- The Reserve Bank of India (RBI) has classified Tata Sons Pvt Ltd as an upper layer non-banking financial company (NBFC-UL) for FY26-27, while its application for deregistration as a core investment company (CIC) remains under review.
- The RBI's decision to retain Tata Sons in the upper-layer list indicates that the regulatory process regarding its deregistration application is still ongoing.
- Under the revised framework, only NBFCs with assets of at least ₹1 lakh crore qualify for consideration as upper-layer entities, simplifying the previous multi-factor assessment.
- Tata Sons has an estimated standalone asset base of around ₹1.75 lakh crore to ₹1.9 lakh crore, comfortably exceeding the revised threshold for upper-layer classification.
- The RBI reinstated a key definition on public funds in its revised guidelines effective July 1, 2026, which affects Tata Sons' classification.
- In 2024, the RBI classified Tata Sons as an Upper Layer NBFC (NBFC-UL) due to its size and systemic importance.
- Tata Sons applied to surrender its CIC registration after taking steps to reduce borrowings and pare down certain financial activities.
- Under RBI rules, an NBFC-UL is required to list on a stock exchange within three years of being notified and comply with stricter governance and disclosure norms.
The Reserve Bank of India (RBI) has reaffirmed Tata Sons' status as an upper layer non-banking financial company (NBFC-UL) for FY26-27, adhering to a new asset-based criterion that requires NBFCs to possess assets of at least ₹1 lakh crore.148
This decision comes as Tata Sons' application for deregistration as a core investment company (CIC) is still under review. The RBI noted that Tata Sons' inclusion in the upper layer list is 'without prejudice to the outcome of its application for de-registration, which is under examination.'
In 2024, Tata Sons was classified as an NBFC-UL due to its size and systemic importance, which has implications for its governance and disclosure norms. The company, with an estimated asset base of ₹1.75 lakh crore to ₹1.9 lakh crore, comfortably meets the new threshold.6
RBI Governor Sanjay Malhotra emphasized that the classification is now more principle-based, stating, 'The list will come out very soon. But everyone knows which NBFC is in the upper layer, which is in the middle, and which is in the base.'
Despite some opposition from Tata Trusts' leadership regarding a potential public listing, the regulatory framework mandates that an NBFC-UL must list on a stock exchange within three years unless the RBI grants relief. The ongoing review of Tata Sons' deregistration application indicates that its regulatory status remains a critical issue for the company moving forward.
The RBI's latest upper-layer list also includes other significant entities such as REC Ltd, Power Finance Corporation Ltd, and Bajaj Finance Ltd among others.
“The revised framework replaces the multi-factor assessment with a simpler asset-based criterion, and Tata Sons' standalone assets are estimated at ₹1.75–1.9 lakh crore, well above the threshold. The RBI's footnote says inclusion is 'without prejudice' to the deregistration outcome, and the company remains subject to enhanced rules for at least five years even if it later falls below the threshold.”
The Indian Express
