Reserve Bank of India (RBI) deputy governor Viral Acharya, the lone man or\nthe last man in RBI, who often batted for central bank’s independence from both\ninside and outside quarters has reportedly called it a day.<\/p>\n\n\n\n
This is the second top level exit after the governor Urjit Patel, also an\neconomist who held the monetary policy department under governor Raghuram\nRajan, left in a huff in December last year over serious differences with\ngovernment-appointed directors on the issue of bank’s independence. <\/p>\n\n\n\n
Deputy governor Acharya , a professor of economics who teaches at a US\nuniversity, joins the growing list of economists leaving the government. Arvind\nPanagariya, Raghuram Rajan and Arvind Subramanian had earlier left for reasons\nnot very convincing. In fact, the youngest economist Acharya’s exit is a jolt\nto government as it comes quite close to former chief economic advisor Arvind\nSubramanian’s hard-hitting research paper that says that the India’s GDP (gross\ndomestic product) between 2011-12 and 2016-17 was probably overstated by about\n2.5 per cent. <\/p>\n\n\n\n
Acharya, who joined the RBI as deputy governor (in charge of monetary\npolicy) in January 2017 has always been frank about his views. The 45-year old\nsurprised the market in October last year when he made his views public on\ndifferences between RBI and the government. He made a powerful speech lamenting\nthat the government did not respect central bank’s independence (with historic\nexamples) and would sooner or later incur the wrath of financial markets,\nignite economic fire and come to rue the day they undermined the regulatory\ninstitution. Acharya was speaking on the “importance of independent\nregulatory institution – the case of the central bank, at the A D Shroff\nMemorial lecture in Mumbai. <\/p>\n\n\n\n
The timing of the speech was apt and the RBI and government-appointed\ndirectors were locked in a battle on a number of issues ranging from transfer\nof surplus capital, relaxation for weak banks, restructuring package for MSMEs\nand lowering the stiff capital adequacy norms that were to kick in soon. A week\nbefore Acharya gave his speech, the RBI had a marathon board meeting where both\nsides had serious differences. <\/p>\n\n\n\n
Clearly, Acharya’s hard-hitting speech had blessings of then governor Patel.\nIn fact, Acharya mentioned in footnotes of the speech that he was grateful to\ngovernor Patel for his suggestions to explore the theme “central bank\nindependence”.<\/p>\n\n\n\n
Acharya’s speech hit the nail on the head. A debate started on the central\nbank’s independence. A month after Acharya’s speech, Patel exited the bank\nciting personal reasons. Acharya, however, stayed on but it was clear that he\nwould be uncomfortable in the new regime. <\/p>\n\n\n\n
Going by public documents such as the minutes of the monetary policy\ncommittee (MPC), it seemed obvious that Acharya had a different line, as he\noften disagreed with views of the new governor Shaktikanta Das. In two of the\nlast three MPCs, Acharya voted for status quo in the policy rates because of\nthe emerging risk to inflation and likely fiscal slippages. In the June MPC\nmeeting, Acharya once again flagged off the risk of fiscal slippages in the\nlight of balance sheet borrowings of the government. “These borrowings\nhave now reached between 8 to 9 per cent of GDP. This is at a level similar to\nthat in 2013 at the time of the ‘taper tantrum’ crisis,” he wrote.<\/p>\n\n\n\n
Hope someone else in the government or in other institutions take over from Acharya to air dissenting views as openly as he did to keep the debate on Complaint Management System (CMS):<\/strong> Reserve Bank of India (RBI) deputy governor Viral Acharya, the lone man or the last man in RBI, who often batted for central bank’s independence from both inside and outside quarters has reportedly called it a day. This is the second top level exit after the governor Urjit Patel, also an economist who held the […]<\/p>\n","protected":false},"author":13,"featured_media":2841,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[64],"offerexpiration":[],"class_list":["post-2840","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs-articles","tag-reserve-bank-of-india-current-affairs"],"_links":{"self":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/2840","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/comments?post=2840"}],"version-history":[{"count":2,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/2840\/revisions"}],"predecessor-version":[{"id":3418,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/2840\/revisions\/3418"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/media\/2841"}],"wp:attachment":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/media?parent=2840"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/categories?post=2840"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/tags?post=2840"},{"taxonomy":"offerexpiration","embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/offerexpiration?post=2840"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
CMS is a software application<\/strong> launched by RBI for lodging complaints <\/strong>against any regulated entity with public interface<\/strong> such as commercial banks, urban cooperative banks (UCBs), Non-Banking Financial Companies (NBFCs). CMS is also provided with various dashboards which will help RBI to effectively track progress in redressal of complaints.
It is expected that the CMS will maintain trust and sustain the confidence of consumers in the banking system and other financial service providers (FSPs)<\/strong>, prompt and effective grievance redressal mechanism together with customers empowerment through education is a must. <\/p>\n","protected":false},"excerpt":{"rendered":"