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RBI Eyes New NBFC Giants: Big Banks' Firms Face Scrutiny
12 Jan
Summary
- RBI likely to update NBFC upper layer list by mid-2026.
- Large bank-backed NBFCs with AUM over ₹40,000 crore may be added.
- Updated list aims to address systemic risks and maintain financial stability.
The Reserve Bank of India is anticipated to publish its updated list of upper layer non-banking financial companies (NBFCs) by mid-2026. Sources indicate that large NBFCs strongly backed by major banks and robust promoters are likely candidates for inclusion. This strategic reclassification aims to bolster financial stability.
NBFCs such as Credila Financial Services, Axis Finance, and Kotak Mahindra Prime, all affiliated with prominent banks, are being considered. Many of these entities boast assets under management upwards of ₹40,000 crore as of September-end. The RBI's Scale-Based Regulatory Framework classifies NBFCs into four tiers, with the upper layer attracting heightened regulatory oversight.
This periodic review of NBFC classifications is crucial for managing potential systemic risks. Experts suggest that a close evaluation will be given to NBFCs with substantial balance sheets, diversified funding, and significant retail or MSME credit exposure, especially in light of evolving digital lending models.
