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REC Limited said on 15 October 2026 that it had received a Reserve Bank of India (RBI) No Objection Certificate (NoC) for its proposed merger into Power Finance Corporation (PFC). The NoC is conditional and does not complete the transaction: shareholder and creditor votes, additional statutory and regulatory clearances, and the formal effectiveness of the scheme are still pending.
What the RBI NoC means
An RBI NoC confirms that the central bank has no objection at this stage to the proposed scheme, subject to the instructions and conditions specified by the RBI. REC’s filing, signed by company secretary and compliance officer Dinesh Garg, stated: “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.”
That makes the NoC a regulatory milestone rather than a merger completion notice. REC said the scheme remains subject to other statutory and regulatory approvals and to approval from the respective shareholders and creditors of REC and PFC.
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| Date | Development |
|---|---|
| 6 February 2026 | PFC and REC boards gave in-principle approval to pursue 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. |
| 28 June 2026 | Both boards approved the detailed scheme under sections 230 to 232 of the Companies Act, 2013. REC is the transferor and PFC is the transferee. |
| 15 October 2026 | REC disclosed that it had received the conditional RBI NoC. |
What REC shareholders are proposed to receive
Share-exchange ratio
Under the announced scheme, REC shareholders would receive 88 fully paid PFC equity shares of INR 10 each for every 100 fully paid REC equity shares of INR 10 each. The boards have not yet fixed the record date, so shareholders do not yet have a confirmed date on which holdings will be measured for the exchange.
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| Item | Announced term |
|---|---|
| REC shares surrendered | 100 equity shares, INR 10 face value each |
| PFC shares issued | 88 fully paid equity shares, INR 10 face value each |
| Record date | To be determined by the boards |
The ratio is a proposed scheme term, not evidence that the share transfer has already occurred. The eventual issue and cancellation mechanics will depend on the scheme becoming effective after all required approvals.
What approvals are still required
The RBI’s clearance does not replace the other steps in a Companies Act merger. Based on REC’s disclosure, the remaining process includes:
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- Approvals from the relevant statutory and regulatory authorities.
- Approval by REC shareholders.
- Approval by PFC shareholders.
- Approval by the respective creditors of both companies.
- Completion of the legal process under sections 230 to 232 of the Companies Act, 2013.
The available announcement does not provide an effective date, a timetable for these votes, or a final post-merger corporate name. Until the scheme is sanctioned and becomes effective, REC and PFC remain separate companies.
Scale and government-control conditions
Proposed loan-book size
A government release described the combined financing entity as having an aggregate loan book of more than INR 11 lakh crore. That figure is a stated scale objective for the merged entity; it is not a forecast of future growth or a guarantee of profitability.
Government Company status
The scheme includes an explicit control condition: the merged entity must continue to qualify as a Government Company, with the Government of India retaining majority voting rights and control, directly or indirectly. This requirement is separate from the RBI NoC and must continue to be satisfied as the transaction is implemented.
Is the REC–PFC merger approved yet?
No. The RBI has issued a conditional NoC, but the merger is not legally complete. The boards have approved the scheme and one important regulator has cleared it subject to conditions; shareholder, creditor and other statutory or regulatory approvals remain outstanding. No effective date has been announced in the disclosed information.
What to watch next
- Meeting notices and voting dates: These will indicate when shareholders and creditors can consider the scheme.
- Further regulatory or tribunal orders: The Companies Act process can require additional directions and sanctions before effectiveness.
- Record-date announcement: This will establish which REC holdings qualify for the 88-for-100 exchange.
- Effective-date filing: A formal notice that the scheme has become effective will distinguish completion from an interim approval.
- Control and listing details: Investors should look for confirmation that majority government control continues and for instructions on the treatment of REC shares after effectiveness.
Until those announcements are made, investors should treat the 88 PFC shares for every 100 REC shares as the proposed consideration under a pending scheme, not as an immediately executable entitlement.
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Frequently Asked Questions
When will REC merge into PFC?
No effective date or implementation timetable has been announced. The merger still requires shareholder, creditor and other statutory or regulatory approvals.
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Will REC shareholders get PFC shares?
The proposed scheme provides 88 PFC equity shares for every 100 REC equity shares, with the record date to be set later. The exchange will occur only if the scheme receives all required approvals and becomes effective.
Does the RBI NoC mean the merger is final?
No. It is a conditional regulatory clearance, not the legal completion of the merger.
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