Paypal India’s woes continues. PayPal will stop electronic withdrawal for Indian users from July 29th, 2010. Currently users can request for either an electronic or cheque withdrawal of funds from your PayPal account if you are an India user. This comes just a few weeks after suspending personal payments in India and making PAN cards compulsory.

In accordance with regulatory instructions, we would like to notify you about a change in our withdrawal functionality in India starting on August 1, 2010. At present you can request for either an electronic or cheque withdrawal of funds from your PayPal account if you are an India user.

From July 29, 2010 onwards, you will only be able to request for a cheque withdrawal of funds from your PayPal account.

While we are working hard to restore the electronic withdrawal service, in the meantime, we are bringing this matter to your attention so that you can plan your future withdrawal activities accordingly.

To request for a cheque withdrawal:

  • Log into your PayPal account, click on ‘Withdraw’.
  • Click on the ‘Request a cheque from PayPal’ link.
  • Enter the withdrawal amount and select your mailing address, then click ‘Continue’.
  • Click ‘Submit’ to confirm your request.

One good thing is that Paypal will refund $5 fee which users have had to be paid if they were using a cheque withdrawal. Personally, I am fine with this, but some people feel the new policy puts them at disadvantage.

Rahul Bansal of DW notes that foreign currency cheques normally takes 21 days to clear and additional 5-6 days of Postal delays, which means once you request for a cheque, you won’t have the money in hand for at-least a month. If waiting for a long time is not a concern for you, availing cheque withdrawal is anytime better than electronic transfer as I have seen that the exchange rate provided by Paypal is always lesser than what Indian Banks provide.

Update: Paypal offers cheques in local currency [INR], but the cheques are sent via normal post which would take a fortnight at-least to arrive.

What’s your take on the whole issue?

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Raju is the founder-editor of Technology Personalized. A proud geek and an Internet freak, who is also a social networking enthusiast. You can follow him on Facebook and on Twitter. Mail Raju PP. Follow rajupp


8 thoughts on “PayPal or PayFoe? No Electronic Transfer for India Now

  1. It looks like Paypal or RBI has not time for each other to sort out things. First they made PAN card compulsory (not so for withdrawing). Now, they have discontinued Bank Transfers. Seems as if, Paypal has no clear guide lines from RBI.
    I feel like closing my account and moving to some other “reliable” service.

  2. @Raju,

    It is mentioned it is a foreign currency cheque and now as a reply to Mayur the currency is INR. Confusing readers…..

  3. india is poor country and [edited] RBI’s and regulators never allow someone else to Earn Money, Bludy government and Regulators Never allow indian to do web Business

    • Ignoring the spelling mistakes and disturbing language, I would say RBI can’t be held responsible for the whole thing. Remember, Paypal is not the only one doing business in India. If other companies can work well within rules, what’s stopping Paypal?

  4. I contacted PayPal support and got the confirmation that

    “Yes, the check that you’ll be receiving will be under INR. The check
    cannot be cashed; instead, you need to deposit it to your local bank
    first to be able to get a hold of the funds. The check must be deposited
    in a bank account that lists the exact same name that is listed on the

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