Ex-RBI deputy governor Kanungo may join IIFL board

Synopsis

Former RBI Deputy Governor BP Kanungo is set to join IIFL Finance as an independent director, succeeding AK Purwar. This appointment follows a period where the RBI had banned IIFL Finance from disbursing gold loans due to regulatory non-compliance, a ban that was later lifted. Kanungo's expertise is expected to bolster IIFL's risk management and governance.

Mumbai: Former Reserve Bank of India deputy governor BP Kanungo is slated to join IIFL Finance as an independent director.

The nomination committee of the Nirmal Jain-promoted non-banking finance company has proposed Kanungo's name for the post, multiple people privy to the information said.

The development comes about a year after the central bank banned IIFL Finance from sanctioning and disbursing gold loans for non-compliance with regulations. The ban, placed in early March 2024, was lifted in mid-September 2024 after the company took corrective actions to address the RBI's concerns.

Kanungo will replace former State Bank of India chairman AK Purwar, who served IIFL as an independent director for about 16 years. His appointment will be for five years, people cited above said.

IIFL did not respond to ET's request for comments.

Kanungo, who joined RBI in 1982, was appointed as deputy governor in 2017 for three years when Urjit Patel was the RBI governor. Later, he was given a one-year extension till April 2021. Currently, he is an independent director at Bharat Pe and chairman of Shriram Life Insurance.

Kanungo will bring with him expertise on implementing a robust risk management framework, fine-turning core lending business to mitigate risk and helping IIFL improve its governance structure, people cited above said.

IIFL, which appointed KPMG to conduct an independent compliance audit, has taken steps to strengthen its governance framework after RBI's action.

IIFL's gold loan assets under management (AUM) doubled in six months after the RBI lifted the embargo to ₹21,022 crore as of March 31, 2025. However, the ban impacted the earnings as its net profit fell 79% year on year to ₹378 crore for FY25.

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