Reserve Bank of India (RBI) Deputy Governor Viral Acharya, following former governor, Urjit Patel’s footsteps, citing personal reasons has resigned from his position six months before the end of his term.
Officials attribute Acharya’s resignation to his differences with Governor Shaktikanta Das on inflation issues and repo rate reduction in monetary policy reviews earlier this year. Speculations are rife that the deputy governor did not expect his term to be renewed as he had supported the former governor. Officials said Acharya had also supported Patel in 2018 in the disagreements with th egovernment.
In October of 2018, as per The Hindu, Acharya had created a controversy by strongly alluding to the encroachment on autonomy of the central bank by the government. He had strongly voiced his opinions on critical matters and stood his ground in regards to independence of the central bank. Furthermore, in a speech, Acharya had said that governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, and ignite economic fire. He had also said that ‘a government’s horizon of decision-making is rendered short like the duration of a T20 match’ as there are always upcoming elections of some sort. “A central bank plays a test match, trying to win each session but importantly also survive it so as to have a chance to win the next session.”
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 and much more. He will be returning to New York University to take up CV Starr Professorship of Economics.