Scale-based regulation (SBR) is RBI’s framework that regulates NBFCs according to their size, activity and risk. Under the Scale Based Regulation Directions, 2025, non-deposit NBFCs below ₹1,000 crore of assets sit in the Base Layer; deposit-taking NBFCs and those with assets of ₹1,000 crore or more sit in the Middle Layer; the Upper Layer is identified by RBI’s scoring model and always includes the ten largest NBFCs; and the Top Layer is meant to stay empty.
RBI introduced scale-based regulation in 2021 so that small, low-risk NBFCs are not regulated like large, systemically important ones. In November 2025 it consolidated the framework into the Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025, dated 28 November 2025.
The idea is proportionality: the larger and more interconnected the NBFC, the stricter the rules on capital, governance, concentration and disclosure.
| LAYER | WHO IS IN IT | HOW YOU GET THERE |
|---|---|---|
| Base Layer (NBFC-BL) | Non-deposit-taking NBFCs below ₹1,000 crore of assets; always includes NBFC-P2P, account aggregators, NOFHCs and NBFCs with neither public funds nor customer interface | By size and type |
| Middle Layer (NBFC-ML) | All deposit-taking NBFCs; non-deposit NBFCs with assets of ₹1,000 crore or more; always standalone primary dealers and IDF-NBFCs. Deposit-taking NBFCs, core investment companies, infrastructure finance companies and housing finance companies are never in the Base Layer | Crossing ₹1,000 crore, or by type |
| Upper Layer (NBFC-UL) | NBFCs identified by RBI’s parametric scoring model (70% quantitative, 30% qualitative); the top 10 by asset size are always included | RBI identification each year, based on 31 March data |
| Top Layer (NBFC-TL) | Ideally empty; used only if systemic risk from an Upper Layer NBFC rises substantially | RBI decision, with a higher capital charge |
For a growing NBFC, the practical point is to plan the crossing a year ahead: board composition, risk and audit committees, ALM reporting and RBI’s statutory auditor appointment norms all change.
| NBFC TYPE | MINIMUM NOF | GLIDE PATH FOR EXISTING NBFCS |
|---|---|---|
| NBFC-ICC (investment and credit company) | ₹10 crore | ₹5 crore by 31 March 2025, ₹10 crore by 31 March 2027 |
| NBFC-MFI | ₹10 crore | ₹7 crore by 31 March 2025, ₹10 crore by 31 March 2027 |
| NBFC-Factor | ₹10 crore | ₹7 crore by 31 March 2025, ₹10 crore by 31 March 2027 |
| NBFC-P2P, account aggregators, NBFCs without public funds or customer interface | ₹2 crore | – |
| NBFC-IFC and IDF-NBFC | ₹300 crore | – |
An NBFC that misses the glide path loses eligibility to hold its Certificate of Registration, so the 31 March 2027 date belongs in the capital plan now.
A virtual CFO and head office internal audit can build these capabilities before RBI or the lenders ask for them. See NBFC CFO and internal audit.
We review your books, controls and systems, and show you what your own Decision Brief would say. Each month Regi also writes The CFO Desk, a LinkedIn newsletter for owners running businesses in the Gulf, overseas and India.