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Mon 24 Jun 2019 10:22 AM

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Deputy governor of India's central bank resigns

Viral Acharya made headlines last October when he strongly argued for independence of RBI at a time when the government and the central bank were at loggerheads

Deputy governor of India's central bank resigns
While it is not known as yet who will succeed Acharya, banking sources expected that it will be an external candidate.

Viral Acharya, the high profile and controversial deputy governor of India’s central bank, Reserve Bank of India, has quit his position 6 months ahead of the end of his tenure.

"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," Yogesh Dayal, chief general manager, RBI, said in a statement 

"Consequential action arising from his letter is under consideration of the competent authority," the RBI statement added.

Acharya made headlines last October when he strongly argued for independence of RBI in a public speech at a time when the government and the central bank were at loggerheads over various issues, including the extent of RBI’s reserves.  

Acharya is set to return to the US to resume his academic duties at New York University’s Stern School of Business. Acharya is a CV Starr Professor of Economics at Stern School of Business.

Opposed cut

As part of the 6-member Monetary Policy Panel (MPC) of RBI, Acharya had opposed the move on rate cuts by the central bank in two of its policy review meetings early this year.

In the last Monetary Policy Committee meeting on June 4, he, however, went along with other members for a 25 basis cut in repo rate.

Acharya is said to have submitted his resignation few weeks prior to the last MPC meeting on June 4.

Acharya’s resignation from RBI came 6 months after his mentor, and then RBI governor Urjit Patel resigned in controversial circumstances. Patel’s decision to quit the central bank's governorship came after months of sparring with the federal finance ministry over a host of issues, mainly related to the central bank’s autonomy.

In fact, Acharya’s public speech, arguing for the autonomy of RBI, had the support of Urjit Patel, according to the out-going deputy governor’s own submission at that time.

Acharya, who joined RBI as a deputy governor in January, 2017 was supposed to end his term next year, after completing three years in this role.

While it is not known as yet who will succeed Acharya, banking sources expected that it will be an external candidate.

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