According to the reports PayPal has also reversed certain payments received by Indian accounts and sent it back to the account which had made the payment.. I have found a copy of a letter from PayPal to one of the Indian accounts..
Letter Source: http://techie-buzz.com/annoyances/paypal-stops-personal-payments-for-india.htm
Your payment of XXX has been sent back to the sender of the payment.
We reversed this payment because we have stopped allowing personal payments to be sent to or from India.
If this was a payment for a purchase of goods or services, and not a personal payment, then you may contact the buyer and have him or her resend the payment as follows: (a) click the Send Money tab, (b) select "Goods," and (c) provide a shipping address.
If this payment was a personal payment such as a gift, then we have requested that the sender find another payment method until we restore personalpayments to and from India.
We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience.
PayPal first began stopping personal payments, but now even business payments have been stopped.. This has worried many PayPal users in India who work for overseas companies and receive payments through PayPal.. Most of these users are getting their frustration on online forums and messages boards.
However, no matter what the problems were, PayPal definitely did not handle it amicably. Users who withdrew money from their accounts are now facing negative balance.. We will soon update you on any further issues..