After some  pathetic situation, here is a good news for all the paypal Indian users. Now RBI has allowed Paypal to process all the remittance to India. Going back, a month ago, RBI has blocked Paypal to transfer funds to Indian bank accounts to the paypal users since they have not got approval to process cross border payments. Also “personal payment” option was not available since RBI has asked many questions about it to paypal. But now paypal has announced that issues on withdrawing paypal funds to Indian bank account has been sorted out and still they are working with RBI for the regulations. Being a paypal user I’ve also received an email from paypal today which is given below.

Below is the status of paypal india as per this changes.

1. Paypal will make a formal announcement on the “Bank Withdrawals” on march 3rd until then withdrawal request will not be processed.
2. Due to the RBI regulations everybody who wants to withdraw their paypal funds to Indian bank account or credit card should posses the “Export Code”. Please visit http://dgftcom.nic.in/ to more details about how to obtain the IEC code (Import Export Code). This code should be entered on paypal website to initiate the bank withdrawals from now.(Changes yet to happen)
3. Still the “Personal Payment” option to India will not be available as RBI has some questions about it and paypal is working on it.

Dear Praveen Kumar C,

We have been diligently working with the RBI and our business
partners to resume Indian bank withdrawals for the thousands
of Indian businesses who depend on PayPal to sell their goods
or services in the global marketplace.

Today, we are happy to announce that the RBI has allowed us
to continue local bank withdrawals for settlements for exports
of goods and services.  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, customers will be able to use our
bank withdrawal service.  

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.  

On Monday, March 1st, we will be back in touch with specific
instructions on how you can move your money into your bank account. 

Moving forward, the RBI has told us that PayPal needs specific
approvals to allow personal remittances to India, which we
currently do not have.  Until we get these approvals, personal
payments into India will remain suspended.  However, if you are
an exporter, you will continue to be able to use the PayPal
service for payments of goods and services.  In fact, with the
changes we are making to our system, PayPal is now set to be a
more powerful engine for exporters in India.  With purpose codes
for export transactions and FIRCs (Foreign Inward Remittance
Certificates), you should now be able to get the export
related benefits you seek. 

You can check the PayPal blog for additional updates.

www.thepaypalblog.com

We thank you for your business and for your patience during
the past few weeks.

Sincerely,

PayPal