The Reserve Bank of India (RBI) has released its latest list of Upper Layer Non-Banking Financial Companies (NBFC-UL), bringing four state-owned financial institutions under enhanced regulatory oversight. The updated list, announced on August 6, 2026, expands the number of NBFC-UL entities to 17, up from 15 in the previous list issued for FY25.
The central bank said the latest classification has been made under its Scale-Based Regulation (SBR) framework, which places systemically important non-bank lenders under stricter supervisory and regulatory requirements. The RBI did not issue a list for FY26 as it was reviewing the criteria used to identify Upper Layer NBFCs.
Four State-Owned Lenders Join the Upper Layer
The latest list includes four new public sector financial institutions:
| New NBFC-UL Entrants | Category |
|---|---|
| REC Limited | State-owned NBFC |
| Power Finance Corporation (PFC) | State-owned NBFC |
| Indian Railway Finance Corporation (IRFC) | State-owned NBFC |
| Housing and Urban Development Corporation (HUDCO) | State-owned NBFC |
With the inclusion of these four lenders, the RBI’s Upper Layer now consists of 17 entities that will remain subject to enhanced regulatory standards relating to capital adequacy, governance, disclosures and risk management.
Two Companies Removed From the Latest List
While four companies have been added, the RBI has removed PNB Housing Finance Ltd and Sammaan Capital Ltd from the latest Upper Layer list.
However, the central bank clarified that both companies will continue to be governed by the enhanced regulatory framework. Under RBI regulations, an NBFC classified in the Upper Layer remains subject to stricter supervisory norms for five years even if it subsequently no longer meets the eligibility criteria.
Key Changes in the Latest NBFC-UL List
| Category | Companies |
|---|---|
| New Entrants | REC Ltd, Power Finance Corporation Ltd, Indian Railway Finance Corporation Ltd, Housing and Urban Development Corporation Ltd |
| Removed | PNB Housing Finance Ltd, Sammaan Capital Ltd |
| Total NBFC-UL Entities | 17 (up from 15 in the FY25 list) |
RBI Continues Enhanced Oversight Framework
The Upper Layer forms an important part of the RBI’s Scale-Based Regulation framework, which identifies non-banking financial companies requiring closer regulatory supervision because of their size, interconnectedness and overall importance to the financial system. The updated list reflects the central bank’s ongoing assessment of institutions that warrant enhanced oversight.
Complete List of RBI Upper Layer NBFCs
The RBI’s latest Upper Layer list comprises the following 17 non-banking financial companies and core investment companies that will remain subject to enhanced regulatory supervision.
| S. No. | NBFC-UL Entity |
|---|---|
| 1 | REC Limited |
| 2 | Power Finance Corporation Limited (PFC) |
| 3 | Indian Railway Finance Corporation Limited (IRFC) |
| 4 | Bajaj Finance Limited |
| 5 | Shriram Finance Limited |
| 6 | LIC Housing Finance Limited |
| 7 | Cholamandalam Investment and Finance Company Limited |
| 8 | Tata Capital Limited |
| 9 | Tata Sons Private Limited |
| 10 | Muthoot Finance Limited |
| 11 | Aditya Birla Capital Limited |
| 12 | Housing and Urban Development Corporation Limited (HUDCO) |
| 13 | Mahindra & Mahindra Financial Services Limited |
| 14 | L&T Finance Limited |
| 15 | Bajaj Housing Finance Limited |
| 16 | HDB Financial Services Limited |
| 17 | Piramal Finance Limited |
RBI Clarifies Tata Sons’ Position
The RBI has retained Tata Sons Private Limited in the latest NBFC Upper Layer list while clarifying that its inclusion does not affect the Tata Group’s pending application seeking de-registration as an NBFC.
“Inclusion of Tata Sons Pvt Ltd in the list is without prejudice to the outcome of its application for de-registration, which is under examination,” the RBI said.
Tata Sons, the holding company of the approximately $400-billion Tata Group, was first classified as an Upper Layer NBFC in 2022. Following that classification, the company initiated a restructuring of its financial business interests and subsequently applied to surrender its NBFC registration. The RBI has not announced a timeline for deciding on the application.
What Is an NBFC Upper Layer?
The RBI’s Upper Layer consists of systemically important non-banking financial companies and core investment companies that require enhanced supervision because of factors such as their size, interconnectedness and business complexity.
Under the Scale-Based Regulation framework, NBFCs are classified into four supervisory categories:
| Regulatory Layer | Description |
|---|---|
| Base Layer | NBFCs with the least regulatory requirements. |
| Middle Layer | NBFCs subject to standard prudential regulation. |
| Upper Layer | Systemically important NBFCs requiring enhanced supervision. |
| Top Layer | A supervisory category reserved for NBFCs posing exceptional systemic risk. |
The RBI identifies entities for these categories based on factors including asset size, leverage, business complexity and systemic importance. According to the central bank, the Top Layer currently remains a largely unused supervisory bucket reserved for institutions that could pose exceptional risks to the financial system.
