That's a Fake 'Press Release' on Reliance Jio Acquiring Federal Bank!

We found several red flags in the viral 'press release' which suggested that it's not an official one.

The 'press release' in circulation made the false claim that Reliance Jio is going to acquire Federal Bank.

(Photo: Altered by The Quint)

An image of a 'press release', allegedly issued by Mukesh Ambani’s Reliance Jio, is being shared on social media with the claim that the company is set to acquire Federal Bank.

However, we found that no such development has happened and several red flags in the viral 'press release' suggested that it's not an official one.

CLAIM

The 'press release' is headlined, 'Reliance Jio to acquire Federal Bank at USD 10 billion valuation.' It further noted that the company will enter the banking industry with this acquisition.

You can view the archived version here.

(Source: Twitter/ Screenshot)

The 'press release' is being shared on Twitter, Facebook and WhatsApp with a similar claim.

The 'press release' is being shared on WhatsApp.

(Source: WhatsApp/ Screenshot)

WHAT WE FOUND OUT

We found several red flags in the viral 'press release' that suggested that it's not an official one. Let's take a look at them one by one.

1. INCORRECT MARKET VALUATION OF FEDERAL BANK MENTIONED

The 'press release' noted that, "RJIL has paid total consideration of Rs 73,616 crores (inclusive of taxes) to Federal Bank and has assumed ownership."

However, the market valuation of Federal Bank, as on 20 September, was Rs 17,355.33 crores. The 'press release' incorrectly mentioned the figures as Rs 73,616 crores.

The market value of Federal Bank, as on, 20 September, was Rs 17,355 crores.

(Source: Economic Times/Screenshot)

2. CAN CORPORATES ACQUIRE BANKS?

In October 2020, the Reserve Bank of India (RBI) had released the Internal Working Group's report which had made a recommendation that large corporates may be permitted to promote banks.

"Large corporate/industrial houses may be permitted to promote banks only after necessary amendments to the Banking Regulations Act, 1949 to deal with connected lending and exposures between the banks and other financial and non-financial group entities," the report stated.

However, this was only a recommendation and hasn't been finalised yet. Broadly, corporates cannot acquire a bank.

AND THE TEXT OF THE PRESS RELEASE?

On searching for the press release on Reliance Jio's official website, we found that the text under 'About Reliance' section was lifted from earlier press releases. (You can view a press release released on 15 September here and one issued on 14 May here.)

Left: Viral 'press release'. Right: Official press release.

(Photo: Altered by The Quint)

We also came across a report by The Economic Times published in 2016 that mentioned that Federal Bank and Reliance Jio had entered into an agreement for one-click payment service.

However, we couldn't find any report which mentioned the development that the telecom company was acquiring the Federal Bank.

On Thursday, 16 September, CNBC TV18 reported that Reliance Jio had filed a complaint about the viral 'press note' with the Mumbai police saying that it is "absolutely fake".

Evidently, the 'press release' in circulation made the false claim that Reliance Jio is going to acquire Federal Bank.

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