The Reserve Bank of India (RBI) has proposed recalibration of the criteria for identifying upper layer non-banking finance companies (NBFCs), a move that could in future shine light on the listing of Tata Sons, the holding company of the sprawling salt to semiconductor behemoth.
The apex bank pitched for an asset-size-based approach as against the earlier parametric system and inclusion of state-run entities in a bid to make the process more transparent and simpler.
According to the draft rule of ‘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 entities having assets of over ₹1 lakh crore. Public comments will be accepted till May 4.
Upper layer NBFCs are the biggest and most systemically important non-bank lenders, whose failure could pose risks to the broader financial system, and are therefore subject to stricter regulatory oversight.
“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 ₹1,00,000 crore and above,” the draft put on the RBI website said.
The draft comes at a time when the listing of Tata Sons is under intense conversation. Noel Tata, chairman of Tata Trusts – the largest shareholder of Tata Sons – is understood to be not in favour of listing the holding company, even as opinions are divided among board of Tata Sons and trustees of Tata Trust over the issue.
In 2022, the RBI had categorised 14 NBFCs and Tata Sons as upper layer NBFCs and mandated them to get listed by September 30, 2025. Tata Sons had thereafter sought to surrender its core investment company registration by becoming net debt free to avoid the mandatory listing requirement. The RBI has not adjudicated on the company’s request thus far.
A source close to the group said it was examining the implication of the draft rule on the matter. An industry source said the RBI may have kept the door open for specific exclusion from the criteria of identifying upper layer NBFC. Tata Sons had an asset base of ₹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.
Earlier in the day, Shapoorji Pallonji Group, which holds an 18 per cent stake in Tata Sons, reiterated its demand of public listing of Tata Sons and asked the RBI and the government to act decisively, adding that a listing would be of public interest.
A listing of Tata Sons not only allow cash strapped SP group to monetise its shareholding, it will also open up vistas for the holding company to raise cash to fund its fledgling businesses, such as loss-making aviation company Air India or its big bets in semiconductor.
RBI governor Sanjay Malhotra had on Wednesday announced that the apex bank will be coming up with a revised framework on NBFCs, when asked about the update on Tata Sons’ compliance with the earlier directions.