However, the company’s Asia-Pacific boss Farhad Irani warned that personal payments remained switched off.

“We are currently making changes to comply with Indian regulations for settlements for exports of goods and services, and we anticipate that as of Wednesday, March 3rd, we will be able to resume the bank withdrawal service,” he said in a PayPal blog post.

“As part of the changes, you will be required to fill out a new field entitled ‘Export Code’ when you request a withdrawal. This information is required under the current laws of India in order to identify the nature of cross-border merchant transactions.”

The RBI told PayPal to get its house in order by getting specific approvals to allow personal inward remittances to India, which Irani admitted the firm doesn’t currently have.

“Until we get these approvals, personal payments into India will remain suspended,” he said.

“We know the past few weeks have been difficult and I would like to assure you that we have been working tirelessly to resolve the situation and restore our service. PayPal’s highest priority is to always ensure we comply with all applicable regulations everywhere we do business around the world.”

Last month the online payment service suspended transactions in India and confirmed that the shutdown was because of questions over whether personal payments were remittances – payments from ex-pat Indian workers. – (Courtesy:theregister.co.uk)

Though temporarily, PayPal has given a mini cardiac arrest to several India-based PayPal users by shunning payment transactions to and from India. Apart from that, these users can’t even transfer their funds to local Indian banks to withdraw their balance. All this was conveyed by a standard mailer that every India-based PayPal user received.

Here’s a standard mail sent to Indian users:

Hello USER,

Your payment of AMOUNT has been sent back to the sender of the payment.

We reversed this payment because we have stopped allowing personal payments to be sent to or from India.

If this was a payment for a purchase of goods or services, and not a personal payment, then you may contact the buyer and have him or her resend the payment as follows: (a) click the Send Money tab, (b) select Goods, and (c) provide a shipping address.

If this payment was a personal payment such as a gift, then we have requested that the sender find another payment method until we restore personal payments to and from India.

We are trying to resolve this issue as quickly as possible and we re sorry for any inconvenience.

Thank you,

PayPal

Nayar’s post indicates that the situation is temporary and the issue is to address the questions about the service that PayPal’s business partners and other stakeholders have.

Over the weekend, we met some bothered India-based PayPal users who were literally clueless on whether their funds would be recoverable ever. Advertising professional Kenroy Rodricks said, ” I’ve about $1,000 stuck in PayPal account which I can’t transfer or perform any transactions with. PayPal is my only gateway where I send and receive payments from clients abroad.” We’re sure that Nayar’s assurance to restore the payments as soon as possible will give a ray of hope to many such India-based PayPal users.

Let’s not forget a fact here that PayPal was acquired by eBay in 2002. Yes, it’s the same eBay that first bought Skype and 65 per cent stake of Skype to an investor group. We may not be surprised if PayPal undergoes the same process. What really freaks anyone out where books like ‘The Secret of Hacking’ Third Edition covers topics – How Hackers Hack Paypal account and credit card Hacking (fully untracable), are sold offbeing sold over the web. (Courtesy : techtree.com)