Reserve Bank Governor Sanjay Malhotra on Wednesday announced that the monetary authority will come up with a new framework for non-banking lenders, amid a lack of clarity on the Tata Sons listing issue. Malhotra told journalists in his regular press conference after the policy meeting that we are coming with a new framework for NBFCs. Very soon, we should do that. On a specific question related to Tata Sons, Malhotra said that the new framework will divide non-banking finance companies into different categories. However, he did not say anything in detail on this matter. Everyone’s eyes are on this matter because RBI has to decide whether Tata Sons, the holding company of this big conglomerate that deals in business ranging from salt to software, will remain a privately owned company or it will have to be listed in the stock market.
The company should have been listed last year
As per current RBI rules, Tata Sons, which is a ‘core investment company’, should have been listed by September 30 last year. This is because it is included in the group of 15 companies falling in the ‘upper layer’ category. Except Tata Sons, all other companies have followed this rule. Earlier, Malhotra had said that any company can continue its business until its license is cancelled. He declined to comment further on the matter, even though the mandatory listing deadline has passed. With the listing, the burden of complying with the rules will increase on Tata Sons, in which emphasis will be laid on making more information public. At the same time, some people believe that it may be difficult for this business group to follow the rules, because it is doing business in different sectors and at different stages of development.
Who will benefit from the listing of Tata Sons?
Shapoorji Pallonji Group will greatly benefit from the listing. This group is the largest private owner with more than 18 percent stake in this big company and is currently going through a financial crisis. Meanwhile, when Malhotra was asked about the arrest of Fino Payments Bank Chief Executive Officer Rishi Gupta, he refused to comment. He was also asked whether this arrest would have any impact on the bank’s ambitions of becoming a ‘small finance bank’? RBI had already given in-principle approval for this change.