Deputy governor of RBI Viral Acharya has resigned 6 months before term ends

Deputy governor of  RBI Viral Acharya has resigned from his post six months before his term ends.

Viral Acharya will be returning to New York University Stern School of Business in August instead of February 2020. While RBI is yet to issue an official statement confirming the same, inside sources have confirmed that Acharya has resigned.

According to reports, Acharya had put down his papers just a few weeks before the last meeting of RBI’s Monetary Policy Committee.

Viral Acharya, who was appointed as the RBI deputy governor by government on January 23, 2017 for a three-year term, had earlier raised concern over the importance of RBI’s independence in October 2018.

At the time, the RBI and government had been engaged in a cold tussle over various issues, especially on decisions pertaining to use of RBI’s excess reserves.

The RBI under former governor Urjit Patel was reluctant in releasing excess funds–something that the government had pitched in the middle of a liquidity crisis due to a collapse of the shadow-banking or non-banking financial companies  sector.

However, niether Urjit Patel nor Viral Acharya was happy with the government’s alleged intervention into key decision-making of the RBI. A few months later in December, Urjit Patel resigned from his post.

Earlier, he had said in public that the government was trying to dilute the central bank’s policies and warned about the consequences citing examples of other world economies.

Acharya’s resignation could be an indication that some differences still continue to exist between the apex bank and government in terms of decision making.

Even after Urjit Patel’s exit, Acharya continued to strongly voice his differences with new RBI governor Shkatikanta Das over slow growth and inflation. Acharya had voted for a pause in during the April MPC but a decision was taken to further cut key lending rates.

Commenting on the reports of Acharya’s resignation, independent RBI director Satish Marathe said, “I heard that viral acharya has resigned. Media should read too much into it or speculate, the academic season starts now so he might have opted to go before his term gets over.”

Marathe added, “He was outspoken and spoke his mind what he felt right for rbi and for the country, doesn’t mean he had issues here.”

 

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