RBI’s new NBFC draft: PSUs with Rs 1 lakh crore assets set for 'upper layer' status; Tata Sons listing in focus - Markets | Latest News Updates

The Reserve Bank of India (RBI) proposed a significant overhaul of the criteria implemented to identify upper layer non-banking finance companies (NBFCs), shifting towards a straightforward asset-size-based approach instead of the previous parametric system and inclusion of 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′, the upper layer NBFCs shall consists of NBFC having asset size of Rs 1 lakh crore and above.

“With a view to adopt a transparent, simple and absolute criteria for identification of 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 read available on the official website of RBI.

The regulatory shift comes amid intense speculation regarding the listing of Tata Sons, the holding company of the diverse salt-to-software conglomerate and all eyes are focused on whether the entity, a core investment company, gets a reprieve.

While the RBI mandates that the top-15 entities in the upper layer must list on stock exchanges, only Tata Sons had not gone for listing even after the October 2025 deadline despite featuring in the list.

The draft norms also pitched for inclusion of the government-run entities in the list of upper layer NBFCs.

“The scale-based regulation framework currently places government-owned NBFCs in the base layer or middle layer and not in the UL. In pursuance of the principle of ownership neutral regulatory regime for NBFCs, it is now proposed to consider eligible government-owned NBFCs also for inclusion in the list of NBFC-UL based on the revised criteria,” the central bank’s draft said.

Tata Sons had an asset base of Rs 1.75 lakh crore as of March 2025.

A slew of state-run enterprises, which are large enough in size were excluded in the UL list.

The proposal also includes a provision allowing all upper-layer NBFCs to use state government guarantees as credit risk transfer instruments without any cap, provided they meet specific conditions.

This follows a recent announcement by RBI Governor Sanjay Malhotra, who had signalled that a revised framework was imminent when asked about the updates on Tata Sons’ compliance status with the earlier directions.

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