RBI finalises NBFC-UL norm that may see Tata Sons list
While doing so, it rejected feedback from the industry which suggested raising the ceiling to ₹2.5 lakh crore. It also noted that those who fall into the category will be “specifically identified annually” by the regulator; This was first mentioned in the original scale-based regulations published in 2002. But in FY26, the regulator has not published a list of top NBFCs.
This particular circular, one of hundreds of technical circulars issued by the central bank, assumes significance due to the singular question surrounding top-tier NBFC regulations – whether Tata Sons, the parent company of the Tata group, will be tasked with making a public listing. Wednesday’s circular finalized the regulatory threshold that the Reserve Bank of India (RBI) had first laid out in its draft circular in April. Earlier, inclusion as a top-tier NBFC depended on whether a company was in the top 10 by asset size in the country.
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Tata Sons, the unlisted holding company of the growing salt-to-semiconductors conglomerate, has been mandated to list by September 2025. In January last year, when the RBI last published the list of top NBFCs expected to list, it had stated that Tata Sons’ application to surrender the NBFC license was under evaluation. Since then, the regulator has been conspicuously silent on the issue.
Tata Trusts, the majority owner of Tata Sons, passed a resolution stating that the company should remain delisted. Two of the vice presidents – Venu Srinivasan and Vijay Singh – later said in public statements that the listing would be a positive outcome. Their comments became a source of disagreement among the trustees; This includes the Trust’s chairman, Noel Tata, who is staunchly opposed to the listing.
Tata Sons’ public listing has far-reaching implications because of how its shareholders retain control over the board. The majority owner of public charitable trusts under the umbrella of Tata Trusts has special rights because the private limited company structure allows for such privileges which would cease if the company is converted into a public limited structure; This is a must before going public. While major decisions currently require the affirmative vote of Tata Trusts’ nominated directors, in a public company all board members will have equal voting rights, eliminating the main instrument of control used by trusts.
The new norms will be effective from the date the RBI publishes the new list of companies that will fall under the upper tier category.
“The upper tier will consist of NBFCs with asset size of Rs 1 lakh crore and above as per the last audited balance sheet of the financial year,” the RBI said. “The upper tier will consist of NBFCs specifically identified annually by the Central Bank as they warrant enhanced regulatory requirements based on the following criteria…”
In the final guidelines issued on the methodology for determining NBFC-UL assets, the central bank simplified the earlier multi-parameter approach and rejected suggestions to increase the asset threshold to Rs 2.5 lakh crore.
Asset Base of Tata Sons
An ETIG analysis showed that Tata Sons’ standalone asset size is around Rs 1.9 lakh crore. The consolidated market value of Tata holding is over $300 billion.
Senior group officials close to the development said regulatory arrangements keep open the possibility of a listing for Tata Sons in the future, but their impact needs to be closely examined.
Tata Sons did not comment on ET’s queries on the matter till the publication of this report.
Also Read: Noel Tata flags unresolved issues; Reappointment of Tata Sons chairman put on hold
The RBI said it has received feedback to increase the threshold to at least Rs 2.5 lakh, along with additional metrics such as profitability and asset quality. However, it rejected the proposal, saying that the ₹1 lakh crore threshold was determined based on the current profile of the industry and analysis of existing top-tier NBFCs.
The feedback submitted to the RBI suggested that asset size alone may not fully reflect systemic importance and should be supplemented by parameters that reflect interconnectedness and systemic risk. He also said any revised methodology should take into account the institution’s risk profile, leverage, interconnectedness and other audit considerations.
The regulator has also moved to make the framework more transparent by replacing the previous parametric scoring methodology with a clear asset size criterion, which it says is a reasonably good indicator of systemic importance.
Separately, the RBI said listing will not be mandatory for state-owned NBFCs that are wholly owned and controlled by the state, given their development powers.
