If you are a paypal user from India, now you must have received an e-mail from paypal saying from March 1st,
- You won’t be able to use the paypal balance to buy anything online.
- You won’t be able to receive payments more than USD $500 per transaction.
- You must transfer the payments to your bank account within 7 days of receiving any amount from anyone else.
Paypal said that they are forced to do this because of RBI unwanted restrictions. Bloggers are blaming Reserve Bank of India (RBI) for this ridiculous step, and some are planning to go on strike, with the saying that Paypal is now totally dead, with this oafish behavior of RBI.
RBI is saying that it’s keeping an eye on all the money transactions to/from India, to prevent the terrorist funding, laundering and so on. But, it has started some guidelines to regulate credit card companies and banks to help the consumers as well.
Paypal, is a business. and like any other business, it has only one goal to maximize their revenue. But if they’ll be coming under the RBI regulations, how could they charge exorbitant fees from us while sending, receiving, or while converting the money currency.
According to their official statement
In order to comply with the RBI guidelines, our user agreement in India will be amended.
You must withdraw money from paypal within 7 days : due to the reason that if PayPal keeps your money for the period more then 7 days, then according to the RBI guidelines, they will have to pay you Interest Charges on that money. But Paypal won’t pay the interest on that, never. So what did they do, they forced us to withdraw money immediately. Not to comply with RBI guidelines, but to abstain them.
Why you won’t be able to receive more then $500 per transaction? Again, according to the RBI guidelines, any financial entity must report all the transactions (above $500) to RBI and Government of India. But if they force the end users, to make sure that the transactions are less than $500, they don’t have to show anything to RBI. Again, compliance or abstain? You can decide it.
Why you won’t be able to buy any online service or product using the paypal balance money?
It’s due to the fact that, since paypal is not changing any of their terms and conditions to fix in the RBI guidelines. RBI and Government of India has no means to check what did you spent / earn online and so they can’t put taxes on that. Hence they forced paypal to comply, but paypal, being the old-timer of this game, knows how to deal with in this situation. Just Say Tata-Bye-Bye to the end users, but where the hell Users will go? This is just due to monopoly of PayPal.
In short, Paypal does not want itself to be regulated by RBI under any circumstances. Paypal don’t want to answer anyone how they do business, and why should they? They are free to do whatever they like, after all, what alternatives do the Indian paypal users have except getting unlimited restrictions by paypal.
So who is the thief here? Paypal or RBI? The facts lies in front of you.