MUMBAI: Reserve Bank of India (RBI) deputy governor Viral Acharya has quit his role six months before the end of his tenure, said a report on Monday.

Business Standard reported that Acharya is returning to New York University's Stern School of Business (NYU Stern) in August, instead of February 2020 as CV Starr Professor of Economics.

An email sent to the RBI remained unanswered till the time of publishing this story.

Acharya’s speech on the need for RBI’s independence had made headlines in October last year, when the government and the central bank were at loggerheads over various issues, including the extent of RBI’s reserves. Acharya had stressed the importance of a central bank’s independence and said direct intervention and interference by the government in the operational mandate of the central bank negates its functional autonomy. Many had seen this as Acharya voicing concerns on behalf of the then governor Urjit Patel, who eventually quit a few months later.

Pointing out instances where undermining the central bank’s independence is regressive, Acharya had said it occurs when the government is seen making efforts to dilute the central bank’s policies.

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

"Viral had been discussing about his return to the US in several informal meetings because his family is there," said an RBI board member. "However the board hasn't been apprised as yet. The next board meeting is scheduled on 8 July post budget," he added.

Interestingly, Acharya, who had voted for a pause in the April policy, quoted Ernest Hemingway in his monetary policy committee meeting to explain his stance and vote for a repo rate cut. “How should I vote? I found that I was speaking to myself as Santiago, the old fisherman, in Old Man and the Sea by Ernest Hemingway," he quoted.

“It is better to be lucky. But I would rather be exact. Then when luck comes, you are ready."

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

"RBI is likely to look for an external candidate for Viral's post. Monetary policy is not the domain of the current DGs," said the same board member.

The BS report had also mentioned that NS Vishwanathan, deputy governor in charge of banking regulation, is likely to get an extension for another term.

"I'm surprised to hear about Vishwanathan's term getting extended. He had said that he was keen to move back to Karnataka and had packed most of his stuff," said the same board member.

Published On : 24-06-2019

Source : Live Mint