The Reserve Bank of India’s latest FAQ on non-banking financial companies (NBFCs) may have further weakened Tata Trusts’ efforts to keep Tata Sons private by clarifying the rules behind the central bank’s decision to reject the holding company’s bid to waive its regulatory registration and avoid a stock market listing.
Tata Sons is registered with the RBI as a ‘core investment company’ (CIC), a category of holding company that primarily invests in its own group’s businesses. Large CICs, known as ‘top tier’ NBFCs, are required to list on a stock exchange. Tata Sons has asked the RBI to withdraw completely from this category, arguing that since the company has paid out more ₹The debt was 20,000 crores and it was now debt free and no longer needed to be regulated in that way. The RBI rejected this request last week, and a new FAQ explains why.
