This story is from June 24, 2019

RBI deputy governor Viral Acharya quits citing personal reasons: 10 things to know

Reserve Bank of India (RBI) deputy governor Viral Acharya has decided to step down six months before the scheduled end of his three-year term. This is the second high-profile exit in the past seven months after former RBI chief Urjit Patel resigned abruptly in December last year. Speculation about Acharya's exit had started on the day of Patel's resignation, forcing the RBI to deny it then.
RBI deputy governor Viral Acharya quits citing personal reasons: 10 things to know
Viral Acharya (File photo)
Key Highlights
  • This is the second high-profile exit in the past seven months after former RBI chief Urjit Patel resigned abruptly in December last year
  • Speculation about Acharya's exit had started on the day of Patel's resignation, forcing the Reserve Bank to deny it then
NEW DELHI: Reserve Bank of India (RBI) deputy governor Viral Acharya has decided to step down six months before the scheduled end of his three-year term. This is the second high-profile exit in the past seven months after former RBI chief Urjit Patel resigned abruptly in December last year. Speculation about Acharya's exit had started on the day of Patel's resignation, forcing the RBI to deny it then.
Here are 10 things to know about Acharya:
1.
Acharya had joined the RBI on January 23, 2017, after Patel was elevated to the post of governor in September 2016. With his exit, the central bank is now left with three deputy governors N S Vishwanathan, B P Kanungo and M K Jain.

2. He took over at a time when the RBI was facing criticism for repeated changes in the rules related to deposit and withdrawal of money, post-demonetisation (note ban).
3. "A few weeks ago, 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 central bank stated. "Consequential action arising from his letter is under consideration of the competent authority," it added.

Here's the RBI statement:
RBI statement

4. His resignation would also mean that the RBI is likely to be more dovish over monetary policy and willing to cut interest rates as Acharya, who is in charge of departments that look at monetary policy and exchange rate markets, had been regarded as more of an inflation hawk, economists said.
5. Acharya blew the lid off the tensions between the Narendra Modi government and the RBI in a scathing speech in October last year. Defending the need for central bank independence, Acharya made public disputes with the government over issues ranging from lending curbs, more cash availability to the non-banking finance companies (NBFCs), to who controls the RBI's reserves.

6. "Governments that do not respect central banks independence will sooner or later incur the wrath of financial markets, ignite economic fires, and come to rue the day they undermined an important regulatory institution; their wiser counterparts who invest in central bank independence will enjoy lower costs of borrowing, the love of international investors, and longer life spans," he had said in the October 26, 2018 speech delivered in Mumbai.
7. Although Acharya has not announced his plans yet, it is expected within RBI that he will be returning to Academia. Sources in RBI believe that the timing of his resignation might have to do with coinciding with the academic year in the US where he has a family.

8. He is understood to have communicated his intention to step down to RBI governor Shaktikanta Das who in turn informed the finance ministry. The governors and deputy governors are appointed directly by the government, with the governor having a say in the selection of his deputies. Of the four deputy governors, two are selected from within RBI, one from the commercial banking sector and the fourth an economist.
9. Acharya was an exceptional governor in more ways than one. At 42, he was among the youngest to take on such a senior position. A computer engineer from IIT Mumbai with a President’s medal in 1995, Acharya had secured a doctorate from NYU. An avid musician, in New York he had brought out a CD of songs composed by him the proceeds of which went to charity.
10. He was called as the "poor man's Rajan", over the many similarities with the former RBI governor Raghuram Rajan, had also warned of a talent crisis at a central bank if its independence is seen to be compromised.
(With agency inputs)
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