RBI Declares Upper Layer NBFCs for 2024-25 Under New Rules
The Reserve Bank of India has released a list of Non-Banking Financial Companies (NBFCs). The list comprises the entities falling under the category of Upper layer, also known as NBFC-UL for 2024-25 under the Scale-Based Regulation Framework. The framework was issued in October 2021.
According to the model, four categories of size and prominence classify the NBFCs: the base level, the middle level, the upper level, and the top level.
This year, RBI has selected 15 such NBFCs in the Upper Layer. It will bring them under more stringent regulation so that the financial system becomes safe and sound for one and all. The list of NBFCs in the Upper Layer along with their categories is as follows:
1. LIC Housing Finance Ltd.- Deposit-taking HFC
2. Bajaj Finance Ltd-Deposit-taking NBFC-ICC
3. Shriram Finance Limited: Deposit-taking NBFC-ICC
4. Tata Sons Private Limited – Core Investment Company
5. Cholamandalam Investment and Finance Company Limited – Non-deposit-taking NBFC-ICC
6. L&T Finance Limited (formerly L&T Finance Holdings Limited) – Non-deposit-taking NBFC-ICC
7. Mahindra & Mahindra Financial Services Limited – Deposit-taking NBFC-ICC
8. Aditya Birla Finance Limited – Non-deposit-taking NBFC-ICC
9. Tata Capital Limited – Non-deposit-taking NBFC-ICC
10. Piramal Capital & Housing Finance Limited – Non-deposit-taking HFC
11. PNB Housing Finance Limited Deposit taking HFC
12. HDB Financial Services Limited Non-deposit taking NBFC-ICC
13. Sammaan Capital Limited Formerly Indiabulls Housing Finance Limited Non-deposit-taking NBFC-ICC
14. Muthoot Finance Limited Non-deposit taking NBFC-ICC
15. Bajaj Housing Finance Limited Non-deposit taking HFC
Piramal Enterprises Limited, which also qualifies for scoring methodology, has not been considered this time since the business is in reorganization presently. The inclusion of Tata Sons Private Limited on the list will not deter the decision for the pending de-registration application by Tata Sons Private Limited.
It further provides that although an NBFC, classified in the Upper Layer, may not be so qualified at any time in any subsequent year or years yet it shall always be under a more intense view of the regulator for a minimum period of five years from the year the said NBFC had been classified in the Upper Layer.
It appears that the RBI is going to make the regulations over the systemically important NBFCs stricter, thereby ensuring the stability of the financial sector.
