By Prarthana Mitra
The government on Monday named IDBI Bank CEO and former Indian Bank head M K Jain as the fourth deputy governor of the Reserve Bank of India.
The announcement comes a few days after speculations floated regarding a possible mega-merger between IDBI and three other banks, and was immediately followed by IDBI Bank shares hitting a two-week low.
The illustrious career of RBI’s new deputy chief
Jain will step into the shoes of S.S. Mundra whose retirement in 2017 left the seat vacant for nearly a year. Known as the turnaround king, banks under Jain’s able supervision have largely shown promising metrics despite financial hardships.
IDBI Bank which has been struggling with heavy losses and bad loans for the last three fiscal years, during his term, was able to identify areas of cost reduction and revenue maximisation under a rigorous and dynamic turnaround strategy. After RBI initiated prompt corrective action (PCA) and implemented restrictions on IDBI’s corporate lending and expansion, Jain divested of the bank’s stakes in NSDL e-Governance Infrastructure, Small Industries Development Bank of India (SIDBI) and Clearing Corporation of India (CCIL) to conserve capital.
This was after the Centre swapped the chief executives of Indian Bank and IDBI Bank in April 2017. In 2016-17, when most public sector banks were grappling with bad loans, Indian Bank which was then headed by Jain, stood as a notable exception for suffering the lowest loan defaulters.
Besides, Jain has also served on the boards of Exim Bank and the National Institute of Bank Management, played a crucial role in revamping the audit system in public sector banks, and was also a member on a government committee on public interest litigation related to non-performing assets (NPA).
Selected after two rounds of interviews with shortlisted candidates, Jain was the frontrunner among officers of private and foreign banks and even bureaucrats including Tamil Nadu principal secretary T.V. Somnathan, SBI managing directors B. Shriram and P.K. Gupta, UCO Bank executive director Charan Singh, skill development and entrepreneurship department secretary K.P. Krishnan, and NITI Aayog additional secretary Yaduvendra Mathura.
Jains successful track record is thus expected to bear positive results for the apex bank, where he will now be in charge of the supervisory department for a tenure of three years. With over 30 years of experience in commercial banking and a firm grasp on risk management, Jain will oversee banking, non-banking as well as corporative banking supervision at RBI.
Prarthana Mitra is a staff writer at Qrius