@samsexy
As per India Govt RBI law.. any entity which provides on-demand payment has to be regulated as Bank and paypal doesn't want that happen.if paypal keeps Indian user money for more than 7 days they have to pay interest to user as per Law and that's how all banks in India works like HDFC,CITIBANK and others.
next thing is that all entities who brings cash-flow into India have to basically report transaction above $500 to the RBI.PayPal is basically just circumnavigating around this mandate by restricting the payments to $500. Once they do this, they have no obligation to report it to the RBI or the Indian government.
Paypal has been blocked or regulated in countries like Japan,Taiwan,Brazil and USA..but in USA Paypal has accepted and will pertain to IRS standards,if they don't IRS will tell them to F --off
I hope Megashare will provide Paypal alternative to India user such like Alertpay or moneybooker.