The Boards of REC Limited and Power Finance Corporation (PFC) have accorded in-principle approval to move ahead with a proposed merger of the two public sector non-banking financial companies (NBFCs). The decision aligns with the Union Budget 2026–27 announcement aimed at enhancing scale and operational efficiency in the sector.
In her Budget speech, the Finance Minister outlined the vision for NBFCs under Viksit Bharat, highlighting expanded credit delivery and increased technology adoption. As part of this strategy, restructuring of PFC and REC was identified as an initial step toward consolidation and improved efficiency in the sector.
At board meetings held on 6 February 2026, both companies noted that the restructuring process will involve formulation of a detailed merger scheme in accordance with applicable laws and regulatory requirements. The final proposal will be placed before the relevant authorities for approval once completed.
Revised regulatory filings by REC and PFC clarified that the merged entity will continue to be remain classified as a “Government Company” under the Companies Act, 2013. The clarification is significant in view of certain media reports suggesting that only PFC would retain government company status after the merger. The filings explicitly state that the designation will apply to the merged entity.
Further details regarding the merger structure, integration roadmap and implementation timeline will be disclosed after completion of the approval process.
PFC currently holds a 52.63% majority stake in REC, acquired from the Government of India in 2019.
Join Us on WhatsApp