The Centre appointed Viral Acharya, a professor of New York University, as one of the four deputy governors of Reserve Bank of India (RBI) for a three-year term.
The post of deputy governor, looking after the monetary policy department, fell vacant with the elevation of Urjit Patel as Governor in early September.
The date when Mr. Achayra will assume office was not specified in a notification issued by the Department of Personnel and Training. The Appointment Committee of the Cabinet has approved the move, according to the notification.
Mr. Achayra was chosen from over 100 candidates as the Centre, for the first time, advertised for the post of a deputy governor of the central bank.
The central bank has four deputy governors, of which two are from promoted from within the ranks of RBI. Among the other two, one is a commercial banker while the other is an economist.
Mr. Acharya, C.V. Starr Professor of Economics in the Department of Finance at the New York University (NYU) Stern School of Business, was an alumni of the prestigious Indian Institute of Technology, Bombay and has co-authored a few research papers with former RBI governor Raghuram Rajan.
“That was the day when I realised if I have Raghu (Raghuram Rajan) as my role model and even I hit 5 per cent or 10 per cent of his ability, I can easily pass off as poor man’s Raghu Rajan,” Mr. Acharya once said on a lighter vain while recollecting how once his co-passenger a flight called him ‘Raghu Rajan’ after seeing his notes containing words like ‘crisis’ and ‘banks.’
In all probability, Mr. Acharya will be given the task of handling the monetary policy department, which is now looked after by R. Gandhi, after Mr. Patel took over as governor.
Mr. Acharya is more a corporate finance economist and not a macro economist like his predecessors like Mr. Patel or Subir Gokarn.
According to NYU Stern School of Business website, his research interests are in the regulation of banks and financial institutions, corporate finance, credit risk and valuation of corporate debt, and asset pricing with a focus on the effects of liquidity risk.
Mr. Acharya, a strong votary of central bank independence, comes at a time when RBI is facing criticism for losing its autonomy over the demonetisation issue which is driven by the Centre, though the central bank’s board have its stamp. In an interview to a Bloomberg in June this year, after Mr. Rajan decided not to seek a second term, he termed the Centre’s move to use RBI as piggy bank to avoid deterioration in fiscal deficit as ‘opaque and devious.’
“Setting a precedent to compromise central bank risk management for public-sector bank recapitalization could lead to repeat and more devious interventions that over time could be perceived as an attack on central bank independence,” he had said in the interview.
