Pain, (pictured) who joins from KPMG, will be head of conduct and regulatory affairs, a new position which RBS chief executive Stephen Hester said “sends a clear message” the bank is determined to clean up its reputation after becoming embroiled in a string of scandals.
RBS was fined £390m for rigging the Libor inter-bank interest rate and has set aside about £3bn for payment protection insurance and interest rate swap mis-selling.
Pain, the former managing director in charge of supervising banks and insurers, left the City regulator in 2011 ahead of the coalition government’s plan to split it into the Financial Conduct Authority and Prudential Regulation Authority.
He joined the FSA in 2008 to head its retail banking division and helped lead the regulator’s reviews of both retail investment advice and residential mortgage lending.
Pain’s new role is similar to the one taken by former FSA chief executive Hector Sants, who joined Barclays in January.