The RBI’s latest amendments to the Scale-Based Regulation framework have effectively shut the door on any regulatory relief for Tata Sons, reinforcing the requirement for the holding company to transition into a listed entity. By lowering the complexity in identifying upper-layer non-banking financial companies (NBFC-UL) to a clear asset-size threshold of ₹1 lakh crore, the RBI has made it nearly certain that Tata Sons—given its balance sheet strength—will continue to remain within the upper layer and therefore subject to stricter regulatory obligations.
Under the revised guidelines, any NBFC crossing the ₹1 lakh crore asset mark is automatically classified as an upper-layer entity, eliminating earlier discretion provided under a parametric scoring system. This tightening leaves Tata Sons with limited room to argue against its classification. The RBI’s rejection of industry feedback seeking a higher ₹2.5 lakh crore threshold further underscores its intent to cast a wider regulatory net, directly affecting large conglomerate holding companies.
Eligibility Criterion
Nazneen Ichhaporia, Partner at ANB Legal, said that Tata Sons would be classified as an Upper Layer NBFC only once the RBI formally notifies it as such, based on its meeting the eligibility criterion of having an asset size of ₹ 1 lakh crore or more as reflected in its latest audited balance sheet.
She noted that both conditions—meeting the asset threshold and being specifically identified by the RBI—must be satisfied before the company is required to comply with the regulatory obligations applicable to Upper Layer NBFCs. “The only limited respite available to Tata Sons would be till their name is notified by the RBI as an Upper Layer NBFC, which is very likely,” she adds.