Paypal Stopped Electronic Fund Withdrawal in India

5 Months back Paypal stopped personal payment to India and reversed money sent underpaypal_thumb Personal payment. The whole fiasco happened because of issue between Paypal and RBI and later on Paypal come with a solution of Purpose code to withdraw money but personal payments are still not allowed in India.

Here is another big news for Indian Paypal users, Paypal is going to stop electronic fund withdrawal from July 29th onwards.

In an official Email notification they added:

Official Email

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:

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

In order to help you with this change and until further notice, we will refund the $5 USD cheque withdrawal fee to you for cheque withdrawals made on July 29, 2010 onwards.

For any questions, please log into your PayPal account and click ‘Contact Us’ at the bottom of the page.

We apologise for any inconvenience caused from this change in our withdrawal functionality. We will provide ongoing updates to you here. We thank you for your attention and patience as we work tirelessly to resolve this situation as quickly as possible.

You can find more info on official paypal blog.

This issue has created another buzz among Indian bloggers and Freelancers.  At this point it is unclear that when this issue will be resolved.

The only option to withdraw money from Paypal will be Cheque withdrawal. Paypal charge for Cheque withdrawal is 5$ but in this case they will do a refund of 5$ for every cheque you will be requesting.

How to withdraw money via Cheque in Paypal?

Paypal already added an official page to help Indian users on how they can withdraw money via Cheque.




One thing which I’m not sure that Cheque sent via Paypal will be sent via Courier or by ordinary postal service. More over if you are getting Cheque in U.S $, it will again take 15-21 days to clear your cheque and added service tax will be charged by your bank.

For now I have quickly withdraw money using Electronic transfer. Lets hope that this issue will be resolved ASAP.

What are your suggestions for now in this whole paypal issue?

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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 ( 34 )

  1. Saleesh says

    Good News . Paypal restored the withdrawal facility. Now you can continue withdrawal of money directly to your bank account and pay pal decided to provide the $5 USD processing fee refund for any cheque withdrawals made from July 29, 2010 until further notice.

  2. Sonia says

    A new fact about Pay Pal : I applied for a charity account with Pay pal because its free and supported by vbulletin software for payment subscription, I have all the documents like NGO Registration certificate, Memorandum of Society, Society PAN card, and the Bank details , bank details were verified by the Pay Pal by depositing amount of Rs. 2 and 40 paisa, after submitting all the document as per said in their website and in their emails, they denied me for the account, just because they have no tie-up with India regarding charity account, what the hell is this, why the pay pal people should not mention at the time sign up process. I have wasted around 1000/- rs in doing fax to pay pal and after 4-5 days they denied.
    Don’t apply for a charity account with pay pal if you are living in India. Just wastage of time and money.

  3. Avinash says

    Things like this will keep happening until and unless Paypal sits with the regulatory authorities and clears their objections in a way reasonable to them.

  4. Tinh says

    That is too bad. I remembered that there have been many issues recently with PP in India and hope this time will not worse

  5. sriganesh says

    the email made my day very bad.
    i never tried to transfer to bank. oh *#%^! , now i tried to transfer the same day to buy a D-slr camera..
    i have to wait. i cant go with Cheque,

    Blackberry and paypal are not so cooperation with indian government

  6. Mani Viswanathan says

    Harsh one doubt here, because I used to use adbrite earlier about 1 yr my payment by cheque but they cut huge amount of service taxes for some conversion of dollar to INR. Will this be the result if we draw cheque from paypal too or is the bank at the fault ?

  7. Hesham says

    I am sorry to hear that! it’s not good at all for the business! India has a wide range or active internet users!!!

  8. Tushar says

    i am very annoyed….it was so easy to get money directly in banks….i do not know what indian govt is upto….

  9. chandan says

    I have just transferred money from paypal after listening about this information. Will my money be transferred to my bank account?

  10. Ron says

    Sad news. Is there any alternative to paypal? What about alert pay or payoneer?

    btw, nice quote styles @Harsh

  11. Anil Gupta says

    All this really frustrate me. It will become really hard and long to get your hard earned money getting into your bank account as it will take lots of time and effort from our end. Going to withdraw all cash lying in Paypal, may be I Don’t need to use Check option and problem get resolved.

  12. Typhoon says

    Very irritating…The cheque takes around 15-45 days to deliver. Very annoing step..

    I hope they restore it asap…Ahh Indian Government officials really need to take break…

  13. Dean Saliba says

    It is sad but this is what happens when you live in a country where there are many people trying to cheat and abuse the systems that we use to make money.

    I suspect Nigeria will be next in line.

  14. Rockzzz says

    Present situation I don’t know but some 3-5 years ago, I have withdrawn fund through paypal Cheque. It came through ordinary post within 20-25 days. however the cheque was drawn on Citibank, payable at par so get cleared in 5 working days.
    I guess they will issue a payable at par cheque of any leading International bank which will require only a local clearing for mega cities.
    The only concern is 15-21 days courier time

    • Mahendra says

      Very surprised to see comment made by Rockzzz!
      Till date, I am knowing that people copy others content. For the first time, I have seen a 100% copy pasted comment here….. I have no objection but would love if atleast some words have been changed for a CHANGE

  15. Samir says

    I was simply shocked at this decision. The records in your Bank Account Statement would clearly state the origin and nature of the transaction! So why wouldn’t RBI be able to keep a record of PayPal fund transfers? They could simply instruct the respective banks to maintain a separate record of all PayPal transfers!

    • says

      @Social it’s coz of issue between RBI and Paypal. As they dont have any record of money coming via Paypal. RBI is trying to come up with a regulation to keep a track of money coming via paypal.

    • says

      Ajeet I believe this time again it’s going to take some time. Like a month or two.. Situation will be worse if it is extended for too long.. Lets hope it will get resolved soon.

  16. Mahendra says

    Present situation I don’t know but some 3-5 years ago, I have withdrawn fund through paypal Cheque. It came through ordinary post within 20-25 days. however the cheque was drawn on Citibank, payable at par so get cleared in 5 working days.
    I guess they will issue a payable at par cheque of any leading International bank which will require only a local clearing for mega cities.
    The only concern is 15-21 days courier time

      • Sammy | Best Home Business says

        Payable at par cheque should be cleared same day if deposited in the same city. So the only concern should be the postal delay.

        Good that paypal is waiving the charges for the cheque, because I think that will be compensated by the bank charges.

        Its funny that RBI is not able to track electronic transfers. They want to know that these funds are originated abroad. I wonder how they will track payable at par cheques. That too will be construed as local funds.