RBI Governor Addresses Tatas on Listing Requirements for Upper Layer NBFCs, Clarifies September Order
Mumbai: Reserve Bank of India (RBI) Governor Sanjay Malhotra stated on Friday that Tata Sons must publicly list its shares as long as it remains classified as an upper-layer (UL) non-banking financial company (NBFC) and core investment company (CIC). This comment follows the RBI’s rejection of Tata Sons’ bid to shed its non-bank lender status. Malhotra’s remarks clarify the regulatory expectations for the Tata Group holding company.
The governor’s statement addresses a debate initiated by Noel Tata, chair of Tata Trusts, who argued that the RBI’s September 11 order did not explicitly require a listing. Malhotra indicated that Tata Sons may be in breach of RBI regulations, although the consequences of continued noncompliance are not yet clear. He refrained from commenting on Noel Tata’s proposal to merge two subsidiaries with the holding company, which could potentially allow it to avoid a stock market listing.
“NBFCs and CICs, like for example Tata Sons and others, are required to be registered with us because of the systemic risks,” Malhotra said. He emphasized that as long as Tata Sons is classified as an NBFC and has access to funds, it must comply with registration requirements. The RBI first classified Tata Sons as an UL-NBFC in 2022, mandating a public listing within three years. The holding company sought to avoid this by applying to surrender its CIC registration after eliminating its debt, but the RBI rejected this request.
CICs and Regulatory Requirements
RBI regulations require UL-NBFCs with assets exceeding Rs 1 lakh crore to list publicly. Tata Sons, with assets of Rs 2.01 lakh crore as of March 31, 2026, exceeds this threshold. Malhotra explained that CICs, which sit atop group companies, can leverage funds through them, thereby exposing money raised from banks and other sources to risk. Following the RBI’s letter, the Tata Sons board discussed the decision on September 17 and agreed to comply with the regulations, though no decision on listing was made.
Noel Tata, also a director of Tata Sons, has urged the company to explore alternatives to a market debut. He noted that the RBI’s communication did not explicitly mention the need for a listing and that the board had not formed a view on the legal implications of the RBI’s order or the required actions.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
Follow Us on Twitter, Instagram, Facebook, & LinkedIn
