An Importer Exporter Code (IEC) is allotted to exporters in India after they provide detailed information on their businesses, including their income tax identification number.

The Indian government is worried that intermediaries like PayPal are being used by freelancers who do not pay income taxes for income earned abroad, and also by financiers of terrorists in India, according to analysts. By insisting on an IEC code for withdrawals by exporters, the RBI is ensuring that it gets the required information on the transaction, they added.

PayPal said it hopes to resume the bank withdrawal service by March 3. It added that it will post on its blog on March 1 with specific instructions for customers on how they can move their money into their bank accounts.