RBI retains Tata Sons on upper layer NBFC list; deregistration plea still under review

The Reserve Bank of India (RBI) on Thursday retained Tata Sons Pvt. Ltd. in its latest list of upper layer non-banking financial companies (NBFC-UL), while clarifying that the move is "without prejudice" to the outcome of the holding company's pending application for deregistration as a core investment company (CIC).

The central bank released the 2026-27 list of NBFCs classified under the upper layer of its scale based regulation (SBR) framework, prepared using the revised identification criteria based on financials as of March 31, 2026. RBI said the 2025-26 list was not issued because it had reviewed the criteria for identifying upper layer NBFCs during the year before finalising the revised framework.

"Tata Sons Private Limited" figures among the 17 entities identified as upper layer NBFCs. However, the RBI added a crucial footnote stating, "Inclusion of Tata Sons Private Limited in the list of NBFC-UL is without prejudice to the outcome of its application for de-registration, which is under examination."

Deregistration decision still awaited

The qualification is important because Tata Sons has been seeking to surrender its registration as a CIC after substantially reducing its debt, arguing that it should no longer be regulated as an NBFC. The application has remained pending with the RBI, and Thursday's notification makes it clear that the regulator has neither approved nor rejected the request.

The upper layer classification carries enhanced regulatory requirements for systemically important NBFCs. Tata Sons was first placed in the category in 2022 under RBI's scale-based regulatory framework, triggering market speculation over a potential public listing after the company sought deregistration instead of pursuing an initial public offering.

A day before the notification, RBI Governor Sanjay Malhotra had indicated that the revised list would be issued shortly under a principle-based framework, while declining to comment specifically on Tata Sons' inclusion.

Seventeen NBFCs on the latest list

Apart from Tata Sons, the Upper Layer list includes REC Ltd, Power Finance Corporation, Indian Railway Finance Corporation, Bajaj Finance, Shriram Finance, LIC Housing Finance, Cholamandalam Investment and Finance, Tata Capital, Muthoot Finance, Aditya Birla Capital, Housing and Urban Development Corporation (HUDCO), Mahindra & Mahindra Financial Services, L&T Finance, Bajaj Housing Finance, HDB Financial Services and Piramal Finance.

The RBI also clarified that once an NBFC is classified as an upper layer entity, it remains subject to enhanced regulatory requirements for at least five years, even if it subsequently fails to meet the qualifying criteria. Accordingly, PNB Housing Finance and Sammaan Capital will continue to remain in the upper layer despite not meeting the revised criteria in the current exercise.

The notification leaves Tata Sons' listing question unresolved rather than settled. By retaining the company in the upper layer while keeping its deregistration plea pending, the RBI has preserved the regulatory status quo, with the fate of any eventual IPO hinging on its decision on the pending application.