NEW DELHI, February 6, 2026: In a historic move to redefine India’s energy financing landscape, the Board of Directors of Power Finance Corporation (PFC) has officially accorded in-principle approval for the merger with its subsidiary, REC Limited. This decision follows a landmark announcement made by the Union Finance Minister during the Budget 2026-27 speech.
The Vision for 'Viksit Bharat'
The restructuring is part of the government's broader vision to achieve scale and improve operational efficiency within Public Sector NBFCs. Under Para 43 of the Union Budget, the government proposed this restructuring to drive credit disbursement and technology adoption for a "Viksit Bharat".
Key Details of the Announcement:
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Official Approval: The PFC Board met today, February 6, 2026, and moved forward with the merger plan.
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Government Control: Post-merger, the entity will strictly remain a "Government Company" under the Companies Act, 2013.
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Historical Context: PFC currently holds a 52.63% stake in REC, which was acquired from the Government of India previously.
Market Impact: Why Investors are Watching
This merger is set to create a financial behemoth in the power sector. By consolidating the two largest power-lending NBFCs, the government aims to reduce borrowing costs and streamline the funding of massive green energy projects across India.
"The restructuring of PFC and REC is a first step toward creating a leaner, more powerful financial engine for India's infrastructure," noted the Board during the meeting.