New Delhi, June 25 -- On 24 June 2026, the Reserve Bank of India (RBI) overhauled the legal frameworks for non-banking financial companies (NBFCs). These changes simplify the way 'upper layer' NBFCs are identified and also tighten the regulatory framework of government-owned NBFCs.

The most important change is the introduction of a clear test for identifying upper layer NBFCs. Earlier, RBI followed a score-based approach that involved a degree of regulatory assessment and subjectivity. However, under the new framework, NBFCs with a minimum asset size of Rs.1 trillion as per its latest annual audited balance sheet will be classified in the upper layer. This replaces the earlier subjectivity-based regime with a more transparent and thresho...