PFC-REC Merger: PFC board approves merger with REC, restructuring announced in the budget:In the budget speech, the Finance Minister had stressed on the need for NBFCs to be prepared based on future needs and goals.

News Topical, Digital Desk : In line with the recent budget announcement, the Power Finance Corporation (PFC) board has given in-principle approval for a merger with REC. In the budget speech, the Finance Minister emphasized the need for NBFCs to be prepared for future needs and objectives. The restructuring of PFC and REC was also announced. The board's approval in this direction allows the merger process to gain momentum. This announcement came after market hours.

What did the company say?
In the information sent to the stock market, PFC said that the Board of Directors of Power Finance Corporation (PFC) considered and approved some important decisions in the meeting held on February 6, 2026.

Under the in-principle approval received from the Cabinet Committee on Economic Affairs (CCEA), PFC has acquired the government's 52.63% stake in REC Limited. Consequently, PFC and REC will now operate as holding-subsidiary companies.

On February 1, 2026, the Finance Minister, in paragraph 43 of the Union Budget 2026-27 speech, announced the restructuring of PFC and REC to strengthen public sector NBFCs. The objective is to increase scale, improve efficiency, promote credit disbursement, and technology adoption. The PFC Board has taken note of this budget announcement and has given in-principle approval to the restructuring in the form of a merger between PFC and REC. The Board has also clarified that even after the merger, PFC will remain a "Government company" under the Companies Act 2013 and other applicable laws. The detailed scheme of the merger will be made public once it is finalized and necessary approvals are received.

What was the budget announcement? The Finance Minister stated in his budget speech that, in keeping with the goal of a developed India, a clear vision has been established for NBFCs, setting concrete targets for credit disbursement and technology adoption. To achieve scale and increase efficiency in public sector NBFCs, the restructuring of Power Finance Corporation (PFC) and REC has been proposed as a first step.