{"id":88920,"date":"2025-04-23T14:35:59","date_gmt":"2025-04-23T09:05:59","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=88920"},"modified":"2025-04-23T14:36:15","modified_gmt":"2025-04-23T09:06:15","slug":"rbi-nbfc-upper-layer-list-fy-2024-25","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/rbi-nbfc-upper-layer-list-fy-2024-25\/","title":{"rendered":"RBI\u2019s NBFC Upper Layer List for FY 2024-25"},"content":{"rendered":"<p>On January 16, 2025, the Reserve Bank of India (RBI) released the list of Non-Banking Financial Companies (NBFCs) granted status under the aegis of the &ldquo;Upper Layer&rdquo; (<a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;NBFC&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Non-Banking Financial Companies (NBFC) operate similarly to banks but do not possess the legal status of a bank. Registered under the Companies Act 2013 and governed by the RBI Act&amp;#039;s section(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/nbfc\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>NBFC<\/a>-UL) for the financial year 2024&ndash;25 following the Scale-Based Regulations (SBR) framework. The total number of NBFCs brought under this category is 15, which suggests that these NBFCs are quite prominent in the Indian financial ecosystem with respect to either size, complexity, or systemic significance.<\/p>\n\n\n\n<p>The framework, which came into effect on October 22, 2021, provides an organized manner for undertaking enhanced regulatory supervision. These initiatives form a structured RBI effort to enhance regulatory oversight and promote resiliency in the NBFC space. &nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is the Scale-Based Regulations Framework?<\/h2>\n\n\n\n<p>The Scale-Based Regulation (SBR) framework was introduced by the RBI on October 22, 2021, to apply regulation in a proportionate and risk-sensitive manner to NBFCs. It divided NBFCs into four distinct layers depending on their size, activities, and systemic importance.<\/p>\n\n\n\n<p><strong>1. Base Layer (NBFC-BL)<\/strong><\/p>\n\n\n\n<ul>\n<li>This constitutes non-deposit-taking NBFCs that have an asset size of less than &#8377;1000 crore.<\/li>\n\n\n\n<li>This includes NBFC-Peer-to-Peer (P2P) and NBFC-Account Aggregators.<\/li>\n\n\n\n<li>Thus, it is considered the least systemic risk and subject to lighter regulation.<\/li>\n<\/ul>\n\n\n\n<p><strong>2. Middle Layer (NBFC-ML)<\/strong><\/p>\n\n\n\n<ul>\n<li>Includes deposit NBFCS irrespective of the asset size.<\/li>\n\n\n\n<li>It includes non-deposit taking NBFCS with an asset size of at least &#8377;1000 crores.<\/li>\n\n\n\n<li>Other such entities include standalone primary dealers and infrastructure debt fund NBFCs, which have also been placed in this layer.<\/li>\n\n\n\n<li>This group, as opposed to the base layer, is subjected to relatively more stringent regulations on account of relatively higher risk exposure.<\/li>\n<\/ul>\n\n\n\n<p><strong>3. Upper Layer (NBFC-UL)<\/strong><\/p>\n\n\n\n<ul>\n<li>Includes the NBFCs identified by the RBI using a scoring methodology, which would be based on a mix of quantitative and qualitative parameters.<\/li>\n\n\n\n<li>The entry of the top ten NBFCs by asset size will be automatic.<\/li>\n\n\n\n<li>These NBFCs are expected to have a systemic impact and are, therefore, subject to enhanced regulatory requirements.<\/li>\n<\/ul>\n\n\n\n<p><strong>4. Top Layer (NBFC-TL)<\/strong><\/p>\n\n\n\n<ul>\n<li>Better be empty; supposed to remain empty.<\/li>\n\n\n\n<li>Aimed at NBFCs in the upper layer that pose a significant increase in systemic risk.<\/li>\n\n\n\n<li>Placement into this layer is solely at the discretion of the RBI and is therefore considered only under exceptional circumstances.<\/li>\n<\/ul>\n\n\n\n<p>The SBR framework has been designed with the following objectives:<\/p>\n\n\n\n<ul>\n<li>To employ the principle of proportionality in regulation,<\/li>\n\n\n\n<li>To drive up governance and risk management standards,<\/li>\n\n\n\n<li>To mitigate systemic risks and contagion in the financial system and<\/li>\n\n\n\n<li>To reinforce supervisory oversight over larger and more complex NBFCs.<\/li>\n<\/ul>\n\n\n\n<p>With the rapid growth of the NBFC sector and furthering its interlinkages with the general financial system, the SBR becomes relevant.