RBI Deputy Governor Viral Acharya, who was the face of central bank’s Independence, has reportedly resigned six months before the scheduled end of his term.
Acharya, who joined the RBI on January 23, 2017, was youngest deputy governor post-economic liberalisation. He will return to New York University Stern School of Business (NYU Stern) to teach, reported the Economic Times.
Acharya has a PhD in Finance from New York University Stern School of Business in 2001. He also holds B Tech degree in Computer Science and Engineering, from Indian Institute of Technology.
People who know about the development have said Acharya quit a few weeks before the last meeting of the RBI’s monetary policy committee (MPC) earlier this month.
Acharya confirmed his departure from the RBI due to ‘unavoidable personal reasons’. When prodded for further comments, he said, “A schoolteacher once told me: ‘When your work speaks for itself, do not interrupt’”.
Acharya unable to stay back for his full term has been a constant topic of discussion in banking circles after Urjit Patel resigned as governor in December 10 last year. A statement on the central bank’s website on that day said Patel had personal reasons for his absence. He had assumed charge as the 24th governor for three years after Raghuram Rajan’s term ended in September 2016.
The RBI Act clearly states that the central bank can have up to four deputy governors. While one post is meant for a commercial banker (currently M K Jain, former IDBI Bank chief, is holding that post), among the other three, one is typically an economist.
Even though, Acharya maintains that certain unavoidable circumstances were behind his exit, many at RBI believe that his confrontation with the government about autonomy of the apex bank and difference in opinion with Governor Shaktikanta Das were the main reasons.
An evidence of the fast deteriorating relationship between the government and the central bank came days after Acharya delivered the speech, when Subhash Chandra Garg, then economic affairs secretary and a member of the central bank board, tweeted: “Rupee trading at less than 73 to a dollar, Brent crude below $73 a barrel, markets up by over 4 per cent during the week, and bond yields below 7.8 per cent. Wrath of the markets?”
Recently, in a meeting, the monetary policy committee (MPC) witnessed a tiff between the RBI officials Acharya and Shaktikanta Das on the issues of economic growth and inflation.
His exit follows Urjit Patel’s sudden resignation in December last year who stepped down from the position after the central bank’s friction with the Finance Ministry over issues related to autonomy and governance of the central bank.
While Acharya and the RBI have both confirmed his resignation, RBI has said that they do not have any internal communication as of yet.
Acharya was in charge of the Financial Stability Unit, Monetary Policy Department, Department of Economic and Policy Research, Financial Markets Operation Department, Financial Market Regulation Department, among others at the RBI.
