The Reserve Bank of India (RBI) on April 10, 2026, issued draft amendment directions to review the methodology for identification of Non-Banking Financial Companies in the Upper Layer (NBFC-UL) and to include Government-owned NBFCs within this category. Public comments have been invited from stakeholders till May 4, 2026.
The draft proposes replacing the existing dual methodology (top 10 by asset size and scoring model) with a simplified asset size-based criterion, wherein NBFCs with assets of ₹1,00,000 crore and above would qualify as NBFC-UL. Additionally, in line with a neutral regulatory approach, eligible Government-owned NBFCs may also be included in the Upper Layer classification based on this revised threshold.
Further, the draft allows NBFC-UL entities to use State Government guarantees as a credit risk transfer instrument without any limit, subject to prescribed conditions. These proposals aim to enhance transparency, simplify classification, and strengthen the Scale-Based Regulatory framework for NBFCs.
[Notification No. 2026-2027/65]
