The Board of Directors of Power Finance Corporation Ltd. (PFC) has approved a merger with REC Limited (REC). This decision follows the ‘In Principle’ approval from the Cabinet Committee on Economic Affairs (CCEA) where PFC acquired 52.63% of Govt’s holding in REC. The merger aims to restructure the Power Finance Corporation and Rural Electrification Corporation, enhancing efficiency in the Public Sector NBFCs. The detailed merger scheme will be shared after requisite approvals.
Merger Approved
The Board of Directors of Power Finance Corporation Ltd. (PFC) has approved the restructuring in the form of a merger of PFC and REC Limited (REC). This announcement was made on February 6, 2026.
Background of the Merger
This decision follows the ‘In Principle’ approval of Cabinet Committee on Economic Affairs (CCEA) where PFC acquired 52.63% of the Government’s holding in REC. Consequently, PFC and REC are operating as holding and subsidiary companies.
Rationale for the Merger
The merger aims to restructure the Power Finance Corporation and Rural Electrification Corporation to improve scale and efficiency in the Public Sector NBFCs. The announcement made on February 1, 2026, by the Hon’ble Minister of Finance, outlined this vision within the Union Budget 2026-27 speech.
Post-Merger Status
Post-merger, PFC will continue to remain as a “Government Company.” The detailed merger scheme will be shared once finalised after requisite approvals.
Source: BSE
