Tuesday, March 02, 2010

Business as Usual or Business Unusual !

Paypal was suspended by the Reserve Bank of India (RBI) last week from performing bank withdrawals for exports of goods and services. This affected businesses as well as personal remittances that expatriates from abroad used to send into the country. The problem was basically that of getting Paypal to toe the line of the country's regulations which needs the governing bodies to keep a tab on the nature of merchant transactions happening and also the nature of remittances. 

As business start expanding globally, there comes the headache of tweaking your operations to comply with local rules and regulations. While this is no doubt a hurdle to overcome, it becomes difficult at times for businesses originating in democracies to digest the draconian laws that govern closely guarded economies. Take the instance of China. Google has entered the market but has found the gagging of search results by the government stifling. So much so that it has had to be content with a 2nd position in the Chinese market. Its own "Do no evil" proclamation has come back to bite it as it grapples between the big business opportunity in China and steadfast adherence to its principal.

The problem is highlighted since neither party involved can claim moral high ground. One wants to preserve their hold over power or to see it the positive way its way of life; the other wants to expand its business to the worl's most populous state or to see it the positive way connect 1/6th of the planet's population to the rest of the world.

Paypal's case was more straightforward....right? Enterprises and their compliance to geo specific laws are a fine balancing act that companies are forced to do as they expand the businesses at a pace unseen of in the  last decade

1 comment:

Adithya said...

Nice Article

I see PayPal's Case was rather late. RBI should have woken up much earliar.

Even in China what happened to Google was rather dissapointing.

It is really strange to see such occurences even after companies having strict norms to adhere to Geopolitical issues.

From my point of view the goernaments of each countires should allow/disallow companies entering into the country with clearly drafted regulations to adhere to.

As you rightly point out All govenaments have but lack the means for implementing / Monitoring these regulations.

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