The Reserve Bank of India has revised its scale-based regulation criteria for non-banking finance companies, including Tata Sons, amid increased regulatory scrutiny and changes to asset-based thresholds.
The Reserve Bank of India has put 17 non-banking finance companies in its second upper-layer list under the scale-based regulation framework, one more than in the first round released in 2022. The latest roster includes four state-owned lenders , REC, Power Finance Corporation, Indian Railway Finance Corporation and Housing and Urban Development Corporation , alongside Tata Sons, which remains classified in the highest regulatory bucket for large NBFCs.
The RBI has also sharpened the test for inclusion. In a second amendment issued this year, the central bank said upper-layer status will now be determined solely by asset size of ₹1,00,000 crore or more, replacing the earlier multi-factor assessment. The threshold will be reviewed every three years, and the change takes effect immediately. The RBI also said NBFCs that are part of scheduled commercial bank groups must follow the relevant 2025 rules where their businesses overlap with those of parent banks.
Two companies, PNB Housing Finance and Sammaan Capital, have dropped out of the upper-layer list because they no longer meet the latest criteria. Even so, the RBI said they will remain under enhanced regulation for at least five years from the date of their original classification, even if they fall below the cut-off in later years.
Tata Sons’ place on the list remains politically and commercially sensitive. The RBI said its inclusion is without prejudice to the company’s pending de-registration application, which is still under review. Tata Sons had been required to list by September 2025 under the applicable norms, but directors remain split over whether an IPO would weaken the group’s philanthropic trusts or, alternatively, improve transparency, valuation and access to capital for new ventures. Rajat Sethi of S&R Associates told The Hindu BusinessLine that if de-registration is refused, Tata Sons may have to shrink its balance sheet below the threshold or undergo structural change, both difficult options for the Tata Group holding company.
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.
