BofA, Jio Financial ink JV for 49.9% Jio Credit stake

Bank of America and Jio Financial Services have announced a definitive agreement to form a joint venture, with Bank of America acquiring up to 49.9% stake in Jio Credit, a wholly-owned non-banking financial company. The investment, valued at up to Rs 18,268 crore ($1.9 billion), will include equity shares and warrants, with Bank of America's stake potentially increasing from the initial 26.5% to the higher percentage through warrant exercise.

Jio Financial Services clarified that regulatory and statutory approvals are required for the transaction.

The joint venture aims to combine Jio Financial Services' digital reach and understanding of the Indian market with Bank of America's global financial services expertise, technology capabilities, and experience in risk management and governance. This partnership is expected to provide Jio Credit with additional capital to support loan growth and grant Bank of America access to Jio Financial Services' digital platform and customer base.

The boards of Jio Credit will have equal representation from both Jio Financial Services and Bank of America, and the existing management team will continue overseeing strategy and operations. Jio Credit remains a subsidiary of Jio Financial Services and will be consolidated in its financial reporting.

Mukesh Ambani, chairman of Reliance Industries, stated that the tie-up will help make credit more accessible, transparent, and affordable for Indians by combining Jio Financial Services' digital reach with Bank of America's global pedigree. Bank of America chairman and CEO Brian Moynihan emphasized the company's confidence in India's growth prospects, highlighting that the partnership will leverage Jio Financial Services' scale and local expertise with Bank of America's global reach and digital experience.