The RBI classified Tata Sons as an upper-layer non-banking financial company (NBFC) in September 2022, and it must therefore be listed on the stock exchanges by September 2025 unless it manages to get an exemption or gets deregistered. The Economic Times reported on 6 January that Tata Sons voluntarily surrendered its certificate of registration with the RBI last year.
Under examination
On Thursday, the RBI said that the application was “under examination”.
RBI regulations classify NBFCs into four layers based on their size, activity and perceived risks. The upper layer comprises prominent names like Tata Sons, LIC Housing Finance and Shriram Finance. Those in the upper layer are subject to greater regulatory scrutiny than their smaller peers.
The regulator said in its 2021 guidelines that upper-layer NBFCs must be listed within three years of being identified as one. A few, such as Piramal Capital and Housing Finance and Aditya Birla Finance, have tried to sidestep this by announcing mergers with their listed parents.
Mint reported in August how Tata Sons turned debt-free in a bid to avoid getting listed. Tata Sons had no loans from banks and other financial institutions as of 30 June, as against ₹18,809 crore or 44% of its total liabilities in the same period last year.
Meanwhile, RBI said on Thursday that despite qualifying as an upper-layer NBFC as per scoring methodology, Piramal Enterprises is not being included in the list in the current review due to ongoing reorganization in the business group. In May 2024, Piramal Enterprises Ltd announced it will merge with its unlisted subsidiary Piramal Capital and Housing Finance Ltd.
NBFC, RBI
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