The Reserve Bank of India has increased its upper-layer list of non-banking financial companies to 17 entities, incorporating four government-backed firms, as Tata Sons remains under regulator review amid debates over its public listing and governance.
The Reserve Bank of India has expanded its upper-layer list of non-banking finance companies to 17 entities, up from 15 in the first version released in 2022, with four state-owned lenders now included alongside Tata Sons, which remains under the regulator’s scrutiny. According to the RBI’s latest list, the government-backed entities are REC, Power Finance Corporation, Indian Railway Finance Corporation and Housing and Urban Development Corporation.
The upper layer is the most closely watched tier under the central bank’s scale-based regulation framework for NBFCs. Firms in this category are subject to tighter governance and supervisory requirements and must also prepare to list within three years if they are not already publicly traded. The RBI says the layer is designed for companies with assets of ₹1 lakh crore or more, a threshold that has now become the main test for inclusion.
Two firms, PNB Housing Finance and Sammaan Capital, dropped out of the latest list because they no longer meet the asset criterion. Even so, the RBI said they will stay under enhanced regulatory requirements for at least five years from the date they were first placed in the layer. The central bank also said Tata Sons remains in the NBFC-UL category without prejudice to its pending application for deregistration, which is still under review.
The status of Tata Sons continues to draw attention because the company is 66% owned by various Tata Trusts and sits at the centre of the wider Tata group. The Hindustan Business Line reported that there is disagreement within the board over whether a public listing would strengthen transparency and capital access or, as opponents argue, risk affecting the trusts’ philanthropic work in health, education and scientific research. Rajat Sethi, partner at S&R Associates, told the paper that if deregistration is refused, Tata Sons may have to cut assets below the threshold or pursue a deeper restructuring, both difficult options for a group holding company of its scale.
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