India’s central bank on Friday proposed changes to its scale-based regulations for non-banking financial companies simplifying criteria for so-called upper layer non-banks and allowing state-owned NBFCs to join the club.
NBFCs with assets of ₹1 trillion or more are proposed to be included in the list replacing an earlier methodology of quantitative and qualitative parameters. Upper layer non-banks face tighter regulations than smaller ones.
A list of all NBFCs for fiscal 2026 released by the Reserve Bank of India on Friday included the name of Tata Sons among others in the upper layer. Yet, it leaves it unclear whether the holding company of the Tata Group of companies is an NBFC or not.
This becomes important because rules mandate all upper layer non-banks should list on the equity markets.
But, Tata Sons had surrendered its NBFC licence earlier, a move that was seen as allowing it to stay private.
The RBI said in January 2025 that it is examining the apex Tata company's application but has not said anything since. “There is limited clarity,” said Vivek Iyer, partner and national leader, financial services, risk at audit and consultancy firm Grant Thornton Bharat.
As of FY25, Tata Sons’ total assets on a consolidated and standalone basis were at ₹9.7 trillion and ₹1.75 trillion, respectively.
The RBI had first published a list of 16 upper-layer NBFCs and mortgage lenders in September 2022. The entities were given three years to go public (end-September 2025), unless they were already listed.
The upper layer list was revised to 15 entities in January 2025 for FY25—including prominent names like Tata Sons, LIC Housing Finance and Shriram Finance—but the deadline to go public was not changed.
Tata Sons is the only company left on the upper layer list to remain private. It went near debt-free in 2024.
Emails sent to Tata Sons and RBI remained unanswered.
An expert quoted earlier said the recent market correction makes the timing bad for equity issuers. “We therefore expect a leeway in the listing deadline for the large NBFC, which is part of the large Indian conglomerate," said Iyer of Grant Thornton Bharat.
Others said that RBI’s push to expand the NBFC upper layer seems to be focused on strengthening pre-emptive, risk-based supervision.
“By widening the net beyond just the largest entities, RBI aims to better capture systemic risks arising from interconnectedness, leverage, and complexity, while reducing regulatory arbitrage,” said Sagar Lakhani, partner, accounting and reporting consulting, Uniqus Consultech.
Lakhani said that the new approach reflects a clear shift toward early intervention and aligning large NBFCs more closely with bank-like regulatory standards.