Vajinath M Gavarshetty has assumed office as the new CEO of crisis-hit Dewan Housing Finance Corporation (DHFL) with effect from 21 November, 2019. Gavarshetty will report to R. Subramaniakumar, the administrator appointed by the Reserve Bank of India.
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 on 1st October. Gavarshetty is the former chief general manager of State Bank of India.
Gavarshetty joins office in the same week in which RBI has superseded the board of the housing finance company and appointed Subramaniakumar as the administrator in its place on account of the governance concerns and defaults by DHFL in meeting various payment obligations. The RBI has also constituted a three-member advisory committee to advise the administrator of DHFL. 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.
Gavarshetty’s appointment comes at a really tough time as the company is staring in the face of bankruptcy. DHFL is one of the biggest defaulters in the country and owes almost Rs 1 lakh crore to its debtors. The housing finance company will become the first financial service provider to face the bankruptcy court under the new bankruptcy rules. Gavarshetty’s appointment comes at a really tough time. In February this year, former CEO Harshil Mehta had resigned from his post.