The Reserve Bank of India’s (RBI) latest proposal to classify non-banks with assets over ₹1 trillion in the upper layer could leave little wiggle room for Tata Sons, save for the benevolence of the central bank. The holding firm of the eponymous group has been in the category in recent years, a classification that entails tighter regulatory oversight and a mandatory listing requirement.
The new norms, released on 10 April, currently in the form of a draft circular, take away a part of RBI’s discretion in deciding who gets to be on the list. The defining criteria for a non-bank to enter the club now is if it has assets of ₹1 trillion or more. Experts said this would indicate the inevitable continued inclusion of Tata Sons, which had total assets of ₹1.75 trillion on a standalone basis as on 31 March 2025.
The stakes are significant for Tata Sons. The listing norm and a tighter oversight would both sit uneasily with its role as a closely-held group holding company.
It will then depend on whether RBI grants it an exemption from these norms or accepts its request to deregister as a core investment company (CIC), a form of non-bank financier, considering it has given up access to public funds. Public funds include funds raised either directly or indirectly through public deposits, inter-corporate deposits, bank finance and all funds received from external sources.
Mint had reported in 2024 that Tata Sons turned debt-free in a bid to avoid getting listed under the upper layer regulations. In fiscal year 2024 (FY24), Tata Sons had applied to surrender its registration and become an unregistered CIC.
Per RBI regulations, a core investment company with assets of over ₹100 crore and not availing of public funds can remain unregistered. Those below the ₹100 crore mark can remain unregistered even if they accept such funds.
“While the new circular will apply to NBFCs, including core investment companies (CICs), the Reserve Bank of India can exempt them on a case-to-case basis,” said R. Gandhi, a former RBI deputy governor.
A core investment company is a non-bank whose business is to acquire shares and securities, and hold at least 90% of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies.
Pointing to RBI’s November 2025 regulations, Gandhi said if RBI considers it necessary for avoiding any hardship for any other just and sufficient reason, it could grant extension of time for compliance or exempt any CIC from all or any of the provisions of the regulations.
RBI regulations classify NBFCs into four layers based on their size, activity and perceived risks. Those in the upper layer are subject to greater regulatory scrutiny than their smaller peers. The list has large and systematically-important names such as Tata Sons, LIC Housing Finance and Shriram Finance, with Tata Sons featuring here since the first list came in 2022. This was subsequently revised in 2023, and then in 2025 with a count of 15 companies.
RBI had released the first list of 16 such non-banks in September 2022, giving them time till end-September 2025 for listing. While those such as Tata Capital and HDB Financial Services listed in time, Tata Sons remains the list's only company that is private.
Abizer Diwanji, founder of strategic advisory provider Neostrat Advisors said that as of today, RBI has the discretion to identify a company as an upper layer NBFC, based on non-financial criteria. He was referring to the existing regulations that the draft proposes to amend.
“Further, CIC regulations state very clearly that companies are regarded as NBFC CIC only if they have assets over ₹100 crore and they have taken public deposits directly or indirectly,” said Diwanji.
He said that accordingly, the first step for Tata Sons would be to check if they are an NBFC CIC. And if they are, then under current and proposed regulation, they would be classified as an upper layer NBFC.
Even as RBI’s updated list of upper layer NBFCs is awaited following the proposed refresh in guidelines, a list of all non-banks registered with the central bank shows Tata Sons remained in the upper layer even in the FY26 list released on 10 April. The list names 9,075 non-banks, including 59 core investment companies.
According to a consultant, who has worked with the Tata Group, the recent draft circular does not change anything for the conglomerate.
“Tata Sons has already made certain structural changes to its liabilities by giving up public funds," said the consultant cited above. By defining the ₹1 trillion threshold, RBI’s new proposal ensures Tata Sons remains in the upper layer, unless specifically exempted, the consultant added.
