REC Board Clears Merger with PFC; Awaits Government Approval
The merger will be executed under Sections 230–232 of the Companies Act, 2013
In a major consolidation move in India’s power financing space, the Board of REC Limited has approved its merger into Power Finance Corporation Limited (PFC), subject to approval from the President of India and other statutory authorities.
Strategic Consolidation in Power Financing
The decision was taken at REC’s Board meeting held on May 16, 2026. The proposed merger aims to integrate operations of the two leading public sector lenders in the power sector, enabling better resource optimization, enhanced lending capacity, and operational synergies.
The Board has authorized the Chairman and Managing Director of REC to initiate the formal process for seeking approval from the Government of India.
Merger Structure and Key Conditions
The merger will be executed under Sections 230–232 of the Companies Act, 2013. A share exchange ratio will be determined by independent valuers to ensure fairness and transparency in the transaction.
A key condition of the merger is that the combined entity will continue to retain its status as a ‘Government Company’ both during and after the process.
Upon completion of all approvals and legal formalities:
- All assets and liabilities of REC will be transferred to PFC
- REC will cease to exist as a separate entity
Strengthening Governance
In a parallel development, REC has appointed Mohammed Azaz Ali as its Chief Compliance Officer, effective May 17, 2026.
Currently serving as General Manager (Finance), he will hold the position until June 30, 2028. With a background in Electronics Engineering and an MBA in Finance, he is expected to reinforce compliance and governance frameworks during this transition phase.
