Upper layer NBFCs have to list: RBI guv on Tatas; dispels doubts on Sept order
RBI Governor Sanjay Malhotra has reaffirmed that Tata Sons must list on the public stock exchange due to its classification as an upper-layer non-banking financial company. This statement clarifies the central bank's stance following Tata's attempt to deregister as a core investment company.
Why it matters
The regulatory pressure on a major conglomerate like Tata highlights the RBI's commitment to systemic risk management and transparency in the financial sector.
Mumbai: In his first public comment since Reserve Bank of India rejected Tata Sons’ bid to shed its non-bank lender status, governor Sanjay Malhotra on Friday left little doubt that the Tata Group holding company must list publicly as long as it remains classified as an upper-layer (UL) non-banking financial company (NBFC) and core investment company (CIC).The remarks appear to settle a debate sparked by Noel Tata, chair of Tata Trusts, Tata Sons’ largest shareholder, who had argued that RBI’s Sept 11 order, which rejected the holding company’s request to deregister as a CIC and directed it to comply with UL-NBFC regulations, did not explicitly mandate a listing.Malhotra’s comments also suggest Tata Sons is in breach of RBI rules.
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