RBI approved setting up REC Limited subsidiary in Gift City, Gujarat

Current Context: The Reserve Bank of India (RBI) has given a ‘No Objection Certificate’ to REC Limited, a leading Non-Banking Financial Company (NBFC) under the Ministry of Power, for setting up a wholly owned subsidiary.

• The subsidiary is to be set up in the International Financial Services Centre (IFSC), Gujarat International Finance Tec-City (GIFT), Gandhinagar, Gujarat and this was approved on May 3, 2024.
• The proposed subsidiary will engage in a range of financial activities as a finance company within GIFT, including lending, investment, and other financial services.
• The decision to expand operations into GIFT, a burgeoning hub for financial services in India, comes as REC continues to diversify its portfolio and explore new avenues for growth.
• The news was publicly announced on May 5, 2024.

Question:

Q.1 What is the purpose of REC Limited setting up a subsidiary in GIFT City?
a. To diversify its portfolio and explore new growth avenues
b. To provide financial services to rural areas
c. To comply with a new regulation by the RBI
d. To acquire another company