Arul Kanda Kandasamy is set to continue as 1MDB president and chief executive, a source has confirmed.

The source said negotiations to have his term extended had been finalised. The source, however, could not confirm the tenure of the extension.

Arul Kanda's tenure was supposed to end on Dec 31, 2017 after he was appointed in January 2015 to turn around the state investment fund.

The corporate bigwig was executive vice-president and head of investment banking at Abu Dhabi Commercial Bank before he took on the job as 1MDB president and chief executive.

The Royal Military College alumnus graduated with a law degree in 1998 from the London School of Economics and Political Science and a master's degree from University College London two years later.

Arul Kanda also served as a non-independent non-executive director of RHB Investment Bank Bhd from July 2009 to May 2011.

Among others, the year-long arbitration involving billions between International Petroleum Investment Company (IPIC) and 1MDB finally reached a settlement in April this year, under Arul Kanda's leadership.

IPIC was supposed to receive US$1.2 billion in two equal payments on July 31 and Dec 31.

1MDB, however, paid up the first tranche of payment to IPIC on Aug 30.

The US$1.2 billion repayments are believed to be for the US$1 billion loan plus interest which IPIC gave to 1MDB in 2015 to cover the default red interest payment on bonds. The bonds were guaranteed by IPIC and 1MDB.

Meanwhile, the source confirmed that 1MDB is expected to pay the second tranche of payment it owes to IPIC soon.

"It is very much the plan to get it paid on or before Dec 31," said the source.