The Reserve Bank of India has issued a no-objection certificate for the proposed merger between state-run power sector lenders REC Limited and Power Finance Corporation, according to reporting by Accredited Wire Reports.
The regulatory clearance from the central bank marks a critical milestone in the consolidation process of the two major non-banking financial companies, which operate under the administrative control of the Ministry of Power.
Regulatory Clearance from the Central Bank
The central bank's no-objection certificate removes a primary regulatory hurdle for the transaction. As key financial institutions funding India's energy infrastructure, both entities require clearance from the Reserve Bank of India before advancing corporate restructuring plans, according to the corroborated dispatch.
The approval allows the entities to move forward with the statutory procedures necessary to integrate their operations. Further formal filings and clearances will be guided by standard regulatory frameworks governing major public sector non-banking financial institutions.
Structural Consolidation in Power Financing
The move to combine REC and Power Finance Corporation is part of a broader government effort to streamline operations and enhance capital efficiency within the nation's energy sector. Power Finance Corporation previously acquired a majority stake in REC in 2019, creating a parent-subsidiary framework between the two institutional financiers.
With the central bank's no-objection certificate secured, the companies are positioned to pursue the next phases of formal corporate and statutory approvals required to execute the merger.
