RBI unveils 2024-25 upper-layer NBFCs list, includes Tata Capital

The Reserve Bank of India (RBI) has announced the list of NBFCs in the upper layer under scale-based regulation for NBFCs for the year 2024-25, in which LIC Housing Finance Limited, Bajaj Finance Limited and Shriram Finance Limited have grabbed the top three places.

This year, Tata Capital has found its place in the upper layer of NBFCs identified by the RBI. Other NBFCs in the list include Tata Sons Private Limited, Cholamandalam Investment and Finance Company Limited, L&T Finance Limited (Formerly known as L&T Finance Holdings Limited), Mahindra & Mahindra Financial Services Limited, Aditya Birla Finance Limited, Piramal Capital & Housing Finance Limited, PNB Housing Finance Limited, HDB Financial Services Limited, Sammaan Capital Limited (Formerly known as Indiabulls Housing Finance Limited), Muthoot Finance Limited and Bajaj Housing Finance Limited. These top 15 NBFCs by asset size are automatically placed in the upper layer, regardless of other factors.  

The Reserve Bank issued the scale-based regulation (SBR), a revised regulatory framework for NBFCs on October 22, 2021, which categorises NBFCs into base layer (NBFC-BL), middle layer (NBFC-ML), upper layer (NBFC-UL) and top layer (NBFC-TL) and gives the methodology to identify them in the upper layer as per their asset size and scoring methodology.

The RBI says despite qualifying for identification as NBFC-UL as per scoring methodology, Piramal Enterprises is not being included in the list of NBFC-UL in the current review due to ongoing reorganisation in the business group. "Further, the 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," it adds.

Notably, after an NBFC is classified as NBFC-UL, it is subject to enhanced regulatory requirements, at least for five years from its classification in the layer, even in case it does not meet the parametric criteria in the subsequent years.

The RBI's base layer comprises non-deposit-taking NBFCs below the asset size of ₹1,000 crore, while those in the middle layer comprise all deposit-taking NBFCs with asset size of ₹1,000 crore and above and those who work as standalone primary dealers, infrastructure debt fund, core investment companies, housing finance companies, and infrastructure finance firms.