Paul Merchants is fundamentally a foreign exchange shop that grew into a financial-services network - it started in the 1980s as a currency dealer in Chandigarh and, over four decades, layered on travel booking, international money transfers, and a non-bank lending arm, all stitched together by a single recurring approach: use the parent’s RBI licence and retail outlets to pull in walk-in customers, then cross-sell everything from air tickets to gold loans through the same counter. The business was reshaped in 2025 when the group sold its entire gold-loan book - until then its biggest balance-sheet engine - to concentrate on the lighter, fee-based lines that had always been its original strength.
Business segments
Three engines built around the same retail counter - a high-volume currency-exchange business, a travel shop that feeds it, and a remittance service for the diaspora - plus a lending subsidiary that has just swapped gold for property and corporate loans.
1. Foreign exchange: the counter that funds everything else
The company buys and sells foreign currency from walk-in customers under an RBI licence, earning a thin spread on every transaction - volume, not margin, is what matters.
- Two products, one trend - telegraphic transfers (electronic remittances for students and businesses) made up roughly 87% of forex sales in FY25, up from about 69% five years earlier, while physical currency notes supplied the rest; customers are steadily moving away from cash.
- The licence is the entry ticket - operating as an RBI-authorised Category-II dealer lets the company trade forex legally; without it, the entire retail counter would have no product to sell.
- Students and tourists drive demand - the biggest customer groups are Indians going abroad for education (especially to Canada and the UK) and leisure travellers, which is why tightening visa rules in those countries from early 2024 directly dented volumes.
- Fintech is eating the spread - app-based platforms such as Wise and BookMyForex offer commission-free currency exchange with online price comparison, forcing a traditional walk-in dealer to compete on service rather than price.
- A new card to stay relevant - in late 2025 the company launched a prepaid multi-currency forex card valid worldwide except Nepal, Bhutan and CIS countries, giving customers a digital alternative to carrying cash.
2. Tours and travel: the trip that brings customers to the forex counter
Air tickets, hotel bookings and visa services are sold on commission - but their real value is that every traveller who walks in for a ticket is a potential forex buyer.
- Commission, not inventory - the division earns fees on air ticketing, hotel packages and visa processing rather than holding any travel inventory itself; in FY25, hotel bookings and packages generated the largest chunk of gross turnover.
- The forex cross-sell - travel and currency are deliberately interdependent: a customer arranging a foreign trip at a company outlet can buy foreign exchange and visa services in the same visit, so the travel desk acts as a customer-acquisition funnel for the higher-volume forex business.
- Insurance is the next add-on - in March 2025 the board approved entry into insurance distribution as a corporate agent, aiming to sell travel insurance to the same customers already buying tickets and currency, with minimal upfront investment.
- Sensitive to the same shocks as forex - demand rises and falls with international travel sentiment, which is vulnerable to economic anxiety, climate concerns and pandemic-era disruptions; visiting-friends-and-relatives travel tends to recover first after a downturn.
3. International money transfers: the diaspora pipeline
The company acts as a sub-agent for Western Union, MoneyGram and RIA, collecting a commission on every inward remittance processed through its outlets - it does not move the money itself.
- A sub-agent, not the principal - Paul Merchants sits at the last mile of the Money Transfer Service Scheme, operating under a principal agent (Ebix Money Express) that holds the RBI authorisation; the company simply processes transactions at its counters and keeps a commission.
- India’s remittance flow is the tailwind - the country received USD 87 billion in remittances in 2021, with the US as the largest source, and the Rupee Drawing Arrangement channel (which the company taps as a sub-agent) handles about three-quarters of all transactions because it is cheaper than alternatives.
- Domestic transfers fill the gaps - the division also runs a domestic money-transfer service where it acts as a distributor for its own NBFC subsidiary, earning a slab-based fee; for a transaction above ₹2,000, the company retains roughly 0.89% of the amount.
- Nepal corridor is a niche - for Indo-Nepal transfers, the company collects a fixed fee from the customer (for example, ₹150 for a cash-to-cash transfer up to ₹5,000) and keeps a portion, with the company acting as an agent of the subsidiary.
4. Paul Merchants Finance: the lending arm that just changed its entire book
The wholly owned NBFC subsidiary used to be a gold-loan machine; it sold that business in mid-2025 for over ₹660 crores and is now pivoting to property loans, corporate lending and vehicle finance.
- Gold loans were almost everything - before the sale, gold-backed lending contributed over 98% of the subsidiary’s income and all of its net worth; the slump sale to L&T Finance transferred the entire undertaking - assets, liabilities, employees and contracts - in one going-concern deal.
- The exit was deliberate - management’s stated reason was to refocus on prepaid payment instruments, insurance distribution and new secured lending products rather than tying up capital in a gold-loan book.
- Now it is building a secured-loan portfolio - from June 2025, the subsidiary began rolling out loans against property, large corporate lending, vehicle loans, direct assignment of loans and co-lending partnerships, all in a phased manner for the domestic market.
- The parent backstops it entirely - Paul Merchants Ltd’s board has approved an enhancement in the limit for issuance of corporate guarantees and/or furnishing of securities to up to ₹1,500 crores in favour of banks/financial institutions for the subsidiary’s borrowings; it also provides working-capital loans at rates linked to government bond yields.
- Regulatory weight has lightened - in June 2026 the RBI reclassified the subsidiary from a middle-layer to a base-layer NBFC because its asset size fell below ₹1,000 crores, which reduces the intensity of regulatory oversight.
Group structure and partners
A listed parent with three wholly owned subsidiaries, bound together by cross-guarantees, referral commissions and shared property - and a promoter family that controls nearly three-quarters of the stock.
- Three subsidiaries, two active - Paul Merchants Finance (NBFC) and Paul Merchants Realtors (real estate) are operational; Paul Infotech was incorporated for IT services but had no commercial activity through FY25.
- Real estate is a capital sink - the realty subsidiary had a paid-up capital of ₹25 crores and turnover of ₹5.62 crores in FY25; the parent has since approved further investments of up to ₹125 crores and a ₹100-crore term loan at 11% interest, all for working capital and corporate purposes.
- The promoters are the Bansal family - Sat Paul Bansal (Chairman), Rajneesh Bansal (Managing Director) and Sarita Rani Bansal together held about 72.7% of the company after a series of inter-se share transfers in 2021 consolidated holdings within the family.
- A legacy regulatory matter is unresolved - the Directorate of Enforcement issued a show-cause notice in early 2024 over alleged FEMA violations involving foreign currency released on behalf of tour operators amounting to roughly ₹283.6 crores; the company and its principal officer have filed compounding applications with the RBI, and the matter was pending as of the last disclosure.