Mumbai: The government on Monday named Mahesh Kumar Jain, managing director and chief executive officer of IDBI Bank, as the fourth deputy governor of the Reserve Bank of India (RBI), filling a post that has remained vacant since the retirement of S.S. Mundra in August 2017.

Jain’s successful track record at Indian Bank as executive director first and CEO later, had prompted the government to name him as CEO of IDBI Bank in March 2017, in an abrupt swap with the then IDBI Bank boss Kishor Piraji Kharat.

Jain has been appointed for a period of three years as RBI deputy governor.

The RBI has four deputy governor posts; out of these, two are from within RBI, while one is a commercial banker and one is an economist. The other deputy governors at RBI are Viral Acharya, B.P. Kanungo and N.S. Vishwanathan. IDBI Bank has been struggling with huge losses and heavy bad loans for the last three fiscal years. During his term, RBI initiated prompt corrective action (PCA) against IDBI Bank and put restrictions on corporate lending and branch expansion.

Jain put in place a turnaround strategy for the bank which includes identifying areas of cost reduction and revenue maximisation. During his term, the bank sold its stake in NSDL e-Governance Infrastructure, Small Industries Development Bank of India (Sidbi) and Clearing Corporation of India (CCIL) to shore up capital.

Jain has served on the boards of Exim Bank and the National Institute of Bank Management, among others. He has also been a part of several committees on the banking sector, including as a secretary to Basant Seth committee on review and revamp of audit system in public sector banks (PSBs) and as a member on a government committee on public interest litigation related to non-performing assets (NPA).

With nearly 30 years’ experience as a career banker, Jain is likely to oversee key departments of banking supervision, non-banking supervision and cooperative banks supervision.

The supervisory department is responsible for the clean-up exercise in the banking system.

Since the retirement of Mundra, the government had conducted two rounds of interviews to choose a new deputy governor.

The government had shortlisted Jain’s name along with State Bank of India managing directors B. Shriram and P.K. Gupta, Uco Bank executive director Charan Singh, skill development and entrepreneurship department secretary K.P. Krishnan, Tamil Nadu principal secretary T.V. Somnathan, and NITI Aayog additional secretary Yaduvendra Mathura.

Somnathan and Jain were the two front-runners for the DG’s post.

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