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.
“NBFCs and CICs, like for example Tata Sons and others, are required to be registered with us because of the systemic risks,” Malhotra said.
“As long as it is an NBFC within our definition, it’s a CIC and has access to funds direct or indirect, it’s required to be registered and if it is in the upper layer, it is required to list,” he said at NDTV’s World Summit conference Friday.RBI first classified Tata Sons as an UL-NBFC in 2022 and required it to list within three years. The holding company sought to avoid a market debut by applying to surrender its CIC registration after reducing its debt to zero. But in Sept, the central bank rejected the request, saying it “cannot be acceded to”.
‘CICs sit atop group cos, can leverage funds through them’
RBI requires UL-NBFCs with assets exceeding Rs 1 lakh crore, or direct or indirect access to public funds, to list. With assets of Rs 2.01 lakh crore as of March 31, 2026, Tata Sons comfortably exceeds the threshold. Malhotra said CICs sit atop group companies and can leverage funds through them, exposing money raised from banks, corporate bonds and other sources to risk.Days after receiving the RBI letter, the Tata Sons board discussed the regulator’s decision at its Sept 17 meeting and agreed to comply with RBI regulations, but did not take a call on listing.Noel Tata, who is also a director of Tata Sons, has asked the company to explore alternatives to a market debut. He told the board: “It (the RBI’s communique) does not mention listing. It prescribes no particular step, and it does not say that the company is in breach.” He added that the board had formed no view on the legal effect of the RBI’s communication or what actions it required Tata Sons to take and by when.