The news comes as a death blow to most internet entreprenuers / part time – work from home individuals. Paypal, announced recently, that there was a change in the mode of withdrawal of funds from PayPal account for India users. Users will not be able to withdraw funds to their account using the Electronic facitlity any more from 29th of July, 2010.

They have to request cheques for any future withdrawals, which comes uncalled and is not welcome by most PayPal India users ! Paypal announced that they’d not charge the $5 paypal fee which they otherwise used to charge on requesting a cheque. We do understand that this is because of the legal hassles Paypal got into a few months ago in India. The best we can hope for is that Paypal will sort out the issues and streamline a smooth process of withdrawal via Electronic medium at the earliest.

Here’s the mail from Paypal, which also tells you how can request a cheque :

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.
Thank you,

The PayPal Asia Team


  1. 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.

  2. @Ben – My take is, the government was not able to keep track of money flow. ‘Where the money came from’ was the major issue. And what purpose was it being used for.

    Now with the deposits coming in, if there is some unusual behavior suspected, then the bank can alert the RBI or other responsible authorities. Think about in terms of internal security. What if one / more of the external forces, who want to break the back bone of India – her integrity, are funding the armed rebellion ?? Possibility right ?

    I guess this will be the case till there is a proper program set in place. It might take some time before we have a well defined system in place, but if we look at it in the broader perspective, I think this step is apt.

    Development is very necessary, but at the cost of a nations integrity, we should never compromise on it right ?

  3. @Lixon – I’ve really not used them. If you have, please pen down your thoughts about the advantages and the disadvantages.

  4. This is a major Setback to Indian Enterprenuers. Indian Government and RBI should act fact to set right things as quick as possible with PayPal.


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