RBI Deputy Governor Viral Acharya quits

Viral Acharya, deputy governor of the Reserve Bank of India, resigned six months before his term ends. Acharya, who was in charge of monetary policy, will return to New York University as an economics professor in August instead of February 2020.

He took office at the RBI in January 2017 for a three-year term. His departure follows Urjit Patel’s sudden resignation in December last year amid rising tension between the central bank and the government about the RBI’s independence. Shaktikanta Das was appointed governor shortly after Patel quit, with the RBI reversing its tight monetary policy stance since then.

A spokesman for the RBI said that he was unaware of the development. He was the youngest deputy governor post economic liberalisation.

His resignation comes days after the latest monetary policy meeting, wherein Acharya had differed strongly with Governor Das on the state of the fiscal deficit. While Das had said that it was unfair to club the borrowings of state-run enterprises into the state of fiscal deficit, Acharya asserted that the borrowing requirement of PSUs matter to the overall deficit.

 

In October 2018, Acharya’s speech on the need for RBI’s independence had hit the headlines.

In the over 90-minute long speech, Acharya, who was in charge of the monetary policy department, warned of the wrath of the markets if the autonomy of a central bank is compromised. He had explicitly said he had the backing of former RBI governor Urjit Patel for making the speech.

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