Patra, who applied for the post in 2017, is among the rare insiders to be appointed to the post.

Michael Patra appointed as RBI Deputy Guv 6 months after Viral Acharyas resignation
Money RBI Tuesday, January 14, 2020 - 13:14

Nearly six months after Viral Acharya resigned as the RBI deputy Governor, the apex bank finally appointed Executive Director Micheal Patra to the post.

Michael Debabrata Patra has been appointed for three years, according to a statement by the Appointments Committee of the Cabinet. Patra replaced Acharya, who left office on July 23.

Patra will take over as the fourth Deputy Governor at the Reserve Bank of India. He will likely take over the monetary policy portfolio handled by Acharya. He will also be in the all important monetary Policy Committee that takes decisions on the rate of interest.

Patra was one of the candidates who was interviewed by the Finance Ministry panel that included Banking and Finance Secretary Rajeev Kumar and he appears to have steered clear of Prime Ministers' office as well.

A career central banker who applied for the post in 2017, Patra is among the rare insiders to be appointed to the post.

The post has traditionally gone to an economist outside the central bank. Prior to Acharya, it was held by Urjit Patel, who was later elevated to the post of Governor.

Since Governor Shaktikanta Das took office in December, Patra has voted for three successive rate cuts. Aside from monetary stimulus, he also says that the economy needs fiscal support and has broadly been in line with the consensus when rate cuts or status quo were maintained.

Acharya resigned in June 2019, after he differed with the RBI’s stand on many key issues. His resignation did not come as a surprise, and came after tensions between the RBI and the government, which earlier led to the resignation of RBI Governor Urjit Patel.

Among the most prominent and controversial issues between RBI and government where he was involved included the demand that the central bank shell out more dividend, which was strongly opposed by Acharya.

In a speech in October 2018, Acharya cited the example of the Argentinian central bank governor, who resigned after the country's government raided the central bank's balance sheet. "Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined an important regulatory institution," Acharya had cautioned.

After Patel resigned in December 2018 and Shaktikanta Das took over as Governor, the RBI cut its repo rate thrice. Acharya had voted against the cut two out of three times.

With IANS inputs

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