RBI Expands Upper Layer NBFC List to 17 for FY27; REC, PFC, IRFC and HUDCO Added

As part of its new listing of Upper Layer Non-Banking Financial Companies (NBFC-UL) for the year 2026-27, the Reserve Bank of India (RBI) now has 17 institutions compared to the earlier classification exercise where the list had only 15 firms. The most recent list comprises four newly added public sector companies, namely REC Ltd., Power Finance Corporation (PFC), Indian Railway Finance Corporation (IRFC) and Housing & Urban Development Corporation (HUDCO). The reclassification comes after the RBI had evaluated its system to classify large and systemically important NBFCs.

RBI Publishes Updated Upper Layer NBFC List

A total of 17 NBFCs will constitute the Upper Layer for financial year 2026-27.

The most notable thing about the latest classification is that the central bank had not published any Upper Layer NBFC list for 2025-26 due to a comprehensive review of the identification framework for such companies.

As a result, following the revision of the framework, the central bank has prepared the list for FY27 based on revised criteria.

The Upper Layer is a part of the scale-based regulation framework of the RBI, whereby NBFCs have been classified into different supervisory layers based on size and complexity.

New PSUs Join Upper Layer

Four state-owned companies have joined the Upper Layer list for the first time,

• REC Ltd.
• Power Finance Corporation (PFC)
• Indian Railway Finance Corporation (IRFC)
• Housing & Urban Development Corporation (HUDCO)

This is due to their increasing scale according to the revised eligibility framework.

Some other prominent NBFCs in the FY27 list include Bajaj Finance, Shriram Finance, LIC Housing Finance, and Tata Capital.

What Is the New AUM Criterion?

According to the new criteria, the NBFCs having an AUM of at least ₹1 trillion (₹1 lakh crore) will be eligible for Upper Layer classification provided they satisfy other conditions of identification.

It is necessary to ensure that large NBFCs having a greater financial importance in the system get enhanced regulatory supervision.

The Upper Layer is characterized by more stringent regulation and supervision as compared to lower layers of the scale-based approach.

Tata Sons Stays in Upper Layer

Tata Sons Pvt. Ltd. continues to be included in the list of Upper Layer by the RBI.

However, the regulator pointed out that it should be noted that its inclusion in the Upper Layer list does not affect the process of considering the company’s de-registration application. At the moment, the application for surrender of NBFC registration is being reviewed.

Thus, inclusion of Tata Sons in the list does not predetermine the result of the company’s application.

In the January 2025 update of the list, the same clarification was made by the regulator.

Why Are PNB Housing Finance and Sammaan Capital Not in the Updated List?

The companies PNB Housing Finance and Sammaan Capital are absent from the updated list since they do not satisfy the new criteria of eligibility.

However, it does not mean that they automatically go back to the previous framework.

According to the RBI regulations, the NBFC classified into the Upper Layer must continue to operate in the enhanced regulatory framework for at least five years after it ceases satisfying the relevant eligibility criterion.

What is Upper Layer of the NBFC Regulatory Framework?

Upper Layer is an integral component of RBI’s regulatory system for NBFCs based on the size of the firm.

The Upper Layer regulatory framework essentially divides NBFCs on the basis of their size and risk, and the Upper Layer is meant for NBFCs of larger sizes.

These NBFCs are required to comply with more stringent regulations under this framework.

The purpose of the Upper Layer regulatory framework is to minimize any risks that may occur due to larger NBFCs.