The Appointments Committee of the Cabinet cleared the appointment for three years.
He is taking over at a time when the central bank is facing criticism for repeated changes in the rules related to deposit and withdrawal of money, post-demonetisation.
Acharya is known for his research in theoretical and empirical analysis of systemic risks of the financial sector, its regulation and genesis in government-induced distortions, according to the profile on the NYU website.
The research areas also span across credit and liquidity risks, agency-theoretic foundations as well as their general equilibrium consequences, it says.
Acharya is is the C V Starr Professor of Economics in the Department of Finance at the New York University Stern School of Business (NYU-Stern).
An alumnus of IIT, Mumbai, with a degree of Bachelor of Technology in Computer Science and Engineering in 1995 and PhD in Finance from NYU-Stern in 2001, Acharya was with London Business School (2001-08) and served as the Academic Director of the Coller Institute of Private Equity at LBS (2007-09) and a Senior Houblon-Normal Research Fellow at the Bank of England (Summer 2008).