Overlapping jurisdictions of the RBI and SEBI create regulatory grey zones in conglomerate governance. Discuss with reference to recent cases.

India regulates conglomerates by type of entity. The RBI supervises NBFCs and Core Investment Companies (CICs), and SEBI governs listed firms through its LODR (Listing Obligations and Disclosure Requirements) Regulations. When one group spans both, an unlisted holding company or a regulated subsidiary can slip into the gap between the two mandates.

Why the overlap creates grey zones

• Rules apply to entities, not groups: under Scale-Based Regulation (SBR), Upper Layer NBFCs must list within three years of identification and make listed-company-style disclosures even before listing [1]. Once listed, the firm comes under SEBI's norms.
• No stated penalty for missing the deadline, and no time limit for the RBI to decide an exit request.

Case 1: Tata Sons

• The RBI's 2026–27 Upper Layer list kept Tata Sons in the layer "without prejudice" to a deregistration application that was still pending [2]. The listing mandate stayed in limbo well past the original three-year window.
• The SEBI Chairman said there are governance "issues" at the holding-company level because it is "not really a listed firm". SEBI can act only through LODR compliance by the listed group companies [3].
• The board dispute over the chairman's reappointment and listing [3] depends on the Trusts' rights under the company's Articles of Association. The Supreme Court upheld those rights in the 2021 Tata–Mistry judgment [4]. This is a company-law question that neither regulator can settle.

Case 2: Paytm

• In 2024 the RBI restricted Paytm Payments Bank. Its order also required termination of the nodal accounts of the listed parent, One97 Communications [5]. In April 2026 the RBI cancelled the bank's licence [6].
• The compliance failure was in an RBI-regulated bank, but the market shock hit shareholders of a SEBI-regulated parent. Disclosure timing and investor protection were split across two regulators.

The other side

• Dual oversight also adds checks. The RBI looks at financial safety and SEBI at disclosure, and the two can complement each other.
• The SBR's minimum five-year stay in the Upper Layer [1] stops firms from making quick exits to avoid the rules.

The grey zones come less from the overlap itself than from the gaps where the two mandates meet. Three steps would close them: a time-bound RBI protocol for exit and listing, SEBI insisting that listed affiliates disclose material events on time, and joint supervision of conglomerates through the FSDC (Financial Stability and Development Council). Together they would advance the transparency and investor protection that both SEBI's mandate and SBR aim for.