The Reserve Bank of India has announced the list of NBFCs in the upper layer under Scale Based Regulation for NBFCs for the year 2023-24. The RBI had issued the Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs (the framework) on October 22, 2021. The framework categorizes NBFCs in base layer (NBFC-BL), middle layer (NBFC-ML), upper layer (NBFC-UL), and top layer (NBFC-TL) and gives the methodology to identify the NBFCs in the upper layer as per their asset size and scoring methodology.
Accordingly, the 2023-24 list of NBFC-UL includes: LIC Housing Finance Limited Deposit-taking HFC, Bajaj Finance, Shriram Finance (formerly Shriram Transport Finance Company), Tata Sons, 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, Bajaj Housing Finance.
Despite qualifying for identification as NBFC-UL as per scoring methodology, TMF Business Services (formerly Tata Motors Finance) is not being included in the list of NBFC-UL in the current review due to its ongoing business reorganization.
In terms of the framework, once an NBFC is classified as NBFC-UL, it will be subject to enhanced regulatory requirements, at least for a period of five years from its classification in the layer, in case it does not meet the parametric criteria in the subsequent years.
