I just received a notification from Paypal yesterday that they are now allowing withdrawals to Indian Banks via Direct Bank Transfer and not the Paper cheques which they were earlier allowing.

There are many many Indians who have been using Paypal to receive money from abroad for quite sometime now. However, all of them faced the problem of withdrawal of funds. Then many people resorted to using Xoom.com and other similar services.

Recently a few weeks back Paypal started allowing of withdrawal of funds to Debit and Credit Cards in 26 countries, one of which was India. However, AFAIK no Debit cards in India (except I guess Citibank’s that too with limitations) can be used to transacting online. Hence, everyone in India had to use their Credit Cards. Still it was better than Paper cheques.

However, this recent announcement is like a Diwali Gift from Paypal to it’s Indian users.

Well here is the Details of the lastest feature from Paypal:

• Withdrawals over and above Rs. 7,000 is Free of Cost while anything below that amount will be charged a fee of Rs. 50 (which I think is pretty fair). However, I feel the Free Limit should have been above Rs. 5,000 but, that’s just my feeling.
• The transfer should take between 5 - 7 working days (business days).
• Banks supported are: State Bank of India, Bank of India, Canara Bank, Union Bank of India, HDFC Bank, ICICI Bank, ING Vysya Bank, Axis Bank (formerly UTI Bank), Standard Chartered Bank, HSBC Bank and CitiBank (which Paypal will be using to transfer the funds).

What you need to Withdraw the funds to your Indian Bank Account:

• Paypal Account (LOL, was supposed to be a joke)
• Bank Account with any of the above mentioned Banks
• Indian Financial System Code (IFSC) - please don’t confuse it for MICR code or SWIFT code. Now, where to find it well, if you have a new cheque book it should most probably be printed on the face of your cheque leaf. If you don’t you have to contact your local branch for the number. For you convenience here is the link to all IFSC Codes
• Your Bank Account Number (the full number most probably a 12 digit one)

I myself have not tried the withdrawal for mainly because I have no funds in my Paypal account. Well, since withdrawal to India was a tedious earlier I wasn’t using my Paypal Account much. I guess I’ll use it more now.

P.S.: It is being said that IDBI Bank will be added to the list soon.