Power Finance Corporation Ltd (PFC) on Friday informed the bourses that its board, in a meeting held on February 6, 2026, has given in-principle approval to restructure and potentially merge with Rural Electrification Corporation (REC) Ltd, following the direction provided in the Union Budget 2026–27 by Finance Minister Nirmala Sitharaman. The move could mark a significant reshaping of India’s public sector power financing landscape.
In the exchange filing submitted to both the National Stock Exchange of India and BSE Ltd., PFC said that its board took note of the Budget announcement made by FM Sitharaman on February 1, 2026, which stated: “In order to achieve scale and improve efficiency in the Public Sector NBFCs, as a first step, it is proposed to restructure the Power Finance Corporation and Rural Electrification Corporation.”
Post approval, the company confirmed that a detailed merger scheme will be shared once the requisite regulatory and administrative approvals are obtained.
Budget 2026: Vision for NBFCs and public sector reform
During her Budget speech in the Lok Sabha, FM Sitharaman emphasised the Government’s “Viksit Bharat” vision for the financial sector — especially for non-banking financial companies (NBFCs) — with a focus on expanding credit flow, adopting modern technology and enhancing institutional capacity. As part of this roadmap, she proposed the restructuring of PFC and REC to help the institutions achieve greater scale, better operational efficiency, and wider reach.
The Budget also proposed setting up a High-Level Committee on Banking for Viksit Bharat to review the broader financial sector framework, underscoring the Government’s intent to strengthen public sector financial institutions while safeguarding financial stability and inclusion.
