PayPal to resume local bank withdrawals to India

PayPal resuming local bank withdrawals to India

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.

If you enjoyed this post, make sure you subscribe to my RSS feed!

Check out these posts:
Author: Austin Comments: 3 comments Date: 27 Feb 2010
Categories: Money Tags: , , , ,

There are 3 comments. Leave a comment!

Name (Req)

E-mail (Req)

URI

Message
CommentLuv Enabled

Powered by WP Hashcash