The Reserve Bank of India has issued two draft amendment directions proposing changes to the Scale Based Regulatory (SBR) framework for non-banking financial companies (NBFCs), including a revised approach to identifying NBFCs in the Upper Layer (NBFC-UL), the inclusion of eligible government-owned NBFCs within NBFC-UL, and related adjustments. Under the current SBR framework, NBFC-UL identification uses a two-pronged method based on the top ten eligible NBFCs by asset size and a parametric scoring methodology. The draft amendments would replace this with a single asset-size criterion, proposed at INR 1,00,000 crore and above. They would also move towards an ownership-neutral approach by making eligible government-owned NBFCs subject to NBFC-UL inclusion under the revised criteria, and would permit all NBFC-UL to use State Government guarantees as a credit risk transfer instrument without any limit, subject to specified conditions. Feedback on the draft amendments to the NBFC registration and SBR directions and the concentration risk management directions is invited until May 04, 2026.
Reserve Bank of India 2026-04-10
Reserve Bank of India consults on INR 1,00,000 crore asset threshold and inclusion of government-owned NBFCs for Upper Layer classification
The Reserve Bank of India has issued draft amendments to the Scale Based Regulatory framework for non-banking financial companies, proposing a revised approach to identifying entities in the Upper Layer (NBFC-UL). The amendments would replace the current two-pronged identification method with a single asset-size criterion of INR 1,00,000 crore and above, extend NBFC-UL inclusion to eligible government-owned NBFCs on an ownership-neutral basis, and allow NBFC-UL to use State Government guarantees as a credit risk transfer instrument without limit, subject to conditions.