REC Limited said on 15 October 2026 that it had received the Reserve Bank of India’s conditional No Objection Certificate for the proposed merger in which REC would transfer into Power Finance Corporation (PFC). The NoC clears one regulatory milestone; it does not complete the merger. Shareholders, creditors and other statutory and regulatory authorities must still approve the scheme.
What the RBI NoC means
An RBI NoC is the central bank’s formal non-objection to the proposed transaction, subject to the instructions and conditions specified by RBI. REC’s company secretary and compliance officer, Dinesh Garg, signed the 15 October filing, which states: “In this regard, we wish to inform you that the Company has received No Objection Certificate from RBI on October 15, 2026, subject to the instructions/conditions specified therein.”
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Because the certificate is conditional, it should not be read as an unconditional approval or as evidence that REC has already become part of PFC. REC said the scheme remains subject to further statutory and regulatory approvals and to approval from the respective shareholders and creditors of the two companies.
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How the proposed merger reached this stage
In-principle decision
On 6 February 2026, the boards of PFC and REC gave in-principle approval to pursue a restructuring through a merger. The Ministry of Finance later told the Lok Sabha that the objective was to create greater scale and improve efficiency among public-sector non-banking financial companies.
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Detailed scheme approved
On 28 June 2026, both boards approved the detailed scheme under sections 230 to 232 of the Companies Act, 2013. Under that structure, REC is the transferor company and PFC is the transferee company: REC’s business and assets would move into PFC once all required conditions are met and the scheme becomes effective.
RBI milestone
REC disclosed the RBI NoC on 15 October 2026. The filing did not announce an effective date, a timetable for implementation or a final name for the combined company.
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What REC shareholders are set to receive
The announced share-exchange ratio is 88 fully paid PFC equity shares, each with a face value of INR 10, for every 100 fully paid REC equity shares, each with a face value of INR 10.
| Item | Announced term |
|---|---|
| Transferor | REC Limited |
| Transferee | Power Finance Corporation |
| Exchange ratio | 88 PFC shares for every 100 REC shares |
| Face value of each share | INR 10 |
| Record date | Not yet set; the boards will determine it later |
The ratio tells investors the proposed number of new PFC shares, but it does not by itself establish when those shares will be issued. Eligibility will depend on the record date and the scheme becoming effective after the outstanding approvals and consents are obtained.
How large would the combined lender be?
A Press Information Bureau release describes the proposed merged financing entity as having an aggregate loan book of more than INR 11 lakh crore. That figure is a description of the intended combined scale, not a statement that the merger has already taken effect or that the amount is a forecast of future growth.
The government’s stated rationale is to achieve scale and improve efficiency among public-sector NBFCs. The filings do not provide an operational integration timetable, branch or staffing plan, or details of how customers’ day-to-day interactions would change.
Government control remains a condition
The scheme requires the merged entity to continue qualifying as a Government Company. The Government of India must retain majority voting rights and control, either directly or indirectly. This is an explicit condition of the proposed structure, rather than an incidental description of current ownership.
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Is the REC–PFC merger approved yet?
No. The RBI’s conditional NoC is one step in the process. The transaction still needs the other statutory and regulatory approvals specified for the scheme, along with approval from the respective shareholders and creditors of REC and PFC. Until those conditions are satisfied and the scheme is made effective, REC remains a separate listed company and the share exchange has not occurred.
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The available announcements do not state a final completion date. They also do not state when the record date will be fixed, so investors should not treat 15 October 2026 as either the merger date or the date on which PFC shares will be credited.
What investors should watch next
- Formal notices and voting results for shareholder and creditor meetings.
- Any additional statutory or regulatory approvals required for the scheme.
- The boards’ announcement of the record date for the 88-for-100 share exchange.
- A formal notice confirming the effective date and completion of the transfer from REC to PFC.
- Further disclosure on integration, governance and the combined entity’s continuing Government Company status.
Until those disclosures arrive, the defensible conclusion is limited: RBI has issued a conditional NoC, the proposed exchange ratio is 88 PFC shares for every 100 REC shares, and the merger process is still pending.
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