PayPal Added Auto Withdrawal to Bank Account For Indian Users [Updated]

Seems like PayPal and Indian bloggers have love and hate relationship. Earlier Paypal imposed some new rules for Indian PayPal users. One of them was withdrawing money from PayPal account to bank account within 7 days. Though I never faced any issue with this feature and seems like PayPal has come up with another solution to make it mandatory for Indian users.

PayPal started offering automatic withdrawal for Indian users. Interesting thing is, apart from FAQ page PayPal has not made any official statement or comment regarding this new Auto withdrawal feature.

How to use PayPal auto withdrawal feature?

Login to your PayPal account and hover on Profile link and click on add/edit bank account. (See screenshot)


On the next page select bank account or you can click on Add bank account to add a new one. In my case I selected my existing bank account and clicked on make auto withdrawal.


Though there are many unanswered question like  What will happen if withdrawal amount is less then 7000. (Update: See below for an update on this). As Paypal charges INR 50 for withdrawal amount on 6,999 or less. I believe we will have answers to such question soon. Another drawback is now we can’t hold money in our account to wait for good foreign exchange rate. We will cover more on this But for now I suggest you to check out FAQ page from PayPal.

PayPal FAQ page has added some information regarding the auto withdrawal feature for Indian users.

Here is useful excerpt from the FAQ page:

What is auto withdrawal?

Auto withdrawal is the process of automatically transferring your funds from your PayPal account into your bank account in India.

Where will my funds be auto withdrawn to?

Your PayPal balance will be auto withdrawn to your bank account in India. If you have one bank account added to your PayPal account, it will be set as your auto withdrawal account. In case you have more than one bank account added to your PayPal account, you will have an option to set your auto withdrawal account.

Why are my funds being auto withdrawn?

This is an Indian regulatory requirement and applies to all PayPal users in India.

When does auto withdrawal happen?

Your PayPal balance is auto withdrawn to your local bank account in India daily. You can check your bank account within 5-7 working days after your funds have been auto withdrawn from your PayPal account.

Another news is Indian Paypal users still can’t use their money in PayPal account for any purchase and with this new changes, I believe we don’t expect it be back again for Indian users. So any money receive on your PayPal account, Indian users can only withdraw it directly to bank account.

Though it’s sad to see PayPal dying in India and especially when it’s considered as one of the standard for online payment. Anyways I will keep you updated with latest and update on PayPal and India Love hate relationship. For now you can check out 5 PayPal alternative sites.

Update: So finally we got answer to some of the unanswered questions and first of them is there will be  no withdrawal charges for Indian Paypal users. No matter how much amount it is, it will be withdrawn into your bank account without any charges.

Though for newbie PayPal users, you need to have your PayPal name and bank account exactly the same, else you won’t be able to link your bank account. In case, if you have used misspelled name or nickname, you can contact PayPal and provide them with PhotoID proof and they will update your profile to match your bank account name.

So if you are an Indian PayPal user, you need to update three things in your account instantly: Pan, Bank account and Paypal purpose code.

It’s good to see that PayPal has made things clear now and despite of all the restrictions like we can’t make Payment using existing credit  on PayPal account, I believe as a webmaster we will continue using it, since it’s a standard mode of Payment globally.

What’s your take on new withdrawal policy of Paypal for Indian users?

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Article By
Harsh Agrawal is a blog scientist and a passionate blogger. He is blogging since 2008 & writes about Blogging, SEO, Make money online & tech. His blog, ShoutMeLoud receives 1 million Pageviews/month and have over 700K subscribers.


COMMENTs ( 41 )

  1. Kunal Goyal says

    I think i found a loop hole to it,at the very begging u have to get all the details in so u can receive money,it also needs the money verification,but IF we do not do that PP cannot get a gold of our account if it is ours or not,this will work until u actually verify it. please reply if i am wrong.

