REC said it received the Reserve Bank of India’s no-objection on October 15 for its proposed merger into Power Finance Corporation. The clearance is conditional, and further approvals remain.
The Breakdown
The RBI’s instructions and conditions are not reproduced in REC’s filing. The scheme still needs other statutory and regulatory approvals, plus shareholder and creditor approvals where required.
The filing refers back to the June 28 announcement of both boards’ scheme approval.
Why the scale matters
When the government outlined the scheme in June, it described the proposed financing entity as having an aggregate loan book of more than ₹11 lakh crore. That dated figure indicates the scale of the planned combination; it is not a fresh lending commitment announced with the RBI clearance.
The June announcement also made continued government-company status a condition of the scheme. The Government of India is to retain majority voting rights and control, directly or indirectly, in the merged entity.
For the power-finance sector, the development is a step towards combining the two institutions within one company. The October disclosure establishes progress in that process, without setting a completion date.
The Crunch
REC’s RBI no-objection moves the proposed merger forward. The combination’s scale matters, but its completion still depends on the remaining approvals and conditions.