RBI Relaxes Exposure Cap for Upper Layer Infra Financiers

Research evidence excerpt

RBI Relaxes Exposure Cap for Upper Layer Infra Financiers

India | Consumer Finance EquityJuneResearch24, 2026

RBI Relaxes Exposure Cap for Upper Layer

Infra Financiers

RBI's final norms for NBFC Upper Layer (UL) classification broadly aligns

with draft, simplifying UL classification to Rs1trn+ asset threshold &

bringing govt owned NBFC-IFCs into the scope. However, it has relaxed

connected counterparty limit for NBFC-UL IFCs to 45% of Tier 1 cap (35%

presently). Large IFCs/ Power Financiers (in Middle Layer now) can move to

UL with a tighter cap vs. its existing 50% cap, but less onerous than implied

per current UL norms.

RBI amends NBFC-UL framework and Credit & Investment norms: RBI has simplified the

framework for NBFC-UL classification in line with its draft proposal, shifting to a purely asset

size–based threshold replacing the earlier scoring-based approach. NBFCs having ≥ Rs1

trillion assets as per latest standalone audited balance sheet would be designated as NBFC

Upper Layer and would be subjected to tighter regulatory norms and supervision. The asset

size threshold would by reviewed every three years vs. five years proposed as per the draft.

Eligible government NBFCs as per the criteria will now be included in NBFC-Upper Layer

without exemptions. However, listing will not be mandatory for NBFC-UL that are fully owned

and controlled by the Govt given developmental mandate. These NBFCs are currently placed

in Base/ Middle Layer. PSU Infra Financiers (NBFC-IFCs) like IRFC, PFC, REC, HUDCO may be

added while PNB Housing & others can exit UL.

RBI raises large exposure limit for Upper Layer NBFC IFCs: For Upper Layer Infra Finance

Cos, RBI has raised the limit for exposure to group of connected counterparties to 45% of tier