News

The Board of Directors of Power Finance Corporation Ltd (PFC) on February 6, 2026, approved the in-principle merger of PFC with Rural Electrification Corporation Ltd (REC). The decision follows PFC’s acquisition of 52.63 per cent of the government’s holding in REC, making REC a subsidiary of PFC.

The board also took note of the announcement made by the Finance Minister on February 1 under paragraph 43 of the Union Budget 2026-27 speech. The budget highlighted a plan to restructure public sector NBFCs to achieve scale and improve efficiency, proposing PFC and REC’s merger as a first step.

PFC stated that post-merger, it will continue to remain a “Government Company” under the Companies Act, 2013, and other applicable laws. The detailed merger scheme will be shared after obtaining the necessary approvals.

The merger is expected to strengthen the operations of both entities and align with the government’s vision for developing the NBFC sector.

More to come...