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">List of 15 NBFCs in the Upper Layer (2024&ndash;25)<\/h2>\n\n\n\n<p>The following companies have been selected for the NBFC-UL category for the 2024&ndash;25 cycle:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><td><strong>S. No.<\/strong><\/td><td><strong>Name of the NBFC<\/strong><\/td><td><strong>Category<\/strong><\/td><\/tr><\/thead><tbody><tr><td>1<\/td><td>LIC Housing Finance Limited<\/td><td>Deposit-taking HFC<\/td><\/tr><tr><td>2<\/td><td>Bajaj Finance Limited<\/td><td>Deposit-taking NBFC-ICC<\/td><\/tr><tr><td>3<\/td><td>Shriram Finance Limited<\/td><td>Deposit-taking NBFC-ICC<\/td><\/tr><tr><td>4<\/td><td>Tata Sons Private Limited<\/td><td>Core Investment Company<\/td><\/tr><tr><td>5<\/td><td>Cholamandalam Investment and Finance Company Ltd.<\/td><td>Non-deposit taking NBFC-ICC<\/td><\/tr><tr><td>6<\/td><td>L&amp;T Finance Limited<\/td><td>Non-deposit taking NBFC-ICC<\/td><\/tr><tr><td>7<\/td><td>Mahindra &amp; Mahindra Financial Services Ltd.<\/td><td>Deposit-taking NBFC-ICC<\/td><\/tr><tr><td>8<\/td><td>Aditya Birla Finance Limited<\/td><td>Non-deposit taking NBFC-ICC<\/td><\/tr><tr><td>9<\/td><td>Tata Capital Limited<\/td><td>Non-deposit taking NBFC-ICC<\/td><\/tr><tr><td>10<\/td><td>Piramal Capital &amp; Housing Finance Ltd.<\/td><td>Non-deposit taking HFC<\/td><\/tr><tr><td>11<\/td><td>PNB Housing Finance Limited<\/td><td>Deposit-taking HFC<\/td><\/tr><tr><td>12<\/td><td>HDB Financial Services Limited<\/td><td>Non-deposit taking NBFC-ICC<\/td><\/tr><tr><td>13<\/td><td>Sammaan Capital Limited (formerly Indiabulls Housing Finance Ltd.)<\/td><td>Non-deposit taking NBFC-ICC<\/td><\/tr><tr><td>14<\/td><td>Muthoot Finance Limited<\/td><td>Non-deposit taking NBFC-ICC<\/td><\/tr><tr><td>15<\/td><td>Bajaj Housing Finance Limited<\/td><td>Non-deposit taking HFC<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>These entities have been identified either due to their large asset base or due to scoring high on parameters set out by the RBI.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Regulatory Implications for NBFCs in the Upper Layer<\/h2>\n\n\n\n<p>The NBFCs in the upper layer have attendant enhanced regulatory requirements. These requirements include, but are not limited to:<\/p>\n\n\n\n<ul>\n<li>Corporate governance standards are more exacting.<\/li>\n\n\n\n<li>Higher expectations for risk management and internal control.<\/li>\n\n\n\n<li>Strict compliance with prudential norms, disclosure norms, and auditing requirements.<\/li>\n\n\n\n<li>Group structure, related party transactions, and exposure norms are to be monitored.<\/li>\n<\/ul>\n\n\n\n<p>Importantly, an NBFC that receives Upper Layer designation must abide by these enhanced requirements for a period of five years, even when it fails to meet the selection criteria down the road.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Special Considerations and Clarifications<\/h2>\n\n\n\n<ul>\n<li>Tata Sons Private Limited is included as a Core Investment Company (CIC); however, this is subject to the outcome of its pending de-registration application, which is under examination by the RBI.<\/li>\n\n\n\n<li>Piramal Enterprises Limited&rsquo;s exclusion is due to the restructuring of the business group, although it qualifies under the scoring methodology.<\/li>\n\n\n\n<li>Sammaan Capital Limited, formerly Indiabulls Housing Finance, is included in the list under its new name.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">To Wrap Up<\/h2>\n\n\n\n<p>The Upper Layer classification for these 15 NBFCs by the RBI signifies its aim to proactively supervise and regulate large NBFCs, which are a potential risk to the financial system. In this manner, the RBI further provides a strong underpinning for the resilience of the financial sector and promotes risk governance among the largest players in the non-banking space.<\/p>\n\n\n\n<p>The SBR framework is reflective of RBI&rsquo;s supervisory approach, looking ahead, and it serves as a clear message that, along with size and complexity, comes great responsibility and scrutiny.