Viral Acharya: A common man’s central banker

Be it bad loans resolution or his uncanny focus on inflation fighting which earned him criticism of being a policy hawk, Acharya was at the centre of it all and deftly steered the policy machinery.

A rare ability to understand a problem, find solutions for it, and convince all others to rally along were the key qualities that defined deputy governor Viral Acharya’s short stint at the Reserve Bank.

As the youngest deputy governor, Acharya now 45, has dealt with the most technical of the subjects, but never let go of an opportunity to show his connect with the common man.

A few months after taking over in January 23, 2017, Acharya bumped into a very senior Union minister on the sidelines of a social do in the city and the conversation revealed his persona.

Taking Acharya to be like any other US-returnee, the minister explained the pomp associated with Ganesh festivities and how people will be celebrating the immersion processions the next day.

“Sir, I am from Girgaum and I have danced all the way till Chowpatty in such processions,” he quipped nonchalantly.

The city boy, however, had to cut short his stay and chose to return to the New York University’s Stern School of Business citing personal reasons.

His last day will be July 23 as per an RBI statement on Monday.

During the brief period at the Mint Road, Acharya left a deep imprint on central bank policymaking.

Be it bad loans resolution — the topic of his first speech in the city as also much of his work — or his uncanny focus on inflation fighting which earned him criticism of being a policy hawk, Acharya was at the centre of it all and deftly steered the policy machinery.

In the last policy meeting, Acharya took refuge in Ernest Hemingway’s melancholic lines before going with the majority view of cutting the rates for the third time, displaying a rare quality.

Quoting Santiago the old fisherman in the novel, Acharya expressed his melancholy in voting with the majority: “It is better to be lucky. But I would rather be exact. Then when luck comes, you are ready.”

He always spoke his mind on “sensitive” issues like central bank’s independence at the peak of RBI’s differences with the government.

This was the first time anybody at RBI went public with the differences, which included the purportedly excess capital reserves that the RBI was accused of sitting on.

In his most vocal speech on October 26, 2018 speech, Acharya, while delivering the AD Shroff memorial lecture, warned of compromising growth, financial stability and possible retribution by financial markets if the central banks are undermined by government, leading to a strong retort from the then economic affairs secretary Subhash Chandra Garg.

“The rupee is trading at less than 73 to a dollar, Brent crude below $ 73 a barrel, markets up by over 4 per cent during the week and bond yields below 7.8 per cent. Wrath of the markets?” Garg tweeted later.

In the same speech, the deputy governor had flagged appointment of a government official or a person associated with the government as one of the prime ways of compromising the central bank’s autonomy.

It was not a surprise that speculation about him quitting started within minutes of his boss Urjit Patel calling it quits on December 10, 2018. This was, however, officially denied.

Acharya gave a dressing down to bankers seeking help in the face of spike in bond yields which would impact treasury operations, calling such interventions by the RBI as “steroids” which are better avoided.

Public speaking by RBI’s key executives dwindled during much of his term, but he ensured that every speech that he delivered was taken note of as he presented frank, and often difficult to digest, opinions.

“I am a relatively simple guy and I try to understand things from first principle,” he said, delivering a TED talk.

The engineer-turned-economist’s talks were often peppered with common man’s examples, his expectations from policymakers and what we need to do deliver on those.

More than once, the IIT-B grad used such “vignettes” like the view from his terrace in suburban Mumbai or seeing a child at a busy traffic junction, not just to show his empathy, but also to make the audience understand the root of a problem.

After taking up the job at the Mint Road, he chose not to settle into his posh official residence in the upmarket south Mumbai, instead chose to live with his family members in suburban Vile Parle, though it made a difficult commute to the Mint Road every.

Usually, mornings were for a game of tennis on way to work, while post-work, he was known to unwind with music, especially old Hindi songs, where he displayed his talent for singing a few tunes very well.

Probably, what he hummed while donning the policymaker’s hat was enjoyed widely, it wasn’t music to all.

Photograph: PTI Photo

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