RBI releases list of 15 NBFCs in 'upper layer' under scale based regulations

The Reserve Bank of India on Thursday released a list of fifteen NBFCs figuring in the 'upper layer' under the scale based regulation for these lenders for the financial year 2024.

LIC Housing Finance Limited ranked first on the list, followed by Bajaj Finance Limited on second and Shriram Finance Limited (formerly Shriram Transport Finance Company Limited) on third.

TMF Business Services Limited (formerly Tata Motors Finance Limited) was not included in the list despite qualifying due to its ongoing business reorganisation.


The RBI in October 2021 announced to put in place a four-layered regulatory structure for non-banking financial companies (NBFCs) to keep a stricter vigil on the shadow banking sector and minimise risks for the overall financial system.

The detailed set of norms provides for a Scale Based Regulation (SBR) framework that takes into consideration capital requirements, governance standards, prudential regulation and other aspects of NBFCs.

The framework categorises NBFCs in Base Layer (NBFC-BL), Middle Layer (NBFC-ML), Upper Layer (NBFC-UL) and Top Layer (NBFC-TL).

The upper layer comprises those NBFCs, which are specifically identified by the Reserve Bank as warranting enhanced regulatory requirements based on a set of parameters.

The central bank's decision to put in place a scale-based framework comes against the backdrop of the collapse of IL&FS in 2018 and later DHFL, which had a spillover impact on the entire financial system, especially in terms of liquidity woes.