The Reserve Bank of India (RBI) has retained Tata Sons in the list of upper-layer non-banking financial companies (NBFC-UL), saying the company's application to surrender its NBFC licence, submitted in August 2024, is still under examination. The decision prolongs uncertainty over the holding company's listing plans, which the Tata Group has sought to avoid.
"Inclusion of Tata Sons 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 on Thursday while updating the list. The number of upper-layer NBFCs has risen to 17 from 15 in the previous list released in January 2025.
The central bank reiterated that once an NBFC is classified as an NBFC-UL, it remains subject to enhanced regulatory requirements for at least five years, even if it fails to meet the qualifying criteria in subsequent years.
Under RBI regulations, private sector NBFCs classified as upper-layer entities are required to list on stock exchanges within three years of their classification.
In June, Noel Tata, chairman of Tata Trusts, which owns 66.4% of Tata Sons, wrote to the RBI opposing any potential listing. He argued that listing the holding company could alter its long-term character and undermine the philanthropic objectives of the trusts.
To comply with the earlier framework issued in October 2022, Tata Sons had repaid all its debt by March 2024 in an attempt to avoid a mandatory listing by September 2025. It subsequently applied for cancellation of its NBFC-CIC registration in August 2024.
The issue has become increasingly contentious within the Tata ecosystem. Opposition to listing Tata Sons is understood to have figured prominently in internal discussions, including those surrounding Tata Group chairman N. Chandrasekaran's reappointment for a third term. His current tenure ends in February. Tata Sons is scheduled to hold its annual general meeting on August 18.
The expanded list of NBFC-UL also reflects the RBI's decision in April to include eligible government-owned NBFCs in the upper layer under its ownership-neutral regulatory approach. Among the additions are Power Finance Corporation (PFC), REC, which is proposed to be merged with PFC, and Indian Railway Finance Corporation (IRFC). PNB Housing Finance and Sammaan Capital have also been added to the upper-layer list.
Upper-layer NBFCs are identified by the RBI for enhanced regulation based on revised criteria, including an asset threshold of Rs1 lakh crore. The central bank said the asset threshold will be reviewed every three years.
Tata Sons, the holding company of the over $165-billion Tata Group, is registered as a core investment company (CIC). It had standalone assets of nearly Rs1.75 lakh crore as of March 2026, while its consolidated assets were close to ₹6 lakh crore.
While government-owned NBFCs classified as upper-layer entities are exempt from the mandatory listing requirement, private sector NBFCs must go public within three years of being designated as NBFC-UL.