New Delhi: Rural Electrification Corporation Limited (REC) has received a No-Objection Certificate (NOC) from the Reserve Bank of India (RBI) for its proposed merger with Power Finance Corporation Limited (PFC), marking an important step in the transaction’s regulatory approval process.
REC disclosed the development in a regulatory filing on Thursday, October 15, 2026, stating that the RBI had issued the NOC on October 15, subject to specified conditions and instructions.
The clearance represents progress towards the proposed consolidation of the two public sector power-sector financing companies. However, the NOC does not signify that the merger has been completed, as further statutory and regulatory clearances and other applicable approvals are still required.
REC and PFC Boards Approved Merger Scheme in June
The latest development follows the decisions taken by the respective boards of directors of REC and PFC on June 28, 2026, when both boards approved the proposed merger scheme.
The approvals were conditional upon obtaining the necessary statutory, regulatory and other applicable clearances.
Read Also: PFC-REC Merger Approved: Boards Clear Scheme to Create ₹11 Lakh Crore Power Financing Giant
Under the proposed arrangement, REC Limited is the transferor company, while Power Finance Corporation Limited is the transferee company. The scheme envisages the merger of REC into and with PFC.
The proposed transaction is being pursued under Sections 230–232 of the Companies Act, 2013, and other applicable legal provisions.
Merger Still Requires Shareholder and Creditor Approvals
Although the RBI’s NOC is a significant regulatory milestone, the proposed merger remains subject to further approvals and compliance requirements.
According to REC’s disclosure, the scheme will require other applicable statutory and regulatory clearances, as well as approvals from the respective shareholders and creditors of both companies, wherever required under the applicable laws and the terms of the scheme.
The RBI has also attached conditions and instructions to its NOC, which will need to be addressed as part of the process.
The merger can proceed towards completion only after the relevant requirements have been fulfilled and the necessary approvals secured.
What the REC-PFC Merger Update Means
The RBI’s no-objection certificate advances the proposed REC-PFC merger through one stage of the regulatory process. However, the transaction remains conditional on the completion of the remaining approval procedures.
Investors and other stakeholders will need to follow subsequent company disclosures for updates on regulatory clearances, shareholder and creditor approvals, and the progress of the merger scheme.
As of October 15, 2026, the companies have received the RBI’s NOC, but the merger has not been reported as completed.
About REC Limited
REC Limited is a Maharatna public sector enterprise under the Ministry of Power that provides financial assistance for power sector projects across India, including generation, transmission, and distribution infrastructure, as well as renewable energy initiatives.
About Power Finance Corporation
Power Finance Corporation is a leading non-banking financial company (NBFC) under the Government of India that primarily finances power sector projects, supporting infrastructure development, capacity expansion, and clean energy initiatives across the country.
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