As per the Reserve Bank of India’s (RBI) Scale Based Regulations (SBR), how many non-banking finance companies (NBFCs) have been placed in the Upper Layer (NBFC-UL)?

Correct option is C

The Reserve Bank of India (RBI) has identified 15 non-banking finance companies (NBFCs) in the Upper Layer (NBFC-UL) under the Scale Based Regulations (SBR).
Details:
What is NBFC-UL?
· The Upper Layer (NBFC-UL) represents NBFCs that are considered systemically significant and warrant enhanced regulatory requirements.
· NBFC-UL entities are selected based on their asset size and a scoring methodology specified in the RBI’s Scale Based Regulation (SBR) framework.
Examples of NBFCs in NBFC-UL:
· LIC Housing Finance
· Bajaj Finance
· Shriram Finance
· Tata Sons
· Cholamandalam Investment and Finance Company
Enhanced Regulatory Requirements:
· NBFCs classified in the UL must comply with stricter guidelines, such as higher capital adequacy requirements and enhanced governance standards.
· These regulations apply for a minimum of five years, even if the NBFCs do not meet the criteria in subsequent years.
Scale Based Regulation (SBR) Framework:
· Introduced on October 22, 2021, the SBR framework categorises NBFCs into four layers:
1. Base Layer (NBFC-BL): Least regulated.
2. Middle Layer (NBFC-ML): Moderately regulated.
3. Upper Layer (NBFC-UL): Stringently regulated.
4. Top Layer (NBFC-TL): Reserved for exceptionally significant entities posing systemic risks.
Purpose of NBFC-UL Regulations:
· To strengthen the stability of the financial system.
· To address risks posed by systemically important NBFCs.
· To ensure better governance, transparency, and efficiency in non-bank lending.