PayPal Vs. RBI: New Regulatory Update Requires Purpose Code, PAN & Bank Account
We decided to cover this update on VoiCE because many startup companies & tech freelancers rely (relied) on PayPal for their foreign transactions. Couple of weeks ago, RBI realized that Paypal shouldn't act as a bank in India and let users make transactions over the Internet, without involving any Indian bank and evading taxes. RBI got into action and added restrictions on PayPal usage in India. Taking a step further, PayPal informed all its users via email today regarding the new regulatory update. All PayPal India users are now required to update their accounts with the following information -
Purpose Code: Required for commercial transactions related to exports.
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RBI Vs PayPal
PAN Number: The Permanent Account Number
Bank Account Details: Your correct bank details, if not previously added.
Now, we quickly logged on to our PayPal account and searched for the 'Purpose Code'. Unfortunately, we couldn't locate the 'add' links (tip us through comments so that we can update this post). Right now, our best estimate is that PayPal will update their user interface for Indian users very soon so that we can add related details. Users are also required to update their PAN number and postal address. We obtained following list of purpose codes from RBI. Find your relevant purpose code below -
RBI Purpose Codes
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