When I opened my email today, I was shocked to see that PayPal has once again blocked bank withdrawal option for Indian PayPal users. This is the second time that PayPal have blocked withdrawal to local bank accounts in India. Indian PayPal users faced similar situation in February this year when PayPal stopped personal payments which resulted in payment reversals. The only way left to withdraw money from our PayPal accounts is via cheque which takes more than two weeks to arrive and even more time to cash out. The only good thing in this email is that PayPal will refund the $5 USD cheque withdrawal fee for withdrawals made on July 29, 2010 onwards, but that don’t seem enough to cheer up Indian PayPal users. Below is the email I received from PayPal.

Dear xxxxx,

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.

  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.
Thank you,

The PayPal Asia Team

I do not know what is going on among Indian Authorities and PayPal but Indian freelancer community, many of whom fully dependent on their online income are suffering and this do not seems to end here.

Update : PayPal Bank withdrawl option is available again, which is a great relief.

Paypal Strikes again, says No more Bank Withdrawals

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