Mumbai, April 10 The Reserve Bank proposed changes in the criteria for identifying upper layer non-banking financial companies (NBFCs) on Friday, advocating for an asset-based approach instead of the previous parametric system and including state-run entities.
According to the draft 'Reserve Bank of India (Non-Banking Financial Companies' Registration, Exemptions and Framework for Scale Based Regulation) Second Amendment Directions, 2026', upper layer NBFCs will be those with assets exceeding Rs 1 lakh crore.
"To adopt a transparent, simple, and absolute criteria for identifying NBFC-UL, it is proposed to replace the existing methodology with asset size criteria, which is currently proposed as Rs 1,00,000 crore and above," the draft, posted on the RBI website, stated.
This draft comes at a time when the listing of Tata Sons, the holding company of the salt-to-software conglomerate, is under intense discussion, and all eyes are focused on whether the entity, a core investment company, will receive a reprieve.
According to the RBI mandate, the top 15 entities in the upper layer must list, and only Tata Sons had not gone for listing even after the October 2025 deadline, despite being on the list.
The draft norms also propose including government-run entities in the list of upper layer NBFCs.
"The scale-based regulation framework currently places government-owned NBFCs in the base or middle layer, not in the UL. In line with the principle of a neutral regulatory regime for NBFCs, it is now proposed to consider eligible government-owned NBFCs for inclusion in the list of NBFC-UL based on the revised criteria," it said.
Tata Sons had an asset base of Rs 1.75 lakh crore as of March 2025. A number of state-run enterprises, which were large enough in size, were excluded from the UL list.
The draft also proposes allowing all NBFC-UL to use state government guarantees as a credit risk transfer instrument without any limit, subject to specified conditions.
Governor Sanjay Malhotra had announced on Wednesday that the Reserve Bank would be coming up with a revised framework on NBFCs, when asked about the update on Tata Sons' compliance with the earlier directions.