Power Finance Corporation Receives RBI No Objection Certificate for REC Merger

Power Finance Corporation received a No Objection Certificate from the Reserve Bank of India on October 15, 2026, for the proposed merger of REC Limited with and into PFC, according to ScanX. The certificate was issued subject to specific instructions and conditions outlined by the regulator.

RBI Clearance and the Path to Completion

The proposed scheme involves the merger of REC Limited, acting as the transferor company, into Power Finance Corporation Limited, the transferee company, under sections 230-232 and other applicable provisions of the Companies Act, 2013. The development follows the board approval of the scheme on June 28, 2026, which was contingent upon receiving applicable regulatory and other approvals.

Despite the RBI's clearance, the scheme is not yet effective. It remains subject to approval from the respective shareholders of both companies, consent from the creditors of both entities, and the fulfilment of other statutory and regulatory requirements as mandated by law. The intimation was made to the National Stock Exchange of India and BSE Limited under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

What the Company Records Show

According to akta.pro company records, the President of India approved the merger of REC into Power Finance Corporation in June 2026, creating a combined entity with a loan book of about ₹11.5 lakh crore and a targeted effective date of April 1, 2027. Upon completion, all assets and liabilities of REC will transfer to PFC and REC will be dissolved under the Companies Act 2013. REC is a Maharatna Indian government NBFC that finances India's power sector, lending to DISCOMs, transmission utilities, and renewable developers.

Earlier Steps Toward the Merger

REC Ltd incorporated three wholly owned subsidiaries on October 5, 2026, for Bikaner and Mirzapur transmission projects, each with ₹5,00,000 capital, to be transferred to bidders under TBCB guidelines, ScanX reported. In September 2026, REC sought investor bids for up to 5 billion rupees of tokenized bonds, India's first such issuance, with notes due in May 2028 to be bought using the Reserve Bank of India's digital currency, Bloomberg reported. Axis AMC's Pure Contra PMS fund exited REC in July, citing state discom credit risks, Business News Today reported.

Next Steps for REC

The scheme remains subject to shareholder and creditor approvals, with a targeted effective date of April 1, 2027, according to company records.