By SM.24 Jun, 2019
Viral Acharya, Deputy Governor of the Reserve Bank of India (RBI), has resigned six months before his term ends, say sources. Mr Acharya"s reported resignation comes six months after his former boss Urjit Patel stepped down as governor of the central bank amid speculation of a rift with the government. The development comes at a time the economy is struggling with a five-year-low growth in gross domestic product and less than two weeks ahead of the presentation of the full-year Union Budget by the government in Parliament.
Viral Acharya is returning to the New York University Stern School of Business as an Economics professor in August, the Business Standard newspaper reported. The 45-year-old"s term was scheduled to end in February next.
Michael Patra, executive director at the RBI, and Sanjeev Sanyal, principal economic adviser at the Ministry of Finance, are among possible successors to Viral Acharya, it said.
The RBI had, in December last year, denied speculation about Viral Acharya also leaving early after Urjit Patel resigned as RBI chief.
Patel stepped down as governor in December 2018 amid growing differences with the government over a range of subjects including the central bank"s autonomy. Shaktikanta Das was appointed governor shortly after Mr Patel quit.
That rift between the government and central bank had surfaced earlier in October after Viral Acharya"s candid speech warning that undermining the RBI"s independence could be "potentially catastrophic".
"Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined an important regulatory institution," Acharya had said in the speech that was widely shared on social media.
Viral Acharya, who had three of his fellow deputy governors in the audience, also thanked then RBI Governor Urjit Patel for his "suggestion to explore this theme for a speech," in a show of unity from an institution typically known for its restraint.
Those comments were seemingly triggered over the government reportedly pressuring the central bank to release reserve cash kept in RBI coffers to boost the economy in an election year.
The opposition, which had blamed the government for Urjit Patel"s exit, accusing it of trying to destroy institutions, hit out the centre again. “Govt changes, but issues of Economic Manhandling remain! RBI Dy Guv, Viral Acharya adds his name to the long list of experts who attempted to show the ‘Mirror of Truth" to BJP regime. 4 Economic Advisors,2 RBI Guvs & a Niti Aayog VC has resigned earlier!” Congress spokesperson Randeep Singh Surjewala tweeted.
Acharya was appointed as one of the four deputy governors at the central bank in December 2016, after Urjit Patel was promoted to be the governor.