In a recent email and blog post, PayPal said that they will be restraining Indian users from using the money in their PayPal account from purchasing anything along with putting a stipulation that they have to withdraw the money within 7 days. In addition to that, they have also said that Indian users cannot accept payments more than $500.
First of we take a look at why PayPal cannot keep your money with them for more than 7 days and then delve into the $500 restriction they will be putting into place.
Because if PayPal keeps the money with them, they have to be regulated as a bank and PayPal does not want that to happen. Any entity which provides on-demand payments have to be regulated as a bank as per RBI rules. With this new change PayPal is basically circumnavigating this regulation so that they don’t have to answer questions to any government about how they conduct business and why they charge an exorbitant amount to customers to accept payments.
Is PayPal practically f*cking all Indians?
Their business heads know how to circumnavigate against a country’s policies and that they are adamant about accepting regulations because that would mean that they have to cut down on their charges and also ensure that they do follow all guidelines laid down for a bank.
But what about the $500 transaction limit?
This is a government and RBI mandated thing. All entities who bring cash-flow into India have to basically report transactions above $500 to the RBI and government. PayPal is basically just circumnavigating around this mandate by restricting the payments to $500. Once they do this, they have no obligation to report it to the RBI or the Indian government.
Are the new changes by PayPal just about screwing the RBI, Indian Government and people who use their service?
If PayPal accepts the RBI regulations they have to be treated a bank and they are hell bent on not doing it. They are basically finding ways to get over it because once they become a bank they come under a different set of rules. Right now PayPal is a monetary service but they are not like say SBI, ICICI, HSBC or Citibank and do not have to adhere to the rules. Once you become a bank, you have stringent rules which PayPal doesn't want to follow.
I feel that PayPal is basically cheating the RBI, Indian government and Indian users because they don’t want to be regulated. All I can say is that we need to boycott these services and switch to some alternatives.
Though these things may make my statement that RBI is in no fault at this sound untrue, but you have to understand that these rules have been in place in 2004 and some of them since 1999. So saying that RBI is screwing PayPal is basically wrong. PayPal has been floundering these rules since they came into India and the RBI is just reining them in. They might have given them an option to change to being a bank or stop flouting the rules laid down by the Government of India. I believe you will understand what PayPal chose to do.
Source: Techi-Buzz.com
First of we take a look at why PayPal cannot keep your money with them for more than 7 days and then delve into the $500 restriction they will be putting into place.
Because if PayPal keeps the money with them, they have to be regulated as a bank and PayPal does not want that to happen. Any entity which provides on-demand payments have to be regulated as a bank as per RBI rules. With this new change PayPal is basically circumnavigating this regulation so that they don’t have to answer questions to any government about how they conduct business and why they charge an exorbitant amount to customers to accept payments.
Is PayPal practically f*cking all Indians?
Their business heads know how to circumnavigate against a country’s policies and that they are adamant about accepting regulations because that would mean that they have to cut down on their charges and also ensure that they do follow all guidelines laid down for a bank.
But what about the $500 transaction limit?
This is a government and RBI mandated thing. All entities who bring cash-flow into India have to basically report transactions above $500 to the RBI and government. PayPal is basically just circumnavigating around this mandate by restricting the payments to $500. Once they do this, they have no obligation to report it to the RBI or the Indian government.
Are the new changes by PayPal just about screwing the RBI, Indian Government and people who use their service?
If PayPal accepts the RBI regulations they have to be treated a bank and they are hell bent on not doing it. They are basically finding ways to get over it because once they become a bank they come under a different set of rules. Right now PayPal is a monetary service but they are not like say SBI, ICICI, HSBC or Citibank and do not have to adhere to the rules. Once you become a bank, you have stringent rules which PayPal doesn't want to follow.
I feel that PayPal is basically cheating the RBI, Indian government and Indian users because they don’t want to be regulated. All I can say is that we need to boycott these services and switch to some alternatives.
Though these things may make my statement that RBI is in no fault at this sound untrue, but you have to understand that these rules have been in place in 2004 and some of them since 1999. So saying that RBI is screwing PayPal is basically wrong. PayPal has been floundering these rules since they came into India and the RBI is just reining them in. They might have given them an option to change to being a bank or stop flouting the rules laid down by the Government of India. I believe you will understand what PayPal chose to do.
Source: Techi-Buzz.com
