After 6 days, RBI wakes up with an FAQ on why it wants Tata Sons listing

While the Reserve Bank took 30 long months to reject Tata Sons’ application–filed in March 2024, after meeting all the then existing regulatory conditions–to cancel its NBFC-CIC licence, without proffering any reason for doing so in a terse letter dated September 11, the central bank woke up six days later to indirectly explain why it did what it did on the Tatas in the form of an FAQ, which though remains completely silent on the merits of pushing a company to go a stock exchange listing.

All it said in the letter to the Tata group chief financial officer Saurabh Agrawal was that its application for voluntary surrender of its CIC licence “cannot be acceded to”.

The RBI had classified Tata Sons as an upper-layer NBFC in October 2022, under which it was to go public before the end of September 2025. But since then it met all the conditions to be treated an upper layer NBFC by March 2024 and in the same month wrote to RBI to cancel its certificate of registration as a CIC. However, the RBI chose to sit over it for the next 30 months and even in the August 2026 list, it retained the company in the upper-layer NBFC list, saying the decision was “without prejudice” to the final outcome of the pending application.

The s0-called FAQ, issued late Tuesday night, clarifies why it chose to retain Tata Sons remains an upper layer NBFC despite being completely debt-free and having no direct public borrowings, but has had no impact on the $290-billion with diverse business interest as the regulatory goalpost kept changing. It now clarifies—after five months of issuing the new set of norms for large NBFCs—by defining three concepts – definitions of a CIC, principal business and public funds.

RBI’s requirement that Tata Sons be classified as an upper layer NBFC, and its rejection of the company’s bid to deregister as an unregistered core investment company (CIC), are anchored in three provisions explained in the FAQ.