India, July 24 -- The Reserve Bank of India's decision to require fifteen Upper-Layer NBFCs to list their shares has revived an old debate in a new form. The conversation around Tata Sons Private Limited is only the most visible part of it. The deeper question is this: when a regulator wants better governance from the entities it supervises, is mandating a stock exchange listing the only instrument to reach for?

The answer is not obvious, and it deserves more careful thinking than it has received. Listing is, at its core, a capital markets mechanism. It helps a company raise money from the public. It also gives existing shareholders a way to convert their holdings into tradeable instruments. In that sense, the capital market allows publi...