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Upper layer NBFCs have to list: RBI guv on Tatas; dispels doubts on Sept order

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Upper layer NBFCs have to list: RBI guv on Tatas; dispels doubts on Sept order

Upper layer NBFCs have to list: RBI governor on Tatas; dispels doubts on Sept order

RBI governor Sanjay Malhotra’s comments also suggest Tata Sons is in breach of RBI rules. The consequences of continued noncompliance remain unclear. The governor declined to be drawn into the question of Noel Tata’s proposal to merge two Tata Sons subsidiaries with the holding company, a move that could help it sidestep a stock market listing.

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. The consequences of continued noncompliance remain unclear. The governor declined to be drawn into the question of Noel Tata’s proposal to merge two Tata Sons subsidiaries with the holding company, a move that could help it sidestep a stock market listing. “NBFCs and CICs, like for example Tata Sons and others, are required to be registered with us because of the systemic risks,” Malhotra said.


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