Viral Acharya unable to continue as deputy governor beyond July 23: RBI
New Delhi: In a surprise move, Reserve Bank Deputy Governor Viral Acharya has resigned from his position at the central bank merely six months ahead of the scheduled end of his three-year term, citing personal reasons.
This is the second high-profile exit from the Reserve Bank of India (RBI) in the last seven months. Earlier in December 2018, Governor Urjit Patel had resigned nearly nine months before the end of his scheduled term.
"A few weeks ago, Dr. Acharya submitted a letter to the RBI informing that due to unavoidable personal circumstances, he is unable to continue his term as a Deputy Governor of the RBI beyond July 23, 2019," RBI said in a short statement on Monday.
Consequential action arising from his letter is under consideration of the competent authority, it said.
Since Acharya was appointed by Appointments Committee of the Cabinet headed by Prime Minister Narendra Modi, the resignation would also be accepted by the panel.
With Acharya quitting, the RBI will be left with three deputy governors N S Vishwanathan, B P Kanungo and M K Jain.
Acharya, CV Starr Professor of Economics, Department of Finance, New York University Stern School of Business, was appointed RBI Deputy Governor for three years in December 2016. He joined the RBI in January 2017.
He had joined the central bank at a time when it was facing criticism for repeated changes in the rules related to deposit and withdrawal of money, post-demonetisation.
Acharya was looking at the monetary and research cluster at the Reserve Bank.
As an independent minded economist, Acharya had on several occasions courted controversy by criticising the government and the finance ministry and raising the question of central bank's autonomy.
Last year in October, while delivering A D Shroff Memorial Lecture, he had said that the horizon of government's decision making was short and driven by political considerations.
This lecture brought in open the differences between RBI and the government on various issues.
Acharya, who once called himself the ''poor man's Raghuram Rajan'', had also said undermining RBI's independence can trigger a crisis of confidence in capital markets and that attrition of central bank powers results in attrition of its human capital and deterioration of its efficiency and expertise over time .
The Reserve Bank has gone through a tumultuous time in the past two and half years, starting with a change in policymaking where rate-setting shifted to a six member panel that experts commended as a step in the right direction, to the surprise resignation of Governor Urjit Patel in December 2018.
Speculation about Acharya's exit had started on the day of his boss' resignation