Upper Layer NBFCs: RBI List Due, Tata Sons Seeks Exit
Why in the news
At the post-policy press meet, the RBI Governor said the revised list of systemically important NBFCs is being finalised. No list was put out for the year ended March 2026, and Tata Sons’ request to leave the category is under review.
Key facts
- Speaker: Governor Sanjay Malhotra.
- Tata Sons, the Tata Group holding company, wants to de-register as an NBFC-UL, which would spare it the listing rule (deadline had been September 2025).
- It first appeared in the 2022-23 initial list; the RBI says the matter is under examination.
Scale-Based Regulation (SBR)
In force since 1 October 2022; layers depend on size, activity and systemic risk.
| Layer | Who falls here | Regulation |
|---|---|---|
| Base (BL) | Mostly non-deposit NBFCs under ₹1,000 crore assets | Lightest |
| Middle (ML) | Deposit-takers, larger non-deposit NBFCs above ₹1,000 crore, standalone primary dealers, infra and housing finance companies | Tighter |
| Upper (UL) | Systemically significant firms picked by RBI | Strictest, near bank-like; listing within 3 years |
| Top (TL) | Reserved for extreme systemic risk | Empty at present |
Upper Layer identification
- Chosen every year using a scoring method covering size, leverage, interconnectedness, complexity and supervisory inputs.
- Extra requirements: higher capital adequacy, bigger exposure limits, tougher governance, bank-like CET1 norms, plus mandatory listing.
About NBFCs
- Financial firms that lend, invest in securities and offer financial services but cannot take demand deposits.
- Regulated by RBI under the RBI Act, 1934.
- Types: loan, investment, asset finance, microfinance, infrastructure finance and housing finance companies.
- Important for financial inclusion, especially MSMEs, vehicle finance and underserved areas.
Exam angle
- SBR start date: 1 October 2022; four layers.
- Top Layer currently has no NBFCs.
- Upper Layer firms must list within 3 years of identification.