Draft NBFC-UL Amendment Directions - Asset Size Criteria and Government NBFC Inclusion
Summary
The Reserve Bank of India has issued two draft Amendment Directions for public consultation until May 4, 2026, proposing to replace the existing NBFC-UL identification methodology with an absolute asset size criterion of ₹1,00,000 crore and above. The draft directions also propose including eligible Government owned NBFCs in the Upper Layer and allow all NBFC-UL to use State Government guarantees as credit risk transfer instruments without limit, subject to specified conditions.
What changed
The RBI proposes replacing the current two-pronged NBFC-UL identification methodology (top ten by asset size plus parametric scoring) with a single absolute asset size criterion of ₹1,00,000 crore and above. Government owned NBFCs currently restricted to Base or Middle Layer would become eligible for Upper Layer classification under the revised criteria. All NBFC-UL would also gain ability to use State Government guarantees as unlimited credit risk transfer instruments.
NBFCs with assets near the ₹1,00,000 crore threshold should monitor this consultation closely as reclassification could trigger heightened regulatory requirements. Existing NBFC-UL and those approaching the new threshold should review the draft directions and provide feedback on the proposed changes to identification methodology and Government NBFC inclusion criteria.
What to do next
- Review draft Amendment Directions and assess impact on NBFC classification
- Submit comments via RBI Connect 2 Regulate portal or email by May 4, 2026
Archived snapshot
Apr 11, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Press Releases
| () | |
| Date : Apr 10, 2026 | |
| RBI invites public comments on the draft Amendment Directions on review of methodology for identification of NBFC-UL and inclusion of Government owned NBFCs in NBFC-UL | |
| | The Reserve Bank has issued today the following draft Amendment Directions relating to review of methodology for identification of NBFCs in Upper Layer (NBFC-UL), inclusion of Government owned NBFCs as NBFC-UL and other related aspects.
1. The draft ‘ [Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Second Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4978) ’; and
2. The draft ‘ [Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Third Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4977) ’
- The feedback / comments on the draft Amendment Directions are invited from the NBFCs, members of public and all other relevant stakeholders till May 04, 2026. The feedback / comments may be submitted through the link under the ‘ Connect 2 Regulate ’ Section available on RBI’s website or may alternatively be forwarded to:
Chief General Manager - in - Charge
Department of Regulation (SIG-NBFCs)
Reserve Bank of India
12th Floor, Central Office Building
Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001
Or
by email
With the subject line ‘Feedback on the draft Amendment Directions on review of methodology for identification of NBFC-UL and inclusion of Government NBFCs in NBFC-UL’.
Background and Objective
The Scale Based Regulatory (SBR) Framework for NBFCs prescribes a two-pronged methodology for identification of NBFC-UL viz., top ten eligible NBFCs by asset size and parametric scoring methodology. With a view to adopt a transparent, simple and absolute criteria for identification of NBFC-UL, it is proposed to replace the existing methodology with asset size criteria, which is currently proposed as ₹1,00,000 crore and above. Further, the SBR Framework currently places Government owned NBFCs in the Base Layer or Middle Layer and not in the Upper Layer. In pursuance of the principle of ownership neutral regulatory regime for NBFCs, it is now proposed to consider eligible Government owned NBFCs also for inclusion in the list of NBFC-UL based on the revised criteria. Additionally, it is proposed to allow all NBFC-UL to use State Government guarantees as credit risk transfer instrument without any limit subject to the specified conditions.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/65 | | The Reserve Bank has issued today the following draft Amendment Directions relating to review of methodology for identification of NBFCs in Upper Layer (NBFC-UL), inclusion of Government owned NBFCs as NBFC-UL and other related aspects.
- The draft ‘ Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Second Amendment Directions, 2026 ’; and
- The draft ‘ Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Third Amendment Directions, 2026 ’
- The feedback / comments on the draft Amendment Directions are invited from the NBFCs, members of public and all other relevant stakeholders till May 04, 2026. The feedback / comments may be submitted through the link under the ‘ Connect 2 Regulate ’ Section available on RBI’s website or may alternatively be forwarded to:
Chief General Manager - in - Charge
Department of Regulation (SIG-NBFCs)
Reserve Bank of India
12th Floor, Central Office Building
Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001
Or
by email
With the subject line ‘Feedback on the draft Amendment Directions on review of methodology for identification of NBFC-UL and inclusion of Government NBFCs in NBFC-UL’.
Background and Objective
The Scale Based Regulatory (SBR) Framework for NBFCs prescribes a two-pronged methodology for identification of NBFC-UL viz., top ten eligible NBFCs by asset size and parametric scoring methodology. With a view to adopt a transparent, simple and absolute criteria for identification of NBFC-UL, it is proposed to replace the existing methodology with asset size criteria, which is currently proposed as ₹1,00,000 crore and above. Further, the SBR Framework currently places Government owned NBFCs in the Base Layer or Middle Layer and not in the Upper Layer. In pursuance of the principle of ownership neutral regulatory regime for NBFCs, it is now proposed to consider eligible Government owned NBFCs also for inclusion in the list of NBFC-UL based on the revised criteria. Additionally, it is proposed to allow all NBFC-UL to use State Government guarantees as credit risk transfer instrument without any limit subject to the specified conditions.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/65 |
| The Reserve Bank has issued today the following draft Amendment Directions relating to review of methodology for identification of NBFCs in Upper Layer (NBFC-UL), inclusion of Government owned NBFCs as NBFC-UL and other related aspects.
- The draft ‘ Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Second Amendment Directions, 2026 ’; and
- The draft ‘ Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Third Amendment Directions, 2026 ’
- The feedback / comments on the draft Amendment Directions are invited from the NBFCs, members of public and all other relevant stakeholders till May 04, 2026. The feedback / comments may be submitted through the link under the ‘ Connect 2 Regulate ’ Section available on RBI’s website or may alternatively be forwarded to:
Chief General Manager - in - Charge
Department of Regulation (SIG-NBFCs)
Reserve Bank of India
12th Floor, Central Office Building
Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001
Or
by email
With the subject line ‘Feedback on the draft Amendment Directions on review of methodology for identification of NBFC-UL and inclusion of Government NBFCs in NBFC-UL’.
Background and Objective
The Scale Based Regulatory (SBR) Framework for NBFCs prescribes a two-pronged methodology for identification of NBFC-UL viz., top ten eligible NBFCs by asset size and parametric scoring methodology. With a view to adopt a transparent, simple and absolute criteria for identification of NBFC-UL, it is proposed to replace the existing methodology with asset size criteria, which is currently proposed as ₹1,00,000 crore and above. Further, the SBR Framework currently places Government owned NBFCs in the Base Layer or Middle Layer and not in the Upper Layer. In pursuance of the principle of ownership neutral regulatory regime for NBFCs, it is now proposed to consider eligible Government owned NBFCs also for inclusion in the list of NBFC-UL based on the revised criteria. Additionally, it is proposed to allow all NBFC-UL to use State Government guarantees as credit risk transfer instrument without any limit subject to the specified conditions.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/65 | |
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