MoP Constitutes Oversight Panels for PFC-REC Merger

Current Context: On 19 February 2026, the Ministry of Power (MoP) constituted two oversight panels for the merger of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) Limited.

• A Working Group was formed with officials from PFC, REC, and MoP to examine merger modalities.
• A High-Level Committee was set up to supervise and monitor the overall merger process.
• The merger aims to create India’s largest power-sector financier.
• Objectives: strengthen the balance sheet, boost efficiency, and expand lending capacity for power projects.
• This move aligns with the Union Budget 2026–27 proposal to restructure public sector Non-Banking Financial Companies (NBFCs).

Question:

Q.1 What is the primary objective of merging Power Finance Corporation (PFC) and Rural Electrification Corporation Limited (REC Limited)?
a) To privatize the Indian power sector
b) To discontinue rural electrification financing
c) To create India’s largest power-sector financier
d) To convert them into commercial banks

Answer: c) The merger aims to consolidate financial strength and form the largest power-sector financing entity in India.