Indiabulls Housing Finance Limited (IHFL) has appointed former RBI deputy governor Subhash Sheoratan Mundra as its non-executive chairman — a strategic move that many believe signals that the financial services entity has not abandoned its quest for a banking licence after being stonewalled by a vicious campaign last year to undermine its credentials.

Mundra will replace Sameer Gehlaut, the founder of the Indiabulls group, who resigned as the executive chairman of IHFL with immediate effect.

In a regulatory filing to the stock exchanges after market hours, Indiabulls Housing Finance said Gehlaut has been re-designated as the non-executive, non-independent director of the company.

The company said Gehlaut resigned as he wanted to focus more on the group’s financial services firm — Indiabulls Ventures —which is into consumer lending that includes personal loans, asset reconstruction and the capital market business.

Last October, the RBI had rejected a proposal to merge Indiabulls Housing Finance with troubled Tamil Nadu-based Lakshmi Vilas Bank, following allegations that money worth thousands of crores were siphoned off by Gehlaut and the directors. Subsequently, the petitioner who had approached the Supreme Court alleging the misappropriation of funds withdrew the plea made against Gehlaut.

At a board meeting on Wednesday, Gehlaut informed the board he has taken up the position of chief executive officer of Indiabulls Ventures Ltd. “Gehlaut proposed the name of Mundra for the position of non-executive chairman of the company. The board of directors of the company unanimously agreed with the suggestion made by Gehlaut and appointed Mundra as the non-executive chairman with immediate effect,” the company said.

Gehlaut has been leading the company for over 20 years since its inception in January 2000.

Observers who track IHFL believe there could much more to the appointment of Mundra: the company may still be preparing for a banking licence, albeit at a later date, even as it improves its corporate governance.

Analysts said the appointment of the new chief could see the company taking several steps which include improving its asset quality. After the IL&FS crisis, players such as Indiabulls Housing Finance have faced difficulties in accessing finance at attractive rates.

Gehlaut’s resignation comes at a time both banks and non-banks are witnessing the adverse impact of the Covid-19 pandemic in the form of a fall in loan disbursals and a fear of a rise in bad loans once the moratorium given by the RBI ends this month.

Amid such circumstances, analysts say, the presence of a seasoned banker such as Mundra is positive for the company.

Mundra was the RBI deputy governor till July 2017. Earlier, he was the chairman and managing director of Bank of Baroda and executive director of Union Bank of India.

“The company has taken significant strides over the years under Gehlaut, and the board appreciated his desire to engage in another phase of institution building,” Mundra said after his appointment.

“Indiabulls Housing has a committed management team, and it has done a good job in navigating the present challenging times. I look forward to now working even more closely with the management team, especially with the confidence that the board and the management is committed to keep striving to deliver strong business growth with high standards of governance backed by strong risk management practices,’’ Mundra said.