NEW DELHI: THE Reserve Bank of India (RBI) said on Thursday that 15 large non-banking financial companies (NBFCs), including LIC Housing Finance, Bajaj Finance, Shriram Finance, and Tata Sons, will be subject to enhanced regulatory requirements. RBI has categorised NBFCs into Base Layer (NBFC-BL), Middle Layer (NBFC-ML), Upper Layer (NBFC-UL), and Top Layer (NBFC-TL). It released a list of 15 large NBFCs falling in the Upper Layer category.
Others on the list include L&T Finance, Piramal Capital & Housing Finance, Cholamandalam Investment, and Finance Company. Indiabulls Housing Finance, Mahindra & Mahindra Financial Services, Tata Capital Financial Services, PNB Housing Finance, HDB Financial Services, Aditya Birla Finance, Muthoot Finance, and Bajaj Housing are also part of the list.
According to RBI, despite qualifying for identification as NBFC-UL as per scoring methodology, TMF Business Services (formerly Tata Motors Finance Ltd) is not included in the list of NBFC-UL in the current review due to its ongoing business reorganisation.
There is a prescribed methodology to identify the NBFCs in the Upper Layer as per their asset size and scoring methodology. In terms of the ‘Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs’ issued in October 2021, once an NBFC is classified as NBFC-UL, it will be subject to enhanced regulatory requirements. This will be for at least a period of five years from its classification in the layer, even in case it does not meet the parametric criteria in the subsequent years.