Vajinath Gavarshetty joins DHFL as CEO; to report to RBI appointed administrator

Crisis-hit Dewan Housing Finance Corporation (DHFL) on Friday said newly appointed CEO Vajinath M Gavarshetty has assumed his office with effect from 21 November, 2019. Gavarshetty will report to R. Subramaniakumar, the administrator appointed by the Reserve Bank of India.

On October 1, DHFL had appointed Gavarshetty as the new CEO on the recommendations of the core committee of lenders as well as the firm's internal committee. Gavarshetty is the former chief general manager of State Bank of India.

Earlier on Wednesday, the RBI superseded the board of the housing finance company and appointed Subramaniakumar as the administrator in its place in wake of governance concerns and defaults by DHFL in meeting various payment obligations. DHFL is one of the biggest defaulters in the country that owes almost Rs 1 lakh crore (over $14 billion) to its debtors.

Also Read: RBI takes over DHFL board; R Subramaniakumar appointed as administrator

In a fresh development, the RBI on Friday constituted a three-member advisory committee to advice the administrator of DHFL, ahead of referring the troubled mortgage lender to a bankruptcy court.

IDFC First Bank's Non-Executive Chairman Rajiv Lall, ICICI Prudential Life Insurance's Managing Director and Chief Executive N S Kannan, and mutual funds' association AMFI's Chief Executive N S Venkatesh would be part of the panel, the RBI said.

Also Read: DHFL crisis: Why depositors may still get part of their money back

DHFL will become the first financial service provider to face the bankruptcy court under the new bankruptcy rules. On November 15, the corporate affairs ministry had notified these rules to deal with resolution of financers apart from banks.

Reacting to the news, DHFL shares closed 4.96 per cent higher at Rs 22.20 apiece on the Bombay Stock Exchange on Friday.

Edited by Chitranjan Kumar