here’s the checklist:

1. Take along your major credit cards — make sure they are really credit cards and not just debit cards with a credit card company’s logo on them. Many locations require a credit card and will not accept a debit card, so they may have limited use on your travel.

2.  Notify your credit card company of your trip before you leave. The unfamiliar spending patters might cause them to suspect that the card is being used fraudulently and delay your approvals. Further, they will explain many of the services that they can provide while you are on your trip.

3. Inform your bank of your trip too so that arrangements can be made to pay bills that will come due while you are gone. Incase due to any reason you still need to make a bill payment while on your trip, all you need is internet access, debit card/netbanking login. Visit www.visabillpay.in and pay your bills (Indian billers only) from anywhere on the globe.

4. Confirm from your credit card company if your PIN number will work in the country you are visiting. They can also issue you another PIN number if your current PIN is unacceptable in the foreign bank’s system.

5. Ask your banker all about cash advance, ATM, foreign purchase and foreign exchange rate policies and fees.

6. Find out the number you can reach your bank or credit card company while you are abroad. The 800 number listed on the back of your card may not work from foreign locations.

7. Check for currency conversion rates of your credit card companies. In that case you can find the most economical card on which to place your foreign purchases.

8. Using the ATM card is also another idea. The ATM will issue money in local currency. But better check: some banks charge a high usage fee for their ATMs. Although, even high ATM fees may be less than others will charge for currency exchanges. Note, your ATM card might NOT work at any foreign bank ATM — from my personal experience, when on a trip to Thailand I found out that a VISA debit card issued in India would only work at Bangkok Bank ATMs.

9. Exchange your currency at the bank’s wholesale exchange rate.

10. Best currency conversion option is to carry US dollars. It’s easier to exchange.

11. One final tip, yeah I know it’s the eleventh one  –  from my personal experience nothing beats having foreign currency (USD / GBP / EUR) in hard cash when traveling abroad. Using your ATM card/ debit card/ credit card in a foreign country will be anytime expensive when compared to having converted your local currency into foreign currency before you leave the country.

Photo credit: nattu

This is a post from: The Orange Paper ~ A blog about Personal Finance, Indian Stock Market, Financial Planning, Investing, Wealth Building, Taxes and more.

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Just received an email from PayPal stating RBI has allowed them to continue local bank withdrawals for settlements for exports of goods and services. Paypal anticipates that, as of Wednesday, March 3rd, customers will be able to use their bank withdrawal service. However, the bad news is — personal payments into India still stand suspended till further notice.

Below is the email I received from PayPal:

We have been diligently working with the RBI and our business partners to resume Indian bank withdrawals for the thousands of Indian businesses who depend on PayPal to sell their goods or services in the global marketplace.

Today, we are happy to announce that the RBI has allowed us to continue local bank withdrawals for settlements for exports of goods and services.  We are currently making changes to comply with Indian regulations for settlements for exports of goods and services, and we anticipate that, as of Wednesday, March 3rd, customers will be able to use our bank withdrawal service.

As part of the changes, you will be required to fill out a new field entitled ‘Export Code’ when you request a withdrawal. This information is required under the current laws of India in order to identify the nature of cross-border merchant transactions.

On Monday, March 1st, we will be back in touch with specific instructions on how you can move your money into your bank account.

Moving forward, the RBI has told us that PayPal needs specific approvals to allow personal remittances to India, which we currently do not have. Until we get these approvals, personal payments into India will remain suspended.  However, if you are an exporter, you will continue to be able to use the PayPal service for payments of goods and services.  In fact, with the changes we are making to our system, PayPal is now set to be a more powerful engine for exporters in India. With purpose codes for export transactions and FIRCs (Foreign Inward Remittance Certificates), you should now be able to get the export related benefits you seek.

The Importer Exporter Code ['IEC'], is normally required by manufacturers and companies for international trade but with this new RBI ruling, the hundreds and thousands small companies, freelances etc who rely on PayPal for foreign payments might also have to apply for an IE code.

Let’s keep our fingers crossed and hope this issue gets resolved fast.

*Update*: Check out How to obtain an IE Code

*Update*: The PayPal blog incorrectly mentioned “Export Code” in their previous blog post whereas they actually meant “Purpose Codes”. Unlike IEC that is unique for every individual / business, Purpose Codes are pre-defined by the RBI and their value varies depending on the type of service that you are offering to the client. Checkout this post on Amit Agarwal’s blog where he mentions about some select purpose codes that are most relevant to us.

This is a post from: The Orange Paper ~ A blog about Personal Finance, Indian Stock Market, Financial Planning, Investing, Wealth Building, Taxes and more.

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photo by andrewinpompey

Everyone is desperate to find a remedy that will cure their financial illness and help them recover their financial health. They expect the financial experts to provide them with remedies, forgetting the fact that it is these experts who created this financial mess. Let us tap into the financial wisdom of our elders and become financially wiser.

Hardwork: All hard work bring a profit, but mere talk leads only to poverty.

Laziness: A sleeping lobster is carried away by the water current.

Earnings: Never depend on a single source of income. (At least make your investment get you second earning).

Spending: Don’t save what is left after spending; spend what is left after saving.

Borrowings: The borrower becomes the lender’s slave.

Accounting: It’s no use carrying an umbrella, if your shoes are leaking.

Auditing: Beware of little expenses; a small leak can sink a large ship.

