New Delhi, June 29 -- The boards of state-owned Power Finance Corporation (PFC) and REC Ltd have approved a scheme for the merger of REC into PFC, creating what the companies said would be a significantly larger financing institution for India's power and infrastructure sectors, subject to regulatory, shareholder and creditor approvals.

In separate exchange filings on Saturday, both companies said their boards had approved the scheme of merger by absorption under Sections 230 to 232 of the Companies Act, 2013, under which REC will merge into PFC as the transferee company.

According to the approved scheme, REC will be dissolved without being wound up upon the merger becoming effective, while eligible REC shareholders will receive 88 equi...