Tata Sons, Tata Sons among 16 NBFCs put in upper layer

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Tata Sons, Tata Sons among 16 NBFCs put in upper layer

The RBI released a list of large companies NBFCs including Tata Sons, the holding company of Tata Group, which was put in the upper layer under the scale based regulatory framework that was released last year.

As many as sixteen have been put in the list and asked by the regulators to put in place a board approved policy for adoption of the increased regulatory framework applicable to them.

Nearly all large NBFCs, including Bajaj Finance, LIC Housing Finance, Shriram Transport Finance, L&T Finance, Piramal Capital Housing Finance, PNB Housing Finance, Tata Capital, Aditya Birla Finance, HDB Financial Services and Mahindra and Mahindra and Mahindra Financial Services, have been placed in the upper layer, along with Tata Capital, Aditya Birla Finance, HDB Financial Services and Mahindra and Mahindra and Mahindra and Mahindra

Further in the upper layer are Indiabulls Housing Finance, Bajaj Housing Finance, Muthoot Finance, Sanghvi Finance, and Cholamandalam Investment. In order to follow increased regulatory norms on investment and raising funds, Tata Sons Private, a core investment company, will have to be placed in the upper layer.

HDFC Ltd, although qualified to be in the upper layer, has been kept out of it deliberately because it is merging with The mentioned by the need to put in place a board approved policy for adoption of the enhanced regulatory framework applicable to NBFC-upper layer and chart out an implementation plan for adhering to the new set of regulations within three months, he said.

The board of NBFC will have to make certain that the stipulations for the upper layer are adhered to within a maximum time-period of 24 months.

Under RBI s scale-based regulations for NBFCs the companies have been categorised into four layers based on size, activity, and perceived riskiness base layer, middle layer, upper layer, and top layer.

The NBFCs that are specifically identified as warrant an enhanced regulatory requirement due to a set of parameters and scoring methodology. The RBI had said that the top ten eligible NBFCs, regardless of their asset size, will always reside in the upper layer.