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Here's why the latest RBI norms are negative for REC, PFC, IRFC and HUDCONBFCs with assets of ₹1 lakh crore and above would qualify for the upper layer under the new rules.By Ritu Singh   |  Meghna Sen  April 13, 2026, 7:32:59 AM IST (Published)2 Min ReadThe Reserve Bank of India (RBI) has released draft amendment guidelines on the identification of Upper Layer (UL) NBFCs, along with changes to the classification of government-owned NBFCs.

Under the proposed framework, the RBI plans to do away with the existing parametric scoring model used to identify UL NBFCs, and instead shift to a simpler, asset size-based approach.

NBFCs with assets of ₹1 lakh crore and above would qualify for the upper layer under the new rules.

The central bank has also proposed removing the automatic inclusion of the top 10 NBFCs in the upper layer, a departure from the current framework.

In addition, the RBI has suggested eliminating restrictions that prevent government-owned NBFCs from moving into the upper layer. It has also proposed allowing the deduction of uncapped state government-guaranteed exposures while assessing such NBFCs for transition into the UL category.

The draft framework includes a provision for periodic review of the UL identification criteria, with the asset threshold proposed to be reassessed every five years.

The RBI has also replaced the term "parametric" with "prescribed" criteria in the framework language.

If classified as upper layer, NBFCs would be subject to tighter credit concentration norms, with exposure limits capped at 20% for a single borrower and 25% for a group, compared to the earlier 25% and 40%, respectively.

UL NBFCs would also face stricter regulatory requirements, including higher standards for capital, governance, and disclosures.

Potential new entrants to UL listNBFC/AUM (₹ bn)REC5,818PFC5,612IRFC4,755HUDCO1,556Potential removal from UL listEntity/AUM (₹ bn)PNB Housing860Sammaan Cap642

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