The Reserve Bank of India is set to announce a revised, principles-based framework for categorising non-banking financial companies into upper, middle, and lower layers, impacting supervision, capital requirements, and market access for major lenders like Tata Sons.
The Reserve Bank of India is set to publish a fresh list of non-banking financial companies that fall into its upper-layer category, with governor Sanjay Malhotra saying the revised framework will be based on principles rather than a rigid checklist. He stopped short of saying whether Tata Sons will be included, but indicated that the new approach should make it easier to place lenders into the base, middle and upper layers.
The update matters because the upper-layer tag brings tighter supervision and, in practice, a heavier compliance burden for some of India’s biggest shadow lenders. Under the RBI’s scale-based regulation framework, announced in October 2021, NBFCs are split into four buckets: base layer, middle layer, upper layer and top layer. Once a company is placed in the upper layer, it generally stays under enhanced regulation for at least five years, even if its metrics later weaken.
That backdrop is important for groups such as Tata Sons, Bajaj Finance, Shriram Finance and LIC Housing Finance, which have featured in past upper-layer lists. Reuters-style reporting on the RBI’s earlier annual updates shows that Tata Sons was already named in the upper-layer category for 2023-24 and again for 2024-25, alongside a broader group of large finance companies. In January 2025, the RBI’s published list included 15 firms, and some reports noted that Piramal Enterprises was left out despite meeting the scoring threshold because of a restructuring in the group.
For investors, borrowers and corporate finance teams, the practical takeaway is straightforward: the RBI is moving towards a more rule-driven system for deciding which NBFCs sit in the tighter regulatory tier. That can affect how much capital lenders must hold, how closely they are supervised and how quickly they can expand. For household customers and retail investors, the main thing to watch is which big finance names end up on the final list, because the classification can influence lending strategy, growth plans and, eventually, pricing and access to credit.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
