- RBI is reviewing Tata Sons' request to de-register as a Core Investment Company NBFC
- Tata Sons remains listed in RBI's latest Upper Layer NBFC framework with 16 others
- NBFCs with assets over Rs 1 lakh crore face enhanced regulatory oversight under new norms
The Reserve Bank of India (RBI) is examining Tata Sons' request for de-registration as a Core Investment Company (CIC)-Non-Banking Financial Company (NBFC), even as the conglomerate continues to feature in the central bank's latest list of Upper Layer NBFC, according to a recent release by RBI.
According to the updated classification, Tata Sons remains part of the RBI's Upper Layer NBFC framework, alongside state-owned lenders REC, Power Finance Corporation (PFC) and Indian Railway Finance Corporation (IRFC).
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The latest list comprises 17 NBFCs, with PNB Housing Finance and Sammaan Capital also retaining their Upper Layer status despite not meeting the revised Rs 1 lakh crore assets under management (AUM) threshold. Both companies continue in the category as they had already been classified as Upper Layer NBFCs in the earlier list.
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HUDCO will also be a part of RBI's Upper Layer NBFC framework.
The RBI's review of Tata Sons' de-registration request comes after the central bank, in June, rejected industry demands to raise the asset threshold or retain a more complex risk-based methodology for classifying large NBFCs.
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Instead, the regulator adopted a simplified framework based primarily on balance-sheet size. Under the revised norms, NBFCs with standalone assets of at least Rs 1 lakh crore will be subject to enhanced regulatory oversight similar to banks, including an eventual requirement to list on stock exchanges.
Tata Sons has long opposed a public listing, arguing that it would increase compliance and disclosure obligations. As the principal holding company of the nearly $180 billion Tata Group, any listing would have significant implications for the conglomerate's ownership structure and its shareholders.
The group's de-registration application is therefore being closely watched, as approval could potentially remove the requirement for Tata Sons to remain within the RBI's Upper Layer NBFC framework.
The Upper Layer classification subjects NBFCs to tighter regulatory standards aimed at strengthening governance, risk management and financial resilience among the country's largest shadow lenders.
The RBI's decision to retain Tata Sons in the latest list indicates that the company's de-registration request is still under examination and no final decision has been taken.
With the revised framework now in effect, the latest Upper Layer list underscores the regulator's continued focus on closer supervision of systemically important NBFCs while maintaining continuity for entities that were already part of the enhanced regulatory regime.
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