Upper-Layer NBFCs and CICs Must List, Says RBI Governor Malhotra

In his first public comments since the RBI rejected Tata Sons' bid to shed its CIC status, Governor Sanjay Malhotra said NBFCs and CICs with access to public funds must register — and upper-layer ones must list on stock exchanges.

Awaaz Punjab Investigations Desk24 October 20263 min readRead in all 3 languages

New Delhi — Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that non-banking financial companies (NBFCs) and core investment companies (CICs) that have access to public funds, directly or indirectly, are required to be registered with the central bank, and those classified in the upper layer are required to list on stock exchanges. He made the remarks at the NDTV World Summit in New Delhi, in his first public comments since the RBI rejected Tata Sons' application to surrender its CIC registration.

Source: Times of India via AllPress

"We do not answer questions relating to any specific regulated entity," Malhotra said, according to reports of the summit. "But let me mention to you that NBFCs and CICs, like for example Tata Sons and others, they are required to be registered with us because of the systemic risks, because they sit on top of group companies where they leverage funds." Asked about upper-layer rules, he added: "As long as it is an NBFC within our definition, it is a CIC, it has access to funds, direct or indirect, it is required to be registered, and if it is in the upper layer, then it is required to list."

Source: IND News Express

The RBI first classified Tata Sons, the holding company of the Tata group, as an upper-layer NBFC in 2022 and required it to list within three years. The company instead repaid its outstanding debt and applied to surrender its CIC registration. In an order dated September 11, the central bank rejected that request, saying it "cannot be acceded to", and directed Tata Sons to comply with upper-layer NBFC requirements, according to the reports.

Malhotra said only a CIC that does not have access, directly or indirectly, to public funds is allowed not to be registered. He declined to comment on a proposal attributed to Tata Trusts chair Noel Tata to merge two Tata Sons subsidiaries with the holding company, a move reports say could change whether it meets the NBFC/CIC definition. The Governor's remarks leave the listing question with Tata Sons' board and the regulator's stated framework, with no new deadline announced at the summit.

Source: Unique Times

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