Published: Mon, June 24, 2019
Markets | By Otis Pena

RBI Deputy Governor Viral Acharya quits citing 'unavoidable personal reasons'

RBI Deputy Governor Viral Acharya quits citing 'unavoidable personal reasons'

Mumbai: Reserve Bank of India (RBI) deputy governor Viral Acharya who made an earnest case for autonomy for the banking sector regulator, quit six months ahead of the scheduled end of his deputation.

In fact, the most recent round of tension between the government and the RBI culminating in the abrupt resignation of former RBI Governor Urjit Patel, was signalled in a speech by Acharya after the government sought consultations with the RBI under Section 7 (a provision rarely used) of the RBI Act, which allows the government to give directions to the central bank in public interest. "Frictions between him and the government on issues related to central bank independence had come to the fore", said Nomura in a note on Monday.

Viral Acharya had joined the RBI in 2017.

On Monday, the RBI said Acharya had resigned for personal reasons.

According to a report in Business Standard, Acharya, who was in charge of monetary policy, will return to New York University as an economics professor in August instead of February 2020.

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The rift surfaced after Deputy Governor Viral Acharya in a hard-hitting speech pitched for "effective independence" of the central bank. Earlier in December 2018, governor Urjit Patel had resigned almost nine months before the end of his scheduled term.

In his last monetary policy committee minutes, Acharya wrote: "Why do old men wake so early?" The government is expected to overshoot the budget deficit target previously set for the current fiscal year, three officials warned, as a slowing economy creates a big shortfall in tax collections and prompts new stimulus plans.

Acharya had joined the central bank on January 23 a year ago after Patel was elevated to the post of governor in September 2016.

India's benchmark 10-year bond yield was down just 1 basis point at 6.85% by 1110 GMT after earlier falling to a low of 6.81 percent.

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