PayPal has been forced to suspend personal payments to and from India for "at least a few months" after falling foul of new government licensing rules.
The online payments operator initially blocked all local bank transfers and personal payments to and from India earlier this week, in an unexpected move that caught local users by surprise.
PayPal initially failed to provide a reason for the break-down, further fuelling the anger of users.
In a blog posting late yesterday, Anuj Nayar, director of global communications PayPal explained that the company temporarily suspended operations "to respond to enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India".
He says customers should be able to withdraw their funds to a local bank within the next few days, and that reversals from accounts that occurred during the shut down will be repaid.
However, the block on personal payments will likely continue "for at least a few months until we fully resolve the questions from the Indian regulators", says Nayar.