Risk-taking: Never test the depth of the river with both feet. (Have an alternate plan ready)

Investment: Don’t put all your eggs in one basket.

For those of you who have already been practicing these principles — great, I’m certain you are already financially healthy. I’m equally confident that those who resolve to practicing these principles will quickly regain their financial health.

This is a post from: The Orange Paper ~ A blog about Personal Finance, Indian Stock Market, Financial Planning, Investing, Wealth Building, Taxes and more.

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photo by faeryboots

Received this via email, thought it’s interesting to share with you all — It’s an interesting article by Yogesh Chhabria.

LATELY, I have been thinking a lot about the Lehman crisis. Spending money that they didn’t have and going beyond their means is one of the main reasons for their situation today. In fact that is the cause for the current economic crisis in the US.

When I see all this happening, I can only remember the good old days. Then, karz was bad. People looked down upon those who took loans. Parents would not give their daughter’s hand in marriage to a man with loans.

But of course, the times have changed now. Everyone I know has a loan. The buzz word is EMI (equated monthly installment). Today, you can buy everything on EMI – a house, a television, even an i-Pod. In fact I know of someone who just bought a fancy BMW 3 series on EMI, instead of buying a cheaper car outright with cash. I mostly prefer to take public transport, but then I am an old man with old thoughts!

Anyway, coming back to what caused the crisis. Imagine having Rs 2 lakh in your bank account, no regular income, yet buying a house worth Rs 65 lakh, in the hope of selling it for a higher price. Even if the price of the house fell by just 5 per cent (that is Rs 3 lakh), you will go bankrupt. This is what Lehman Brothers did; with around USD 20 billion they went and bought assets worth over USD 600 billion. Isn’t it suicidal and simply foolish?

I am sure things would have been different, had I been the head of Lehman Brothers. But who wants an old conservative man like me to head a complex financial institution.

But there are a few lessons that we can learn:

1. Live a balanced life and avoid overspending.

2. Don’t buy things we don’t need.

3. Don’t buy branded goods.

4. Don’t buy excess food, cloths, cosmetics, footwear, electronics and fashion accessories. Just think before you buy.

Tip: World still has a lot of growth ahead and the future holds immense opportunities for us. Let us make the most of it and save and invest it wisely instead of wasting our precious little on things we don’t need.

5. Try to balance life with work (No one is happy to work in their professions).

6. Don’t stress out yourself, after work try to do some extra activities like swimming, yoga, walking, running where you can divert your mind from stress.

A thumb rule: Health is more important than money.

7. Try to understand each other (Wife and Husband) in financial matters and help each other.

Tip: As soon as you get your monthly salary, set aside a fixed amount, usually 35%, for insurance, savings and investments. You can then spend the rest.

8. Not all loans are bad. Loans that are ‘need based’ (home loans, education loans) can always find a place in your finances against those that are largely ‘want based’ (credit cards, personal loans, car loans).

9. Borrow only if repayment is financially comfortable.

A thumb rule: Keep EMIs within 35 to 45% of your monthly income.

In that respect, there is one American who I really respect – Warren Buffet. He has lived in the same ordinary house for over three decades, drives his own medium sized car and leads an extremely regular ‘middle class’ life. If that’s all it takes for the richest person on earth to be happy, why do all of us need to take extra stress just so that we can get things which aren’t even essential?

This is a post from: The Orange Paper ~ A blog about Personal Finance, Indian Stock Market, Financial Planning, Investing, Wealth Building, Taxes and more.

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Photo by Sam UL

I filled up my car’s fuel tank, and I thought fuel has become really expensive after the recent price hike. But then I compared it with other common liquids and did some quick calculations, and I felt a little better.

To know why, see the results below – you’ll be surprised at how outrageous some other prices are!

Diesel (regular) in Mumbai : Rs.36.08 per litre

Petrol (speed) in Mumbai : Rs.52 per litre

Coca Cola 330 ml can Rs.20 = Rs.61 per litre

Dettol antiseptic 100 ml Rs.20 = Rs.200 per litre

Radiator coolant 500 ml Rs.160 = Rs.320 per litre

Pantene conditioner 400 ml Rs.165 = Rs.413 per litre

Medicinal mouthwash like Listerine 100 ml Rs.45 = Rs. 450 per litre

Red Bull 150 ml can Rs.75 = Rs.500 per litre

Corex cough syrup 100 ml Rs.57 = Rs. 570 per litre

Evian water 500 ml Rs. 330 = Rs. 660 per litre Rs. 660 for a litre of WATER???!!! And the buyers don’t even know the source (Evian spelled backwards is Naive.)

Kores whiteout 15 ml Rs. 15 = Rs. 1000 per litre

Cup of coffee at any decent business hotel 100 ml Rs. 50 = Rs. 500 per litre

Old Spice after shave lotion 100 ml Rs. 175 = Rs. 1750 per litre

Pure almond oil 25 ml Rs. 68 = Rs. 2720 per litre

And this is the REAL KICKER…

HP deskjet colour ink cartridge 21 ml Rs.1900 = Rs. 90476 per litre!!!

Now you know why computer printers are so cheap? So they have you hooked for the ink!

So, the next time you’re at the pump, don’t curse our honourable Petroleum minister – just be glad your car doesn’t run on cough syrup, after shave, coffee, or God forbid, printer ink!

This is a post from: The Orange Paper ~ A blog about Personal Finance, Indian Stock Market, Financial Planning, Investing, Wealth Building, Taxes and more.

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