RBI inserts indirect public funds definition, Tata Sons listing back in focus
A week after raising hopes Tata Sons Pvt. can avoid mandatory listingThe Reserve Bank of India on Wednesday added an important definition that was not included in its updated guidelines. A potential listing now depends on the RBI’s decision on Tata Sons’ application to surrender its core investment company (CIC) licence.
The central bank had previously defined indirect receipt of public funds in a circular dated April 29 as “funds received not directly but through partners and group entities with access to public funds.” This definition was not included in the central bank’s June 24 circular (which is now available on its website), but was redacted in a footnote in Wednesday’s updated version, effective July 1, 2026.
Definition is very important for Tata Sons. Although the company does not have direct access to public funds after repaying its debt in 2024, Tata Steel Ltd., Tata Chemicals Ltd. and Tata Power Co. Ltd. Listed Tata companies, including, hold stakes in this company, making it an indirect recipient of public funds as per the definition of the RBI.
Experts said the order of changes appeared to be more of a draft statement than a fundamental change in regulatory policy.
“The reintroduction of the clarification defining ‘indirect access to public funds’ in the July 1 circular indicates that the Reserve Bank of India intends to remove interpretive ambiguities and ensure consistent application of the upper-tier NBFC framework,” said Siddartha Karnani, partner, King Stubb & Kasiva, Advocates and Advocates.
He said any ambiguity in the language could lead to inconsistent interpretations by regulated entities and market participants.
“At the same time, multiple revisions to the same regulatory framework in a short period of time may create uncertainty, especially for NBFCs assessing their regulatory status and compliance obligations,” Karnani said.
Emailed queries to Tata Sons were not immediately responded to.
in 2022 RBI releases list of top-tier NBFCsHe gave them three years to get on the list. Tata Capital Ltd. and HDB Financial Services Ltd. Many companies from this list were listed at the time, including. Tata Sons remains the only company on this list that remains private.
The RBI has now defined the upper tier as non-banks with assets of: ₹1 trillion, despite receiving feedback that it should raise the threshold ₹2.5 trillion. Tata Sons had independent assets ₹1.7 trillion by the end of March 2025.
Listing of Tata Sons is now dependent on the RBI accepting its application to submit principal investment company registration. The company has already offered.
A principal investment company is a non-bank company whose business is to purchase shares and securities and to hold at least 90% of its net assets in the form of investments in shares, preference shares, debentures, debentures, debentures or loans in group companies.
According to the RBI circular dated March 10, a core investment company can remain unregistered in two cases.
- First, if there is an entity dimension below ₹100 crore regardless of whether it accesses public funds or not.
- Second, if it has asset size ₹100 crore and above, but public funds are not accessible.
The RBI on Tuesday published a checklist that non-banking entities must fulfill while applying for license surrender. According to these norms, core investment companies must have a board resolution approving the delivery of the registration.
It should also be noted that the company will apply for certification from the RBI within three months of meeting the basic investment company criteria; accepted public funds and assets ₹100 crore or above.
Tata Sons’ annual report for FY24 states that the company has approached the RBI to voluntarily surrender its certificate of registration as a CIC during the financial year and continue as an unregistered CIC in accordance with the prescribed procedure.
