Despite its application to deregister as an NBFC-Core Investment Company (CIC) remaining under consideration, Tata Sons, the holding company of the Tata group, continues to be classified as an 'upper-layer non-banking financial company' (NBFC) by the Reserve Bank of India (RBI), subjecting it to enhanced regulation and a mandatory listing requirement.
Key Points
- Tata Sons continues to be classified as an 'upper-layer NBFC' by the RBI, a status confirmed by Governor Sanjay Malhotra.
- The company's application to deregister as an NBFC-Core Investment Company (CIC) is still under consideration, creating uncertainty around its mandatory listing.
- Under revised norms, NBFCs with assets exceeding Rs 1 trillion qualify for the upper layer and must list on stock exchanges within three years.
- Tata Sons' standalone assets are over Rs 1.75 trillion, meeting the criteria for an upper-layer NBFC.
- The RBI's reinstatement of 'indirect access to public funds' as a criterion means Tata Sons could still be deemed to have such access through group companies, potentially requiring it to remain a CIC and list.
Tata Sons — the holding company of the Tata group, the salt-to-software conglomerate — continues to be classified as an upper-layer non-banking financial company (NBFC), Reserve Bank of India (RBI) Governor Sanjay Malhotra indicated on Wednesday, stressing that the framework is now principle-based.
However, its application to deregister as an NBFC-Core Investment Company (CIC) remains under consideration.
RBI's Stance on NBFC Classification
"It is now principle-based. As per those principles everyone knows what the list is. That is where the matter stands," Malhotra said at the post-monetary policy press conference, responding to a question on when the 2025-26 upper-layer NBFC list would be published.
The RBI released the 2024-25 upper-layer list in January 2025; the previous year's list was also published in January.
"All those who meet the criteria (of upper, middle, and lower layer NBFC) continue to be on the list. As far as new list is concerned, it is principle-based, and that will continue. The status is what it was earlier," said Malhotra.
The RBI governor added that everyone now knows which NBFC is in the upper layer, middle layer, and base layer.
Deputy Governor Shirish Murmu said the updated list would be released "very soon".
Regulatory Framework and Tata Sons' Position
Under revised norms that came into effect in June, NBFCs with assets exceeding Rs 1 trillion qualify for the upper layer. Such entities are subject to enhanced regulation and must list on stock exchanges within three years of being classified. Tata Sons' standalone assets are over Rs 1.75 trillion.
Uncertainty over Tata Sons' listing, however, persists as the RBI, according to sources, is yet to take a final call on its application to surrender the CIC licence.
The holding company approached the RBI in 2024 seeking de-registration after becoming debt-free, a move that would allow it to remain a privately held, unlisted company. The application has remained pending even after the September 30, 2025, listing deadline.
Tata Sons was first classified as an upper-layer NBFC in 2022 under the RBI's scale-based regulatory framework and remained on the latest upper-layer list published in 2025.
Composition of Upper-Layer NBFCs
The current upper-layer comprises 15 NBFCs: Bajaj Finance, Shriram Finance, L&T Finance, Tata Capital, LIC Housing Finance, Cholamandalam Investment & Finance, Mahindra & Mahindra Financial Services, Aditya Birla Finance, Piramal Capital & Housing Finance, Muthoot Finance, HDB Financial Services, Sammaan Capital, Bajaj Housing Finance, PNB Housing Finance, and Tata Sons.
In April, the RBI proposed defining the upper layer as NBFCs with assets of Rs 1 trillion or more based on the latest audited financial statements. The proposal was finalised in June. Earlier, the scale-based regulatory framework identified upper-layer NBFCs using a scoring model with quantitative and qualitative parameters weighted 70 per cent and 30 per cent, respectively.
Impact of Regulatory Amendments
Tata Sons' proposed listing has been under scrutiny since the RBI amended the upper-layer NBFC regulations.
A second amendment issued in late June briefly raised expectations of relief after omitting an explanation on "indirect receipt of public funds" that had been introduced through the April amendment.
The RBI, however, reinstated the explanation in the updated Directions effective July 1, retaining indirect access to public funds through group companies and associates as a relevant criterion.
As several Tata group companies raise funds through bank borrowings, debentures, commercial paper and other market instruments,
Tata Sons could still be deemed to have indirect access to public funds despite being debt-free.
That could require it to remain registered as a CIC, continue as an upper-layer NBFC and comply with the mandatory listing requirement.