  2. Himanshu says

    I am Facing proplem On Paypal By Mistaken i entered my debit card number in place of account of my transaction has completed on that number now what can i do if anyone know please help. :(

  3. ramesh says

    sir i have verified paypal account.on 12th august i received 8$ from ptc site . my paypal balance was autowithdrawn on 13 th august 2014 but yet i am not recieved this fund till 18th august.usually payments received within 3 days,after paypal balnce withdraw but this times i have trouble wat problem. i think 15th friday independce day and 16th saturday so governmnt holiday then 17th sunday. this is the problem to recived payments? pls

  4. Prasad Pol says

    My Paypal story. One month ago i brought a new debit card of union bank of india they given me the RuPay debit card, I brought it just to order some gigs and to purchase some stuff from internet through paypal. I thought everything will go easily.
    First thing i signed up to paypal that was an easy process. second thing i given all the information of mine to paypal like adhar card, pan card and even that was an easy process third thing i try’d to link my account to paypal so i had given all my bank account no and all the other information after that they said you will get two small deposits in you bank just in 3 working days and that deposits will be your verification amount. so as they said i got two deposits in my account of 1 rs ,1 rs so i inserted that amount in paypal verification but it said wrong deposit amount insert again so i inserted the same amount for 3 to 4 times then all the things disappeared. paypal said me to again put your account number and card number so i try’d to do that again but i got the message this account number having some issue please contact our costumer services. but before doing that again i went to my bank website and again i checked both of that deposit amounts but now it was something different now that amount was updated and it was showing me 1.47 rs and 1.03 rs, so i decided to talk with paypal costumer service i told them about my verification problem they said me to give my paypal email address i given them then after a hour they replied me they have reseted my account and they told me to again put the same account number and card number to get linked to your bank account so i did what they said then i got the again i got the message that you will get two small deposits in 2 to 3 working days then after few days i got that deposit and then i verified my account successfully. now i was soo happy i try’d to purchase a product form internet through paypal. so i entered the website address from where i wanted to purchase the product there they asked me to purchase this product put your paypal email and password so i did then i got error your card don’t wont allow you to do this transaction contact you card supplier. so i went to my bank and they said we dont know anything about paypal ask our internet banking department they given me the phone number. so i made a call and I asked them about paypal they told we don’t support paypal and i was really very disappointed so i went to another indian bank i asked them about paypal they said we dont have any idea about paypal. and then i searched on google about it and i landed on result that paypal dont support indian bank debit cards only we can use credit card to purchase anything through paypal. but as i am a student bank will not give me any credit card so i googled it and got some news that paypal only supports icici debit card to do transactions. so now i am going to open my account in icici if anyone is having some paypal issues with icici debit card then please let me know

  5. Raaj Paatkar says

    Yes, it is very unreasonable for RBI to impose such restrictions – it really puts a lot of inconvenience for online marketers. They also killed other ways of receiving payment like the Payoneer card. I recommend you use 2CO or Payza if you are an online marketer.

  6. Ashish Mishra says

    I havent got this info anywhere till now. My question is I am in India and can i use Pay Pal to send money to someone abroad through my linked Bank account? coz i dont have Credit card and Debit card is not getting linked to my Pay Pal account. Any clarifications please?

  7. Sandip Roy Chowdhury says

    Hi Friends
    I have bank account in state bank of india and which is verified in paypal. I mentioned all of things like pan number purpose code verified email ID etc. I have balance in my paypal account but I can’t withdrawal it there is says your access is limited. Its need to debit or credit card? two months gone I don’t got any payment in my bank account so please can any one help me? please friends if you know this type of problem kindly share me.

  8. situnrocks says

    Same here , regd a paypal account 4days back and pan card yet not verified. Can I receive money since bank ac verified.

  9. Siddharth says

    Its better if we have it in our control than auto w/d. Other than this, recently i opened a new PP a/c for my brother, it instantly got limited saying that PAN card is under verification.. they are still verifying past 2 weeks :P

  10. Mukund says

    Well, it’s pretty tricky now for Indian Users. Intially, they had a scheme wherein anything below Rs.7000 had a processing fee of Rs50 and anything above it, for free. Now, it is mentioned no withdrawal fee but actually it is pretty tricky. Look at what they say below.

