Rural Electrification Corporation (REC), which was earlier keen to set up a new bank with Power Finance Corporation (PFC) and IFCI, has lost interest and decided not apply for a license.
Former finance minister, Pranab Mukherjee, in his Budget speech of 2010-11, announced the Reserve Bank of India (RBI) was considering giving some additional banking licences to private sector entities and to non-banking financial companies (NBFCs). REC, PFC and IFCI are all NBFCs. Following the Budget announcement, RBI floated a discussion paper in September 2010 and after a year, it issued the draft norms.
REC is engaged in providing financial assistance to state electricity boards, state government departments and rural electric co-operatives for rural electrification projects as are sponsored by them.
