The asset size criteria makes it simpler, more transparent and absolute, to make it predictable for NBFCs for enabling better transition to NBFC-UL regulations, RBI said
The Reserve Bank of India (RBI) has finalised ₹1 lakh crore and above as the asset size criteria for classifying a Non-Banking Financial Company (NBFC) in the Upper Layer (UL). So, these NBFCs will be subject to enhanced regulatory requirement.The aforementioned asset size criteria remains unchanged from the draft directions.Going by the asset size criteria, Tata Sons, which was to get listed by September 2025 per the regulatory criteria that requires NBFCs in the UL category to get listed within three years of them being identified as one, may have to get listed. It has a standalone asset size of about ₹1.75 lakh crore.The central bank said asset size is a reasonably good proxy for systemic significance for NBFCs, per Amendment Directions on ‘review of methodology for identification of NBFC-UL and inclusion of Government owned NBFCs in NBFC-UL’ and ‘Credit/Investment Concentration Norms – Government owned NBFCs’The asset size for identifying NBFC-UL shall be as evidenced in the audited balance sheet of the company on standalone basis, The asset size for identifying NBFC-UL shall be as evidenced in the audited balance sheet of the company on standalone basisThe asset size criteria makes it simpler, more transparent and absolute, to make it predictable for NBFCs for enabling better transition to NBFC-UL regulations, RBI said.In view of the growth trend of the sector, the periodicity for review of the asset size threshold has been reduced from five years to three years, it added.RBI said the provisions of the Amendment Directions are applicable to the NBFCs which are Group entities of Scheduled Commercial Banks, irrespective of their layer-wise classification as per the provisions of these Directions.Govt-owned NBFCA Government owned NBFC will be guided by the concentration norms and limits applicable to it based on the layer in which it is classified, according to the RBI amendment directions.Consequently, the exemptions from concentration norms granted to Government owned NBFCs shall stand withdrawn.Government owned NBFC exposures offset by State Government guarantees shall be recognised as an exposure to the guaranteeing State Government. Such exposures shall be exempted from prudential exposure limit.However, since the credit risk transfer instrument in this case would be a State Government guarantee, a risk weight of 20 per cent shall apply to such offset exposures.Published on June 24, 2026
