Gold, silver savings are unproductive: Mukesh Ambani's Jio BlackRock pitch to Indian savers

Reliance Industries Chairman and MD Mukesh Ambani on Wednesday suggested that Jio BlackRock will focus on nudging Indian savers to move some money from gold and silver to capital markets through "safe, transparent and consistent" investing. He made the remarks when asked whether his ambition with Jio Finance was to disrupt financial markets the way Reliance disrupted the telecom sector.

Ambani said Indians have historically saved consistently, but not all of that saving has translated into productive economic outcomes. "Indians have really been savers. If you look at our history, we have saved consistently over the last five-six decades. What has happened is that some of this saving has not been productive," Ambani said while speaking in a fireside conversation with BlackRock CEO Larry Fink.

The billionaire businessman pointed to India's recent bullion imports as an example of savings that do not contribute to growth. "If you see just the last year, India imported $60 billion worth of gold, and we imported 10-15 billion worth of silver - and all of this not for industrial use but really for domestic savings. This is unproductive," he said.

Ambani said the focus for Jio BlackRock is to convince Indian savers about long-term wealth creation through participation in capital markets, and to build confidence around compounding returns. "If we can actually convince the Indian saver that if one invests in the capital markets in a safe, transparent, and consistent way, there are returns and these returns compound," he said.

Ambani said that, in his view, the opportunity is not just about expanding investing access, but about making savings generate earnings and supporting the broader economy. "For us at Jio BlackRock, the opportunity is to encourage Indians to save but to make sure that we give them the options to convert those savings into earnings and hopefully compound their earnings so that they not only work for themselves but they also work for the Indian economy and that propels the Indian economy to grow in terms of what we want to do and then we all grow together," he said.

"So yes, if you call that disruption, we will use technology distribution to achieve that for every Indian, for every Indian household, for every Indian small business and large businesses. That's our objective," the billionaire added. 

Reliance's Jio Financial Services and BlackRock have formed a 50:50 joint venture called Jio BlackRock to provide financial services in India, including mutual funds.

Earlier in the conversation, Ambani also linked Reliance's approach to what he described as BlackRock's philosophy. "Our ambition and aspiration start with what I admire about Larry (Fink). Larry is not only the result-oriented CEO of a top global multinational. He has a very compassionate and passionate heart," he said.

"When he (Fink) told me that at the end of the day, the purpose of BlackRock is not to make short-term results or make returns for my investors and shareholders if I cannot put this money to work first for the betterment of society - and as a byproduct, I give my investors and shareholders returns, then I would have done my job. And that is the Reliance philosophy too. We've always believed that our minds match."

Responding to the broader point on "disruption", BlackRock CEO Larry Fink argued that transformation in financial services comes from long-term focus on customers rather than chasing growth targets. "We never focused on targets of growth ever. Our focus has been relentlessly on the client," Fink said.

He added that disruption, in his view, is the outcome of consistency and trust built over time. "That's how disruption occurs. Disruption does not occur because you set a target. The target is making sure you're living with purpose every day with each and every client," Fink said.