<\/p>\n\n\n\n<p>To get expert assistance in <a href=\"https:\/\/enterslice.com\/nbfc-registration\">NBFC registration<\/a> and compliance management, visit <a href=\"https:\/\/enterslice.com\/\">https:\/\/enterslice.com\/<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h3>What exactly is the Upper Layer (NBFC-UL) under the RBI's regulation framework?<\/h3><p class=\"saswp-faq-answer-text\">The Upper Layer is one of the categories envisaged under RBI's Scale-Based Regulation (SBR) for NBFCs. It includes those NBFCs that are relatively large and carry the highest ratings. These companies undergo continuous regulatory vigilance, are expected to comply with enhanced regulations for a minimum period of five years, which in turn is instrumental in reducing the risks to the financial system.<\/p><\/li><li style=\"list-style-type: none\"><h3>Why did the Upper Layer classification take place by RBI?<\/h3><p class=\"saswp-faq-answer-text\">The classification of NBFCs in the upper layer by the RBI is to ensure that companies that have a major impact on the economy must comply with more stringent regulations. These NBFCs are large or complex enough that if something were to happen to them, they could shake the economy. Therefore, they deserve acute surveillance by the regulators.<\/p><\/li><li style=\"list-style-type: none\"><h3>How does the RBI decide which NBFCs to put into the Upper Layer?<\/h3><p class=\"saswp-faq-answer-text\">NBFCs are inducted in the upper layer based on size and a scoring mechanism. The top ten largest NBFCs by asset size are always in the upper layer. Other NBFCs may be inducted if they meet certain risk-based parameters, whereas certain subjective factors may also be used by the RBI in conjunction with quantitative measures.<\/p><\/li><li style=\"list-style-type: none\"><h3>What happens after an NBFC enters the Upper Layer?<\/h3><p class=\"saswp-faq-answer-text\">Once an NBFC enters the Upper Layer, it is subject to enhanced regulations for a minimum period of five years. These regulations include enhanced governance, disclosures, and risk management. Even if it diminishes subsequently, this classification continues to apply for five years.<\/p><\/li><li style=\"list-style-type: none\"><h3>What is the purpose of the Scale-Based Regulation (SBR) framework?<\/h3><p class=\"saswp-faq-answer-text\">The SBR framework serves to allow the RBI to regulate non-banking financial companies (NBFCs) based on their size, activities, and risk. It promotes the reduction of risks arising out of major financial failures, promotes good management of financial companies, and provides more stringent regulations on larger NBFCs than on smaller ones.<\/p><\/li><li style=\"list-style-type: none\"><h3>How many layers does the SBR Framework have?<\/h3><p class=\"saswp-faq-answer-text\">The levels of the SBR Framework are divided into four layers: Base Layer, Middle Layer, Upper Layer, and Top Layer. Each layer indicates the level of regulatory supervision, such that the bigger or riskier the company, the higher it is in the layers of regulation. The Top Layer is for the very high-risk cases, but mostly stays unoccupied.<\/p><\/li><li style=\"list-style-type: none\"><h3>What is the difference between NBFCs and banks?<\/h3><p class=\"saswp-faq-answer-text\">NBFCs give loans and help with financing, but they are neither banks. They cannot accept demand deposits (like savings or current accounts), they cannot issue cheques, and they are not part of the payment and settlement system. Also, unlike banks, deposits with NBFCs are not insured.<\/p><\/li><li style=\"list-style-type: none\"><h3>Are all deposit-taking NBFCs in the Upper Layer?<\/h3><p class=\"saswp-faq-answer-text\">No, not all deposit-taking NBFCs are in the Upper Layer, but quite a number of them are. Some deposit-accepting NBFCs like LIC Housing Finance and PNB Housing Finance are in the Upper Layer by virtue of their size and risk profile. Smaller deposit-taking NBFCs may fall into the Middle Layer instead, if they do not meet the Upper Layer criteria.<\/p><\/li><li style=\"list-style-type: none\"><h3>What happens if an Upper Layer NBFC fails to follow the laid-down rules?<\/h3><p class=\"saswp-faq-answer-text\">On regulatory infringement by the Upper Layer NBFC, the RBI may impose penalties, issue directions, or consider other supervisory actions. In addition, the RBI may curtail its operations or construction under certain prescribed actions for the larger interest of the financial system.