PFC-REC merger moves ahead; seeks Presidential approval for final nod

This step advances the formation of a major power financing entity, building on prior in‑principle nods from both boards and a government push in the FY27 Budget.

On Saturday, state‑run PFC announced that its Board of Directors has set aside the proposal to merge the Maharatna firm with REC and is seeking the President of India’s endorsement.

The Chairman and Managing Director of PFC will now approach the President of India for approval, signalling that the merger is moving forward.

In a BSE regulatory filing, PFC stated that its Board, at today’s (Saturday) meeting, had earmarked the REC‑into‑PFC merger proposal for presidential approval and authorised the CMD to submit an application to the President seeking that approval.

Post-merger structure and asset transfer details

Once the merger receives legal clearance and takes effect, REC’s assets and liabilities will be transferred to PFC, after which REC will cease to exist.

The boards of PFC and REC gave in‑principle approval to the merger in February 2026, following the Finance Minister’s FY27 Budget proposal to combine the two NBFCs.

Scale of combined lending and sector exposure

Each Maharatna entity oversees a loan portfolio of about ₹6 lakh crore, with roughly 40 % devoted to distribution lending. Their renewable‑energy generation exposure ranges from 12 % to 15 %, and both have expanded into non‑power infrastructure financing, including roads and ports.

Creation of a power financing behemoth

The merger will forge a financing powerhouse dedicated to funding large‑scale, complex power and allied infrastructure projects, such as AI‑enabled data centres.

A BusinessLine explainer notes that the combined entity could boast a loan book of ₹11.5 lakh crore, rivaling Canara Bank—the seventh‑largest bank in India.

Published on May 16, 2026