RBI Releases Lists Of 15 NBFCs In Upper Layer Under Scale-Based Rules

The Reserve Bank of India (RBI) on Thursday, Sept 14, 2023, released a list of fifteen Non-Banking Financial Companies (NBFCs) figuring in the upper layer under the scale-based regulation.

LIC Housing Finance Limited ranked first on the list, followed by Bajaj Finance Limited in second and Shriram Finance Limited (formerly Shriram Transport Finance Company Limited) in third. However, in the list, RBI did not include TMF Business Services Limited (formerly Tata Motors Finance Limited) despite qualifying due to its ongoing business reorganisation.

Sr. No.	Name of the NBFC	Category of the NBFC
1	LIC Housing Finance Limited	Deposit taking HFC
2	Bajaj Finance Limited	Deposit taking NBFC-ICC
3	Shriram Finance Limited (formerly Shriram Transport Finance Company Limited)	Deposit taking NBFC-ICC
4	Tata Sons Private Limited	Core Investment Company (CIC)
5	L & T Finance Limited	Non-deposit taking NBFC-ICC
6	Piramal Capital & Housing Finance Limited	Non-deposit taking HFC
7	Cholamandalam Investment and Finance Company Limited	Non-deposit taking NBFC-ICC
8	Indiabulls Housing Finance Limited	Non-deposit taking HFC
9	Mahindra & Mahindra Financial Services Limited	Deposit taking NBFC-ICC
10	Tata Capital Financial Services Limited	Non-deposit taking NBFC-ICC
11	PNB Housing Finance Limited	Deposit taking HFC
12	HDB Financial Services Limited	Non-deposit taking NBFC-ICC
13	Aditya Birla Finance Limited	Non-deposit taking NBFC-ICC
14	Muthoot Finance Limited	Non-deposit taking NBFC-ICC
15	Bajaj Housing Finance Ltd.	Non-deposit taking HFC

"Despite qualifying for identification as NBFC-UL as per scoring methodology, TMF Business Services Limited (formerly Tata Motors Finance Limited) is not being included in the list of NBFC-UL in the current review due to its ongoing business reorganisation," RBI said

Moreover, "In terms of the framework, once an NBFC is classified as NBFC-UL, it shall be subject to enhanced regulatory requirement, at least for a period of five years from its classification in the layer, even in case it does not meet the parametric criteria in the subsequent year/s."

In October 2021, the RBI announced that it would establish a four-layered regulatory framework for NBFCs in order to maintain a stronger watch on the shadow banking industry and reduce risks for the entire financial system.

The NBFCs that the Reserve Bank has specifically designated as warranting enhanced regulatory requirements based on a set of criteria make up the top tier.