Viral Acharya, professor at New York University’s Stern School of Business, will take over as deputy governor of the Reserve Bank of India (RBI) for three years, effective January 20.
Though the RBI traditionally has four deputy governors, one post has been vacant since Urjit Patel, who was deputy governor, became governor three months ago. He will look after the Monetary Policy and Research cluster, which was under Urjit Patel before his elevation as Governor.
As in-charge of monetary policy, he will become a part of the six-member interest-rate setting monetary policy committee. Currently, the monetary policy function is being looked after Deputy Governor R Gandhi, who will retire on January 20.The post of deputy governor in charge of monetary policy is given to economists of repute and in most cases, holders of the office have been lateral entrants.
Viral Acharya grew up in South Mumbai, in a family of medical practitioners. A BTech in Computer Science and Engineering (1991-1995) from IIT-Bombay and a PhD Finance (1996–2001), from the Stern School of Business, Acharya has written two research papers, ‘Sovereign Debt, Government Myopia and the Financial Sector’ and ‘The Internal Governance of Firms’, with ex-Governor Raghuram Rajan.
He is also a strong proponent of bad bank, or a bank created to hold bad assets of banks, something that Rajan opposed while at RBI.
The research interests of Acharya, who once called himself the ‘poor man’s Raghuram Rajan’, include 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 risks.