Reserve Bank of India Deputy Governor Viral Acharya has resigned six months before the scheduled end of his term, Business Standard reported on Monday. Acharya resigned a few weeks before the RBI’s monetary policy committee earlier this month.
Acharya, the central bank’s youngest deputy governor since economic liberalisation, told the newspaper that he had resigned because of “unavoidable personal reasons”. When pressed for a detailed comment, he said, “A schoolteacher once told me: ‘When your work speaks for itself, do not interrupt’.”
The Reserve Bank of India issued a statement hours after the report surfaced. “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,” the statement said. “Consequential action arising from his letter is under consideration of the Competent Authority.”
Acharya’s resignation has been speculated upon in banking circles since former RBI Governor Urjit Patel quit the bank on December 10. According to the RBI Act, the central bank can have four deputy governors. One of the posts is usually for an economist, who is in charge of monetary policy. Before Acharya, Urjit Patel held the position. Patel’s predecessors were Subir Gokarn, Rakesh Mohan, and YV Reddy.
Though Acharya was tasked with leading the central bank’s monetary policymaking, his primary focus till Patel’s resignation was the banking crisis.
Meanwhile, Deputy Governor N Vishwanathan is likely to stay back for another term, even though his tenure is due to end in the first week of July, the news report said.
Last October, Viral Acharya created a storm when he made remarks that were indicative of differences between the central bank and the Union finance ministry. He had warned that undermining a central bank’s independence could be “potentially catastrophic”, and said governments that do not respect it sooner or later incur the wrath of financial markets.
Acharya joined the Reserve Bank of India on January 23, 2017, for a three-year term. He is expected to return to New York University Stern School of Business in August as the CV Starr Professor of Economics.