17 NBFCs identified in Upper Layer for 2026-27; Tata Sons remains on list amid deregistration review

The Reserve Bank of India (RBI) on Thursday released the list of 17 Non-Banking Financial Companies (NBFCs) classified under the Upper Layer (NBFC-UL) for 2026-27 under its Scale Based Regulation (SBR) framework. The classification, based on financials as of March 31, 2026, subjects these entities to tighter regulatory oversight owing to their size, interconnectedness and potential systemic importance.

The latest list includes major infrastructure financiers, housing finance companies and retail lending giants such as REC Ltd, Power Finance Corporation (PFC), Indian Railway Finance Corporation (IRFC), Bajaj Finance, Shriram Finance, LIC Housing Finance, Tata Capital, Muthoot Finance, Aditya Birla Capital, HDB Financial Services and Piramal Finance. Notably, Tata Sons Pvt Ltd continues to feature in the Upper Layer as a Core Investment Company. However, the RBI clarified that its inclusion is "without prejudice" to the outcome of the company's application for deregistration, which is currently under examination.

Revised framework after one-year gap

The central bank did not publish an NBFC-UL list for 2025-26 as it had undertaken a review of the criteria used to identify Upper Layer entities under the Scale Based Regulation framework. The revised norms have now been applied to prepare the 2026-27 list.

Introduced in 2021 and subsequently incorporated into the RBI's 2026 regulatory directions, the Scale Based Regulation framework classifies NBFCs into four layers—Base Layer (BL), Middle Layer (ML), Upper Layer (UL) and Top Layer (TL). While most NBFCs fall in the Base and Middle layers, those considered systemically significant are moved to the Upper Layer, where they face stricter prudential, governance and supervisory requirements.

Enhanced oversight for five years

The RBI said once an NBFC is designated as an Upper Layer entity, it will continue to remain under the enhanced regulatory regime for a minimum of five years, even if it no longer satisfies the qualifying criteria in subsequent assessments. Accordingly, PNB Housing Finance and Sammaan Capital, which no longer meet the revised criteria, will continue to remain in the Upper Layer because they had been classified under the 2024-25 list.

Full list of NBFCs in the Upper Layer

The 17 NBFCs identified for 2026-27 are:

• REC Limited

• Power Finance Corporation Limited

• Indian Railway Finance Corporation Limited

• Bajaj Finance Limited

• Shriram Finance Limited

• LIC Housing Finance Limited

• Cholamandalam Investment and Finance Company Limited

• Tata Capital Limited

• Tata Sons Private Limited

• Muthoot Finance Limited

• Aditya Birla Capital Limited

• Housing and Urban Development Corporation (HUDCO)

• Mahindra & Mahindra Financial Services Limited

• L&T Finance Limited

• Bajaj Housing Finance Limited

• HDB Financial Services Limited

• Piramal Finance Limited

Why the classification matters

NBFCs placed in the Upper Layer are considered critical to India's financial system because of their asset size, complexity and interconnectedness with banks and capital markets. These companies are required to comply with more stringent capital, governance, disclosure and risk-management norms than other NBFCs.

The RBI's layered regulatory approach is aimed at ensuring that larger non-bank lenders maintain stronger financial resilience while reducing systemic risks to the broader financial sector.