The Reserve Bank of India's deputy governor, Viral Acharya has resigned. Viral Acharya resigned from his post, citing personal reasons, about six months before the completion of the tenure. For the second time within seven months, any senior officer of the Reserve Bank has submitted his resignation. It is being seen as a major setback for the Reserve Bank of India.
Appointment was made for three years
Earlier, in December 2018, RBI Governor Urjit Patel also resigned from his post. Viral Acharya was one of the senior officials of RBI, who was considered to be part of Urjit Patel's team. Viral Acharya was inducted into the RBI team for the three year term on January 23, 2017.
Emergency post has been vacant after promotion
In December 2018, RBI Governor Urjit Patel had resigned nine months before the completion of the term due to differences with the government. After being promoted as Governor in September 2016, Viral Acharya was associated with Reserve Bank of India on January 23, 2017.
Governors do not Agree in Policy Matters
During the review of the monetary policy from the last two times, the opinion of Virenal Acharya was a bit different on both economic development and inflation. At the recent monetary policy meeting, RBI governor Das and deputy governor Viral Acharya could not agree on the financial losses. According to the news, there was a difference between the ruling Das and Viral Acharya emerging in the central bank's monetary policy review meeting before the announcement of new interest rates in early April.
The ruling das were in favor of cutting the repo rate for economic development. At the same time, Viral Acharya had warned the banks about it. At the end of the meeting, six members of the committee decided to cut the repo rate with a majority of 4-2.
Urgit Patel was not able to make better synergy
Earlier, the same was said about Governor Urjit Patel, that the government and the RBI were not able to make better coordination, due to which they had to submit their resignation. However, Urjit Patel described his resignation as a completely personal affair.
After the resignation of RBI governor, Opposition targeted the government
There was a lot of discussion in the social media about Urjit Patel's resignation. To target the government, the opposition got an issue. The Opposition's allegation was that the BJP-led National Democratic Alliance government was weakening the autonomy of institutions.
It was alleged that the tension between the government and the banking regulator was increasingly increasing. Earlier, RBI's Deputy Governor, Viral Acharya, had also warned of the "potentially devastating" consequences of such intervention of the government.
On October 26, 2018, Viral Acharya had said that the governments which do not respect the independence of the central bank, soon or late, have to be the victim of Kop Bhajan of financial markets, after which the conflict between the government and the RBI came out openly. went.
The resignation of Viral Acharya can be an indication that there are still some differences between the Reserve Bank and the Government regarding decision making. At present, Rare Acharya was in charge of the financial market regulatory department, among others, in the financial stability unit, monetary policy department, economic and policy research department, financial market operations department.
Chief economic adviser (CEA) Arvind Subramanian had resigned from his post in June 2018 due to family commitments. Finance Minister Arun Jaitley told Subramanian's family commitments through a Facebook post. Arun Jaitley wrote in his Facebook post that the reason for his resignation was private and was very important. I had no choice other than to agree with them.
Prior to joining Modi Government, Subramanyan was a senior associate of Dennis Weatherstone at the Peterson Institute for International Economics and was also a senior associate of the Center for Global Development. In August 2017, Indian-American economist Arvind Pangriya, who had been elected to lead the Commission, was appointed by PM Modi, but as soon as the economy started to go through a change, he resigned from his post.