Viral Acharya resigns: The member of Indian central bank's monetary policy panel and a government critic quits before his term ends to return to US


  • Viral Acharya, member of India's monetary policy panel, has quit to go back to teaching at New York University.
  • Acharya has quit six months before his three-year term ends at RBI.
  • Acharya had earlier said that curbing the RBI’s independence as ‘potentially catastrophic’
An outspoken top cat from India’s central bank, Viral Acharya, has quit to go back to teaching at New York University. He had cited ‘unavoidable personal reasons’ for his resignation, six months before his three-year term ends at Reserve Bank of India (RBI).

"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. Consequential action arising from his letter is under consideration of the Competent Authority," the RBI statement said.

This is the third high-profile person to unexpectedly quit from the RBI since the Narendra modi government came to power. Former RBI Governor Urijit Patel too left before his term ended, making him the first governor since 1990s to do so. His predecessor Raghuram Rajan’s term too was not extended, and he chose to teach at Chicago Booth School of Business.

This youngest ever member of RBI since liberalization in India, had earlier stirred the hornet’s nest by pointing out government’s pressure on the banking regulator. In November last year, Acharya said that curbing the RBI’s independence could be ‘potentially catastrophic’. This was after a pre-election government had asked the regulator to relax lending restrictions on a few banks. This trimming of regulatory powers had not gone down well with NYU-educated Acharya, who also worked there.

Acharya also believes, according to one of his papers, that state-owned banks are in a better position than private sector banks, in spite of their weak financials. This is because state-owned banks have better access to government guarantees.

Poor man’s Rajan

Acharya had famously called himself ‘Poor man’s Raghuram Rajan’ after the former RBI head who had paved the way for modernization in the banking system by allowing payment banks. Acharya is extremely well known in economic circles for his sharp and holds-no-barrel opinions on the economy. He has also co-authored papers with Rajan.

In one of his papers, Acharya had said that myopic governments default less often but also tax in a manner which makes the country vulnerable to defaults in the future.

Economy is not the only thing that Acharya is famous for. This boy from South Mumbai and an IIT engineer was also part of the premier institution’s cricket team. He also composed a music album called ‘Yadoon ke Silsile’, and also plays at a band in an Indian film music band in New York and New Jersey.

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