For Indian users; PayPal from today will have new limited Paypal guidelines restriction for money transfers, payments for goods and services and accepting money online. Starting from March 1st, you must not accept or receive payments exceeding $500 per transaction and also the money received must be transferred to your Indian bank account with in 7 days from the confirmation of the receipt.

There is one more major restriction implied which will disallow any PayPal user in India to purchase goods using the money in his Paypal Account, if he has to make a payment he must have to transfer money to his paypal account using his bank’s credit card.

The restriction implied has almost created a dead end to Indian PayPal users but it can’t be blamed as these restriction are implied as part of RBI Guidelines which controls the all the banks in India and wanted to have a overall control over Paypal transaction of its Indian Users. You can read the detailed announcement on PayPal.com.

Brief Excrepts from the PayPal 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”).

• 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
• Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction.