Reserve Bank of India Governor defends Tata Sons' upper-layer NBFC status, mandates listing for large NBFCs

Key facts

• Reserve Bank of India (RBI) Governor Sanjay Malhotra defended the classification of Tata Sons as an upper-layer NBFC, stating that large NBFCs and core investment companies handling public funds or leveraging group balance sheets must register with the RBI and follow mandatory listing norms.
• RBI last month rejected Tata Sons' application to surrender its NBFC licence, making its public listing imminent; Tata Sons was placed in the upper layer in September 2022 and had applied to surrender its registration in March 2024 after repaying its debt.
• Malhotra reaffirmed the RBI's primary objective of maintaining price stability through inflation targeting while supporting long-term economic growth.
• Malhotra stated the average inflation projection stands at 5.1 per cent for the current year, with inflation within the RBI's tolerance band despite supply-side pressures from food and fuel.
• On the rupee, Malhotra said the RBI is not targeting any specific exchange-rate level but focuses on ensuring orderly conditions in the foreign exchange market and managing volatility.