Viral Acharya, ‘poor man’s Rajan’, is RBI deputy governor

The Reserve Bank of India   | Photo Credit: K.V.S. GIRI

Viral Acharya, a professor from New York University, has been appointed as a deputy governor of the Reserve Bank of India (RBI).

The post of deputy governor that looks after the monetary policy department fell vacant with the elevation of Urjit Patel as RBI governor in early September.

Mr. Acharya will have a three-year term, a notification issued by the Department of Personnel and Training said, without specifying from when the appointment will be effective.

The Appointment Committee of the Cabinet has approved the appointment, the notification said.

Mr. Acharya was chosen from over 100 candidates, as the government, for the first time, advertised for filling up the post of a deputy governor of the central bank.

The RBI has four deputy governor posts, of which two are filled by promotions from within the ranks of the central bank. Among the other two, one post is to be filled by a commercial banker, while the other goes to an economist.

Stellar resume

Mr. Acharya is a C.V. Starr Professor of Economics in the Department of Finance at the New York University (NYU) Stern School of Business. He was also an alumni of the prestigious Indian Institute of Technology – Bombay. He has co-authored a few research papers with former RBI governor Raghuram Rajan.

Viral Acharya.

Viral Acharya.  

“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 that, I can easily pass off as poor man’s Raghu Rajan,” Mr. Acharya once said in a lighter vein. He was recollecting how once his co-passenger in a flight called him ‘Raghu Rajan’ after seeing his notes containing words like ‘crisis’ and ‘banks’.

The monetary policy department is now looked after by R. Gandhi. Interestingly, Mr. Acharya is more a corporate finance economist as opposed to a macro economist like his predecessors like Mr Patel or Subir Gokarn were

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.

The appointment of Mr. Acharya, a strong votary of central bank independence, comes at a time when the RBI is facing criticism for losing its autonomy over demonetisation, an issue that is driven by the government though the central bank’s board has its stamp.

In an interview to Bloomberg last June, after Mr. Rajan decided not to seek a second term, he termed the government’s move to use the RBI a 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 recapitalisation could lead to repeat and more devious interventions that over time could be perceived as an attack on central bank independence,” he said in the interview.

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Printable version | Jun 12, 2021 11:58:10 AM |

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