The former managing director of supervision for the Financial Services Authority will report directly to Stephen Hester, group chief executive of RBS, in what is a newly created role.
Mr Pain, who led the regulator’s supervisory action to restructure, recapitalise and strengthen the banking sector, will be a member of the group executive committee with responsibility for oversight of conduct and compliance globally across all RBS divisions.
He will also be in charge of managing RBS’ relationships with regulators.
Mr Pain has more than 30 years of experience working across the banking industry, most recently as partner for financial services with KPMG.
He will take up his new role at RBS in August this year.
Stephen Hester, chief executive of RBS, said: “I am delighted that we have recruited someone of Jon’s experience to this new and important role.
“The creation of this position sends a clear message about how we want to do business - serving customers well, completing our return to a safe and conservative risk profile, and generating sustainable returns for shareholders.
“If we achieve these objectives, and do so in the right way, RBS will become a really good bank. Jon will be an excellent addition to the management team and I look forward to working with him when he takes up the position.”