Acharyas Departure: RBI Union Moots Collegium To Select Central Bank Heads

The All India Reserve Bank Employees Association (AIRBEA) has expressed anguish over the ‘premature departure’ of Viral Acharya, the ‘youngest and most articulate’ Deputy Governor of the Reserve Bank of India.

Acharya is demitting office soon, much ahead of the expiry of his term, said Samir Ghosh, General Secretary, AIRBEA. This has given rise to many conjectures over the exact reason why he has chosen to quit.

“He has cited personal reasons, but that does not tell the whole story. He nursed deep and prolonged differences with the Finance Ministry over the issue of autonomy and independence of the Reserve Bank,” Ghosh added.

Acharya’s successor is to be appointed soon. Section 8 of the Reserve Bank of India Act, 1934 states the Governor and Deputy Governors (not more than four) are to be ‘appointed by the Central Government’.

The AIRBEA has been pleading with various parliamentary committees that appointments to such important positions with the central bank of the country must not be left to a few Finance Ministry officials.

“It should ideally be left to a collegium of experts comprising former governors, other prominent central bankers and economists who can judge the competence, knowledge and experience of incumbents being considered for the posts.”

Only this can ensure neutrality as well as independence and autonomy of the Central Bank and prevent undesirable political interference or otherwise in such nominations, Ghosh said.