CLASSIFICATION OF NBFCs

CLASSIFICATION OF NBFCs.

Previously, NBFCs were classified into two categories: systemically important and non-systemically important. However, starting from October 2022, the RBI introduced a new classification system based on layers:  base, middle, upper and top. All existing types of NBFCs will be defined within these four layers:

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Base Layer

  • Non-deposit-taking NBFCs below the asset size of ₹1000 crore.

Middle Layer

  • All deposit-taking NBFCs (NBFC-Ds), irrespective of the asset size
  • Non-deposit taking NBFCs with asset size of ₹1000 crore and above.

Upper Layer

  • The upper layer includes NBFCs specifically identified by the RBI as warranting enhanced regulatory requirements based on a set of parameters and scoring methodology.

Top Layer

  • The Reserve Bank of India has released a list of fifteen NBFCs that fall under the “upper layer” in the scale-based regulation for the financial year 2024.