RBI Policy For Paypal
In this article I’ll address the topic of PayPal in India and Reserve Bank of India policies in more detail. However, if you came to this article stuck and are looking for good methods for online gambling deposits and withdrawals, I suggest reading our reviews of popular e-wallets Skrill and Neteller. Also, if you’re searching for an e-wallet that still allows Indians to spend money online using a prepaid virtual credit card see our review of EntroPay.
RBI Policies a Blow to Indian Commerce
In case you’re not aware, the Reserve Bank of India has been on a rampage as of late and is working overtime to make sure Indians do not have easy loopholes to hide money online or offshore. In February 2010, many Indian freelancers and business owners were devastated when RBI began enforcing the PAYMENT AND SETTLEMENT SYSTEMS ACT of 2007. While this Act signed by the President in December 2007 had been in effect since 12th August 2008, this was the first major shakeup that came as result of it.
PayPal Payments Reversed – Feb 2010
What happened is many Indian entrepreneurs woke one morning in early February 2011 to see PayPal payments they had received and were processing to their bank account had been fully reversed – meaning the funds went back to the person who had paid them. It took about a week of widespread panic for news to finally come out about what was happening. This first came with an announcement from PayPal that “personal” payments made from one individual to another had been suspended in India but commercial payments were still allowed. Unfortunately this message wasn’t helpful to the many users of PayPal who actually had commercial payments reversed. It later came to light this was all the result of the RBI deciding to enforce the PAYMENT AND SETTLEMENT SYSTEMS ACT 2007.
Apparently, the Reserve Bank of India sent notice on 27 January 2010 demanding PayPal immediately suspends payments to and from India as well as transfers to Indian banks. The NY Times provided a quote from and RBI spokesperson that read:
“Providers of cross-border money transfer service need prior authorization from the Reserve Bank under the Payment and Settlement Systems Act… PayPal does not have our authorization.”
After over a month of having their funds held hostage, Indians finally got relief in March 2010 when PayPal began servicing India again. New policy which came from a temporary PayPal and RBI agreement required anyone making a withdrawal to enter a purpose code, which PayPal would share with RBI or Indians authorities upon request. For example anyone running a website would need to look up the purpose code for Freelance Journalism. Also users were capped at how much they could withdrawal before they were forced to supply invoices, business documents and their PAN card.
New RBI Guidelines Mean More Hassle for PayPal Users
In late January 2011 PayPal modified their user agreement to state effective 1 March 2011 the following rules applied to all Indian account holders:
- All Indians much have a PAN Card and Source Code on file to use their PayPal Account.
- Payments from outside of India cannot be received for any amount greater than $500.00.
- Indians are forced to transfer PayPal payments received to their bank account within 7-days. This rule also stipulates the funds cannot be spent elsewhere. Indians looking to spend using PayPal need to upload funds via their credit card or bank account as received payments MUST be transferred to their bank account – they cannot be stored or spent elsewhere.
This was obviously a huge blow to Indian entrepreneurs who used PayPal – the world’s largest and most recognized online payment system.
Other RBI Actions Hurting Indian Sports Bettors
In the past, Indians using Neteller could request a Neteller branded debit card. This allowed them to access winnings paid to their sports betting account right at any local ATM machine. While Neteller can still be used as a banking method in India, a change in RBI policy caused former account holders to receive this cruel Valentine:
Due to changes made, these Neteller debit cards are no longer available effective 14 February 2011.
For a while EntroPay looked to be the solution, however on March 17, 2011 the same happened; EntroPay debit cards no longer worked.
If you’re interested on a thread for why this has all occurred see this one where some discussion takes place. For the most part though, all you need to be aware of is there have been lots of changes in recent years as to which deposit options and withdrawal options are available to Indians. Thankfully that is all covered here at Sports Betting using those two links I just provided.
