02 Apr 2020, 09:01 am By Deepa Kunwar
RBI Deputy Governor resigns amid slowdown, 3rd resign in an year

NS Vishwanath an becomes deputy governor of RBI, gets this responsibility for the second time. Viral Acharya's resignation from the post of Deputy Governor of Reserve Bank of India (RBI) has surprised. He has given personal reasons as reason for resignation. But, the resignation that came six months before the term ends, raises many questions. This is the second major resignation from the top post of RBI in the last seven months. Earlier, in December 2018, Governor Urjit Patel resigned from his post. He too resigned about nine months before the end of his term.

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There has been a lot of turmoil in the RBI for the last two and a half years

In fact, the Reserve Bank has seen a lot of upheaval in the last two and a half years. It started with a change in policy making, when the task of fixing the policy rate was given to the six-member committee (Monetary Policy Committee). However, experts described it as a step in the right direction. After this, Urjit Patel abruptly resigned from the post of Governor in December last year. Since then, the speculation of Acharya leaving the post also started. With this lecture, differences between the RBI and the government on various issues were openly exposed. Acharya, who once called himself 'Raghuram Rajan of the poor', also said that if the independence of the central bank is weakened, it can have 'fatal' consequences. Acharya has been in controversies on several occasions raising criticism of the government and the finance department and the issue of autonomy of the central bank.

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Acharya was a strong supporter of central bank independence

Viral Acharya was a strong advocate for the independence and autonomy of the central bank. Acharya believed that RBI independence is necessary for economic progress and financial stability. In October last year, in the AD Shraf Memorial Lecture, he said that the thinking behind the decision making of the government is limited. It is based on political thinking. ‘A few weeks ago Acharya had written a letter to the RBI informing him that he was unable to continue his term of deputy governor after July 23, 2019 due to unavoidable personal reasons,’the central bank said in a brief statement issued on Monday. Acharya was appointed by the Appointments Committee headed by Prime Minister Narendra Modi. Therefore, his resignation will be accepted by the same committee. After Acharya's resignation, now three deputy governors in RBI N. s. Vishwanathan, B.V. P. Kanungo and M.K. Jain is left.