The US-based Travelex and Swiss travel major Kuoni are joining hands in India to offer travellers cheque business and wholesale retailing of foreign exchange.
Travelex had bought the travelers cheque business of Thomas Cook a couple of years ago, while Kuoni had acquired Indian companies such as SOTC and Sita World Travel.
The two companies are setting up a holding company which will make downstream investments.
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In the holding company, christened Travel Mate, Travelex will hold a 51 per cent stake, while Kuoni will hold the balance 49 per cent. The details of the investments could not be ascertained.
The company, to begin with, intends to distribute travellers cheques in India. However, it is likely to foray into wholesale retailing of foreign exchange at a later date. The first year target is to the tune of Rs 1,000 crore.
Internationally, Kuoni sells American Express Travellers Cheques. In India, however, the new joint venture will also sell Travelex Travellers Cheques.
While the company sources say that a memorandum of understanding has already been signed to this effect, the government officials confirm that the company has already sought regulatory clearances.
Industry sources said that the minimum capital base requirement for a company to become an authorised dealer for money exchange is Rs 100 crore.
The Reserve Bank of India is contemplating to hike the limit to Rs 200 crore. Industry sources added that around a dozen executives from a rival travel company is expected to join Travel Mate shortly.
In November 2000, Travelex had taken over the travellers cheques business of Thomas Cook by acquiring Thomas Cook Global and Financial services. The Indian business, however, was not a part of the deal.