New Delhi: The Power Finance Corporation (PFC) board on Friday gave in-principle approval for the merger of the non-banking finance company REC Limited with itself.
Post-merger, PFC will continue to remain as a 'government company'.
The board approval for the merger of PFC and REC came after an announcement made in this regard in the Budget on Sunday.
Earlier, pursuant to 'In Principle' approval of the Cabinet Committee on Economic Affairs (CCEA), PFC acquired 52.63 per cent of the government's holding in REC Limited (REC) for Rs 14,500 crore in March 2019.
Accordingly, REC has been operating as a subsidiary company of state-owned PFC.
"The Board of Directors of PFC took note of the budget announcement and accorded its in-principle approval for restructuring in the form of a merger of PFC and REC, while ensuring that, post-merger, PFC continues to remain as a "Government Company" under the Companies Act, 2013 and other applicable laws," according to the regulatory filing.
Finance Minister Nirmala Sitharaman, in her budget speech on Sunday, had said, "The vision for NBFCs for Viksit Bharat has been outlined with clear targets for credit disbursement and technology adoption. 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".
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