Tata Sons NBFC De-registration: RBI Review - Business News
By Rediff Money Desk, Mumbai Jan 16, 2025 17:54
RBI keeps Tata Sons on list of large NBFCs that must list on stock exchanges but de-registration application is pending review. Learn more about the implications.
Mumbai, Jan 16 (PTI) The RBI on Thursday again named Tata Sons -- the holding company of salt to software conglomerate -- among the large NBFCs that need to mandatorily list on stock exchanges, but the decision on de-registration of the company as NBFC, which will exempt it from going public, is pending with the central bank.
The Reserve Bank on Thursday released the list of 15 NBFCs in the Upper Layer (NBFC-UL) under Scale Based Regulation for non-banking finance companies, which besides Tata Sons Private Limited, include Tata Capital, LIC Housing Finance, Bajaj Finance, and Aditya Birla Finance.
According to the RBI's 'Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs', NBFC-UL shall be mandatorily listed within three years of identification as NBFC-UL. The norms came into effect from October 1, 2022.
Tata Sons Private Limited, a core investment company, was categorised as NBFC-UL on September 30, 2022.
Tata Sons, however, has applied for de-registration as a NBFC, and its application is still pending with the Reserve Bank.
"... 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," the RBI said while releasing the list of 15 NBFCs in the Upper Layer (NBFC-UL) under Scale Based Regulation for NBFCs.
As per the regulations, NBFCs are classified into four categories -- Base Layer, Middle Layer, Upper Layer and Top Layer -- based on their size, activity, and perceived riskiness.
The Upper Layer comprise of those NBFCs which are specifically identified by the Reserve Bank as warranting enhanced regulatory requirement based on a set of parameters and scoring methodology.
The top ten eligible NBFCs in terms of their asset size always reside in the upper layer, irrespective of any other factor.
On Thursday, the RBI also said that despite qualifying for identification as NBFC-UL as per scoring methodology, Piramal Enterprises Limited is not being included in the list in the current review due to ongoing reorganisation in the business group.
The other NBFCs on the list are: Shriram Finance, Cholamandalam Investment and Finance Company, L&T Finance, Mahindra & Mahindra Financial Services, Piramal Capital & Housing Finance, PNB Housing Finance, HDB Financial Services, Sammaan Capital, Muthoot Finance, and Bajaj Housing Finance.
In terms of the framework, once an NBFC is classified as NBFC-UL, it will be 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 year/s.
The Reserve Bank on Thursday released the list of 15 NBFCs in the Upper Layer (NBFC-UL) under Scale Based Regulation for non-banking finance companies, which besides Tata Sons Private Limited, include Tata Capital, LIC Housing Finance, Bajaj Finance, and Aditya Birla Finance.
According to the RBI's 'Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs', NBFC-UL shall be mandatorily listed within three years of identification as NBFC-UL. The norms came into effect from October 1, 2022.
Tata Sons Private Limited, a core investment company, was categorised as NBFC-UL on September 30, 2022.
Tata Sons, however, has applied for de-registration as a NBFC, and its application is still pending with the Reserve Bank.
"... 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," the RBI said while releasing the list of 15 NBFCs in the Upper Layer (NBFC-UL) under Scale Based Regulation for NBFCs.
As per the regulations, NBFCs are classified into four categories -- Base Layer, Middle Layer, Upper Layer and Top Layer -- based on their size, activity, and perceived riskiness.
The Upper Layer comprise of those NBFCs which are specifically identified by the Reserve Bank as warranting enhanced regulatory requirement based on a set of parameters and scoring methodology.
The top ten eligible NBFCs in terms of their asset size always reside in the upper layer, irrespective of any other factor.
On Thursday, the RBI also said that despite qualifying for identification as NBFC-UL as per scoring methodology, Piramal Enterprises Limited is not being included in the list in the current review due to ongoing reorganisation in the business group.
The other NBFCs on the list are: Shriram Finance, Cholamandalam Investment and Finance Company, L&T Finance, Mahindra & Mahindra Financial Services, Piramal Capital & Housing Finance, PNB Housing Finance, HDB Financial Services, Sammaan Capital, Muthoot Finance, and Bajaj Housing Finance.
In terms of the framework, once an NBFC is classified as NBFC-UL, it will be 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 year/s.
Source: PTI
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