The government on Tuesday named Michael Debaprata Patra as the Deputy Governor of the Reserve Bank of India (RBI). The appointment of Patra, who is as of now an official executive at the central bank, comes about six months after previous agent senator Viral Acharya’s pre-mature resignation. Patra will serve as the delegate representative for three years from the time of his appointment. The date of Patra’s appointment has not been indicated, however.

Acharya had surrendered in July 2019, six months before the end of his tenure. In spite of the fact that Acharya had cited unavoidable reasons for his acquiescence, it was broadly conjectured that he ventured down due to RBI’s spat with the government over different issues such as overflow reserves to the Centre, standards for classification of non-performing resources and inflation-focused interest rates.

After his speech ‘Ongoing Challenges in Maintaining Independence of the Reserve Bank of India’ in October 2018, Acharya’s exit was broadly expected. In his speech, Acharya had emphatically censured the government’s impedances within the working of RBI that denied the controller of its freedom. Acharya had underlined requirement for independence of central banks to oversee public-sector moneylenders.

Acharya said that one critical impediment that the central bank faces is that it is statutorily restricted in undertaking the complete scope of activities against public-sector banks (PSBs) – such as resource divestiture, substitution of administration and board, permit repudiation, and determination activities such as mergers and deals. The apex bank exercises these powers viably within the case of private banks.

He also said that the Governments that did not respect their central bank’s independence, sooner or a while later, bring around the outrage of financial markets, touch off budgetary fire and come to lament the day they undermined the regulatory institution.

After Acharya’s speech, Governor Urjit Patel had surrendered in December 2018 in the midst of clashes with the Centre. Patel’s exit activated new concerns over issues between the government and the RBI. The Reserve Bank right now has three delegate governors–NS Vishwanathan, BP Kanungo and MK Jain. Patra will be the fourth among the appointee governors. Shaktikanta Das is the senator of RBI.

Credits: Reuters