<\/p><\/li><li style=\"list-style-type: none\"><h3>How frequently does the RBI update the Upper Layer list?<\/h3><p class=\"saswp-faq-answer-text\">The list of NBFCs in the Upper Layer is reviewed and updated once in every financial year by the RBI to ensure that such a list considers the current size, risks, and business activities of NBFCs. During this review, any structural or structural change in the status of a company is also taken into account.<\/p><\/li><\/ol><\/div>","protected":false},"excerpt":{"rendered":"<p>On January 16, 2025, the Reserve Bank of India (RBI) released the list of Non-Banking Financial Companies (NBFCs) granted status under the aegis of the &ldquo;Upper Layer&rdquo; (<a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;NBFC&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Non-Banking Financial Companies (NBFC) operate similarly to banks but do not possess the legal status of a bank. Registered under the Companies Act 2013 and governed by the RBI Act&amp;#039;s section(...)&lt;\/div&gt;\" href=\"https:\/\/enterslice.com\/learning\/terms\/nbfc\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>NBFC<\/a>-UL) for the financial year 2024&ndash;25 following the Scale-Based Regulations (SBR) framework. The total number of NBFCs brought under this category is 15, which suggests that these NBFCs [&hellip;]<\/p>\n","protected":false},"author":61,"featured_media":88921,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[6,2620],"tags":[],"acf":{"service_id":"994"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>RBI Classifies 15 NBFCs in Upper Layer for 2024\u201325<\/title>\n<meta name=\"description\" content=\"Explore the RBI&#039;s NBFC Upper Layer list for FY 2024-25 under the Scale-Based Regulation (SBR) framework. Discover the 15 major NBFCs recognized for their size, complexity, and systemic importance.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/rbi-nbfc-upper-layer-list-fy-2024-25\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RBI Classifies 15 NBFCs in Upper Layer for 2024\u201325\" \/>\n<meta property=\"og:description\" content=\"Explore the RBI&#039;s NBFC Upper Layer list for FY 2024-25 under the Scale-Based Regulation (SBR) framework. Discover the 15 major NBFCs recognized for their size, complexity, and systemic importance.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/rbi-nbfc-upper-layer-list-fy-2024-25\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2025-04-23T09:05:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-04-23T09:06:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2025\/04\/RBIs-NBFC-Upper-Layer-List-for-FY-2024-25.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1218\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Monisha Chaudhary","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2022\/04\/Monisha-Chaudhary-150x150-1.jpg","authorDescription":"Monisha Chaudhary is a distinguished partner at Enterslice with 10+ years of relevant industry experience in company incorporation, fintech, regulatory compliance, insurtech consulting, and M&amp;A. Her creative thought process pushes her to draft excellent writeups. Besides effortlessly tackling business challenges, she invests her free time in writing blogs and articles.","postViews":486,"readingTime":5,"nextPost":{"id":88940,"slug":"obtain-a-fsp-license-in-new-zealand"},"prevPost":{"id":88914,"slug":"15-benefits-of-registering-company-in-cayman-islands"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2025\/04\/RBIs-NBFC-Upper-Layer-List-for-FY-2024-25.jpg","postTerms":"NBFC","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/88920"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=88920"}],"version-history":[{"count":7,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/88920\/revisions"}],"predecessor-version":[{"id":88928,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/88920\/revisions\/88928"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/88921"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=88920"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=88920"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=88920"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}