PayPal seems to be having a tough time in the World's second largest (No.1 is Ireland) software outsourcing destination. In accordance with regulatory instructions from the Reserve Bank of India (RBI), starting from July 29, 2010 onwards, Electronic withdrawal of funds from Payal accounts will be stopped. The only way left is to request for a cheque withdrawal of funds from the PayPal account. In order to help its India users deal with this change and until further notice, PayPal will refund the US$5 cheque withdrawal fee to the users for cheque withdrawals made on July 29, 2010 onwards.
There is significant uproar over this issue as checks are cumbersome to manage and typically take close to a month to get cleared at Indian Banks. This incident is the second time this year that Paypal has had hiccups with its Indian operations. Earlier this year, PayPal stopped allowing Personal Payments to be sent to and from India citing differences with the RBI.