The central government has set up two panels to work out the merger process between Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). The panels have been tasked with examining the legal and regulatory framework that would govern a combination of the two state-owned financiers. They will also be responsible for assessing any statutory approvals required from regulators and ministries. One panel will focus on financial and commercial aspects, including valuation, asset quality, and due diligence, while the other will examine operational integration, human resources and governance arrangements. The reviews will cover balance sheets, contingent liabilities and contractual obligations to identify issues that could affect creditors and investors. The groups are expected to consult relevant stakeholders and prepare a roadmap for merger implementation. The government expects recommendations to address sequencing of approvals, the mechanism for share swap or amalgamation and safeguards for minority investors and employees. The panels will also consider implications for ongoing lending, loan books and capital adequacy to ensure continuity of services to power sector borrowers. Any proposal will require clear transitional arrangements to manage risks during the integration phase. Final decisions will rest with the relevant ministries and the cabinet, and will be subject to regulatory clearances and parliamentary oversight where applicable. The formation of the panels signals an intent to pursue consolidation in the public sector financing space with an emphasis on orderly execution. Authorities have not announced a timeline for completion of the exercise. Observers note that such consolidation is typically scrutinised for its impact on market competition and credit flows, and panels will likely weigh systemic risks alongside potential efficiency gains. The process will require coordinated work across departments to align accounting practices, risk management and information systems. Careful sequencing and transparent reporting are expected to underpin credibility of any merger plan.