    “If foreign exchange or currency conversion is required to complete any transaction, this will be performed by a licensed financial institution. The foreign exchange rate is adjusted periodically on a daily basis to reflect market conditions and includes a 2.5% processing fee which is retained by PayPal. The exact exchange rate that applies to your transaction will be displayed to you at the time of the transaction.”

    It is very obvious that we can’t do anything with a PayPal account only linked to Bank Account (Not Credit Card Holders), but to just transfer the amount to our Banks. So, apart from the money they make in currency conversions (they usually take the avg and not the current value), they’ll charge 2.9% processing fee as well.

    I leave it to the users to think which option is better. The initial one or the new and if I’m wrong, please do correct me:)

  11. Thiru says

    Auto withdrawal is a nice one, but if i do it daily, How can i afford Rs.50 for each transaction… paypal finally ****s.

  12. Jasmine says

    Looks like this is a good feature for Indian users. I wonder if this feature is offered to the rest of the world?

  13. Akshay Jain says

    Hello Harsh,

    I m not able to understand that what is the fee procedure and Can you give me the Link to know how to use paypal as I m newbee to paypal.

  14. Roy C.Chukwu says

    Nice one from paypal, I wonder why they never allow my country to use paypal not to talk of withdrawing to the bank.

  15. Bhaveek says

    So this means that we cannot buy anything using paypal. This will make paypal useless for Indians, may be we should start looking for an alternative to paypal.

  16. rakesh says

    This is started by the new RBI guidelines, But i would love to withdraw my money whenever need that.

  17. Sidhant says

    Its nothing new.
    I have been using this feature for over 5 months now!
    They charge 50 INR for withdrawal of less than 7000 INR.

  18. [email protected] says

    actually i have a question regarding this system, like when we create paypal account and link it with our bank account than what is the next step to do? As they have sent a mail to check your bank account which is depositted with rs. 1 please help me what to do next

  19. Ujjwal @ says

    I don’t think paypal is dying in India. Me and many of my blogger friends still use paypal.

    • says

      Ujjwal even I’m using PayPal and I can’t leave it because at this moment this is standard. Though if in future Google, Facebook or any third company launches any thing reliable, any good alternative, I will switch to that. Since PayPal is causing lots of issues and especially limitations for Indian PayPal users.

  20. vamsi says

    well, that’s a good news for me. some of my advertisers only pay me using paypal, so I can’t leave my account.

  21. Mani Viswanathan @ DailyBlogging says

    That’s a really nice move from PP. But what if I don’t want to Auto Withdraw. They should’ve set a limit for us to choose.

    • says

      Mani the thing is money in your PayPal account is useless as you can’t use it to buy something or send it to anyone. So this Auto withdrawal doesn’t make any difference infact this will make work automated. Though the problem is processing fees for lower amount withdrawal ….

      • rakesh says

        if i want buy some thing or send some amount to someone so in that case what can i do for it do you have any solution for it

  22. Vincent Raja says

    If if get money daily.. they will charge 50 Rs daily? What paypal thinks about us… I will enable auto withdrawal when this rs.50 fees cancelled.. :)

  23. Amit says

    Also ,This is also very bad ,I have to give everytime 50INR ..if it withdraws daily ,What the hell is that? As we are top IT services country but we don’t have even our fully functional system like paypal and if other guys are providing services ,our politicians suing them ,We don’t have guts to make system like paypal? How big IT services country are we ..I doubt it ??

    • says

      Amit it’s not certain if they going to charge for automatic withdrawal or not..Or if the amount with be auto withdrawn once your account reaches 7000 INR threshold. Lets wait for an official announcement…

  24. Amol Wagh says

    I don’t think its dying that much , We can still accept most kind of payments.

    And for buying stuff & sending money – Credit card will do great job for us. So it’s eventually, it turns out if you have credit card or not.

    Isn’t it ?