New Delhi (20.02.2026): Union Ministry of Power has formed two separate panels to examine the framework for the proposed merger of Power Finance Corporation (PFC) and its subsidiary REC Ltd and also to supervise the restructuring of these two non-banking financial companies (NBFCs). A working group has been created to study the nitty-gritty of the merger. The group includes one executive director each from PFC and REC, along with the ministry’s Director (Distribution).
A separate high-level committee has also been set up to oversee the overall merger process. It comprises the chairpersons of PFC and REC as members, with the ministry’s joint secretary (distribution) designated as the convenor. The ministry communicated the decision through two separate orders addressed to the concerned officials as well as the chairpersons and managing directors of both the companies.
The order stated that the working group will examine and recommend measures on personnel integration, harmonisation of pay scales, promotional frameworks etc. It will also assess corporate and functional restructuring, including reorganisation of reporting lines and supervision of technology integration across the combined entity.
The group has been tasked with aligning stakeholder interests, resolving inter-entity matters, and tracking progress on obtaining approvals from regulatory authorities, among other merger-related issues.
The proposed consolidation of PFC and REC comes against the backdrop of the government’s efforts to strengthen the balance sheets and operational efficiency of public sector financial institutions. The two state-run NBFCs have a combine loan book of Rs 11.5 lakh crore. Their merger is significant because it will lead to the creation of the single-largest lending entity in the power sector.
