RBI Announces Voluntary Surrender of NBFC Licences Following Corporate Mergers
The Reserve Bank of India (RBI) made a significant announcement on Tuesday, revealing that two major non-banking financial companies (NBFCs) have voluntarily surrendered their certificates of registration. This action follows the completion of mergers with their respective associate entities, marking a notable shift in the financial sector's corporate structure.
Key NBFCs Surrender Registration Post-Merger
Tata Motors Finance officially merged with Tata Capital on May 8, 2025, after obtaining all required regulatory clearances. Similarly, Piramal Enterprises completed its merger with Piramal Finance in September 2025. Consequently, both entities have relinquished their standalone NBFC licences, as confirmed by the central bank in an official statement.
In addition to these prominent cases, the RBI disclosed that six other NBFCs have also surrendered their operating licences. The list includes AAR Shyam India Investment Company, Rama Investment Co, Sri Ramachandra Enterprises, Shree Nirman, Ankita Pratisthan, and Mayuka Investment. This collective action reflects ongoing consolidation and strategic realignments within India's non-banking financial sector.
RBI Proposes New Registration Exemptions for Low-Risk NBFCs
Separately, the Reserve Bank has initiated a public consultation process on draft amendments that could reshape the regulatory landscape for NBFCs. The proposed changes, titled Reserve Bank of India (Non-Banking Financial Companies Registration, Exemptions and Framework for Scale Based Regulation) Amendment Directions, 2026, were unveiled following the monetary policy announcement on February 6.
The central bank is inviting comments from NBFCs, industry stakeholders, and the general public until March 4, 2026. This move underscores RBI's commitment to inclusive policy-making and regulatory refinement.
Details of the Proposed Exemption Framework
Under the draft framework, specific NBFCs meeting defined criteria would be exempt from mandatory registration with the RBI. To qualify, entities must:
- Not accept public funds or deposits
- Lack direct customer interfaces
- Maintain asset sizes below Rs 1,000 crore
- Fulfill additional stipulated conditions
These qualifying NBFCs are classified as 'Type I NBFCs'. The RBI explained that this regulatory adjustment stems from a comprehensive review of the Scale Based Regulatory (SBR) framework, originally introduced in October 2021. The review concluded that NBFCs operating without public funds or customer interfaces inherently carry a lower risk profile, justifying differentiated regulatory treatment.
Currently, such entities are categorized within the Base Layer of the SBR framework and are subject to relatively relaxed compliance norms. The draft directions also elaborate on procedures for deregistration or conversion of existing eligible NBFCs, including those presently holding Type I registration status, along with associated transitional provisions.
This proposed exemption represents a strategic effort by the RBI to streamline regulations, reduce compliance burdens for low-risk players, and foster a more efficient and responsive financial ecosystem. The central bank's dual announcements—highlighting both licence surrenders and potential regulatory easing—signal a dynamic period of transformation and rationalization within India's NBFC sector.
