Reserve Bank of India’s (RBI) Deputy Governor Viral Acharya has quit six months before the end of his term, sources said on Monday.
Acharya is the third top official to quit RBI before completing their term. The first being former RBI Governor Raghuram Rajan and second being former Governor Urjit Patel.
Sources said that Acharya, who joined as the RBI Deputy Governor in January 2017, was against the central bank’s decision on repeated cuts of repo rates to support the government’s public spending and consumption boost measures to tackle the slowing growth.
Acharya viewed such steps as putting fiscal discipline into risk and he did not want to be part of “those decisions”, sources said.
Confirming the development, the RBI said in a statement: “Viral V. 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 RBI beyond July 23, 2019. Consequential action arising from his letter is under consideration.”
Acharya has not commented on the matter yet.
To spur the economy, the RBI had cut repo rate by 25 bps to 5.75 per cent in June while switching to an “accommodative” stance, implying that the central bank is amenable to further cuts.
This is the third time on the trot that the six-member Monetary Policy Committee (MPC) has decided on a 25-basis points rate cut, making it a hat-trick of repo rate cuts.
The rate cut also comes in the backdrop of benign retail inflation. Following the MPC decision, the repo rate now stands at 5.75 per cent against the earlier 6 per cent.
Acharya will be now returning to the New York University’s Stern School of Business in August 2019 instead of February 2020.
The BSE index stood at 39,120, down 72.10 points at 10.17 a.m. on Monday.
With Acharya’s resignation, the RBI is now left with three Deputy Governors — N.S. Vishwanathan, B.P. Kanungo and M.K. Jain.