PayPal’s official blog staes the RBI is enforcing new rules "governing the processing and settlement of export-related receipts facilitated by online payment gateways".
From 1st March eBay merchants in India won’t be able to receive payments from abroad in excess of $500 per transaction. They will no longer be able to use any balance in their PayPal accounts to buy goods or services. Instead all payments must be first transferred into an Indian bank account.
PayPal has already being forced to suspend personal payments to and from India after falling foul of RBI licensing rules last year.
