RBI to introduce new framework for NBFC classification, says guv Malhotra

RBI plans to introduce a new framework to classify NBFCs into upper, middle and lower layers, replacing the current scale-based regulation system

The Reserve Bank of India (RBI) is set to introduce a new framework for categorisation of non-banking financial companies (NBFCs) into upper, middle and lower layers, Governor Sanjay Malhotra said at the post-monetary policy press conference.

 

“We are coming up with a new framework for the NBFCs very soon. New framework for categorisation of NBFCs into upper, middle, lower,” said Malhotra.

 

Currently, NBFCs are classified under a scale-based regulation (SBR) framework, introduced in October 2021, which groups entities into four layers — base, middle, upper and top — based on their size, systemic importance and risk profile.

 

Under this framework, the RBI also periodically identifies NBFCs that fall into the upper layer (NBFC-UL) based on asset size and a scoring methodology. For 2024-25, the list includes large players such as Bajaj Finance, Shriram Finance, Tata Capital, Aditya Birla Finance and Mahindra & Mahindra Financial Services, among others.

 

 

The list also features housing finance companies such as LIC Housing Finance and PNB Housing Finance, as well as core investment entities like Tata Sons Private Limited, reflecting the diversity within the upper layer.

 

NBFCs are categorised based on liability structure — deposit-taking and non-deposit-taking — and by activity, including investment and credit companies, housing finance companies, microfinance institutions and others.

 

The RBI, as of February 2026, also proposed exempting small non-banking financial companies with no public funds, no customer interface, and assets under ₹1,000 crore from registration. Eligible NBFCs can apply for voluntary deregistration via the PRAVAAH portal by September 30, 2026, to reduce regulatory compliance.