New PayPal rules for Indian Users effective from 1st March 2011

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Received an email this morning from PayPal, this can cause headache for Indian PayPal Users (Specially Freelancer, Merchants who are fully depended on Paypal), According to which PayPal Indian users cannot use their account balance for purchase of any Goods or Services and balance needs to be transferred into Indian Bank Account within 7 days from date of receiving it, this means you can only make purchase by Credit Card linked into PayPal.
All this has happens because of new rules made by Reserve Bank of India (RBI)

This New Rules will be effective from 1st March 2011

Email from PayPal

Dear Xxxxxx Xxxxx,

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. For further information, click here.

If you have any questions, please contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page. We sincerely thank you for your patience and continued support.

Sincerely,
The PayPal Team

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