The Reserve Bank of India has issued a notification, advising foreign airlines to stop using overseas banks for settlement of online sale of air tickets in India. According to the RBI, debit and credit card companies were allowing foreign airlines to choose whether to select the country and currency of their choice for transactions from online ticketing. "In such transactions, the overseas bank as the acquiring bank receives the funds from Card Issuing Company in its Vostro account maintained with an Authorised Dealer bank in India or in its foreign currency account maintained abroad and makes the payment in foreign currency overseas to the foreign airline." The RBI has said that this practice is not in conformity with the Foreign Exchange Management Act, and airlines are permitted to repatriate the surplus arising from sale of air tickets through their agents in India, only after payment of the local expenses and applicable taxes in India. Last year, the RBI imposed restrictions on online wallet PayPay in India: before limits were imposed on PayPal's activities in India, PayPal allowed its users to use remaining balance for purchase of goods or services online, thus operating as a virtual wallet, and not routing the purchases through the Indian banking system. Following the clampdown, Indian users are not allowed to receive payments for over $500 via Paypal, all money received into a PayPal account must be transferred to a customer's India bank account within 7 days from the receipt of confirmation from the buyer, and…
