The recent change in policy by paypal is a big issue for indians who are making money online and are dependent on paypal for receiving payments from countries other than India. This issue is because of differences between paypal and RBI policies. Paypal is not a bank and it doesn’t want to run like a bank. Paypal is just a payment gateway through which online business owners accept payments from overseas. Now, paypal has been operating India from a long time without adhering to the policies of Reserve bank of India (RBI) and even RBI didn’t care about it. According to RBI rules, any financial institution has to operate as a bank if it keeps clients’ money for more than seven days and it also has to pay interest like a bank. Secondly, all the monetary transactions above five hundred dollars have to be reported to RBI. Paypal doesn’t want to follow these rules and wants to work independently. Paypal has long been avoiding RBI policies. After RBI forced its grip on paypal, paypal changed user agreement with Indian online professionals and gave a month time to implement the agreement which is very shocking.
Online businessmen have already started looking for alternatives. But, all problems can be solved very easily if either paypal or RBI bring changes to its policies. I think RBI is correct with what its doing. Paypal must change its policy if they still want to remain in business with Indian professionals. Ultimately, paypal and Indian professionals are at loss here.
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