To comply with the new rules set by Reserve Bank of India an online payment processor PayPal is imposing more restrictions on the service in the country.

In its post to the official blog PayPal corporate communications staffer Dickson Seow says the RBI is enforcing new rules "governing the processing and settlement of export-related receipts facilitated by online payment gateways".

Starting March 1 eBay merchants in India won’t be able to receive payments from abroad of over $500 per transaction. Besides, they will no longer be able to use any balance in their PayPal accounts to buy goods or services. Instead all payments must be transferred into Indian bank accounts first.

PayPal has already being forced to suspend personal payments to and from India after falling foul of RBI licensing rules last February.