Viral Acharya: Is he the next Raghuram Rajan in making?
The RBI has four deputy governors. The deputy governors are official directors of RBI. These four posts are filled by promotions from within the ranks of the central bank. Among the other two, one post is to be filled by a commercial banker, while the other goes to an economist.
Viral Acharya is the latest big thing in the Indian banking industry after being appointed as the deputy governor of RBI at a young age of 42 years only. He is presently looking after the monetary policy, corporate finance, budget & financial market operations, economic policy and research etc. Many have found similarities in this young central banker with the Rockstar governor of RBI, Mr. Raghuram G Rajan who demitted office in September 2016. Being a cricketer, poet and singer apart from the central bank job, he quite fits in that segment as well. He has been given the charge for next three years starting from January 20. Prior to this, Acharya was with New York University’s Stern School of Business as a professor.
Decoding Viral Acharya, the next big thing in Indian banking
Viral Acharya has many things in common with Dr. Rajan making him the worthy successor of the erstwhile governor of the central bank. The similarities do not end at the point that both have attended IIT but it goes back to New York as well where both of them had taught and studied.
- IIT is the common link between the two: Both the current deputy governor and the former governor had attended IIT in the early days of their careers. Whereas Rajan was a pass-out from IIT Delhi, the other is an alumnus of IIT Mumbai. Both have an Engineering degree in their kitty.
- Both have links to New York: While Dr. Rajan had taught at the University of Chicago at Booth School of Business, this young gentleman has been associated with the University of New York’s Stern School of Business. Before that, Acharya has also been associated with London School of Business.
- Both support the idea that Assets quality is important: Dr. Rajan is somewhat infamous in the banking circle for initiating the Asset Quality Review exercise in banks that resulted in several banks declaring a loss in the 2015-16 financial year. Acharya is a supporter of the same but according to him; this was a minimum of two years behind the schedule.
- Acharya has interests other than banking as well: Though Rajan is known as the rock star governor, it is Acharya who can be termed that especially since he has an album to his credit. He plays the guitar as well. The colourful personality he is, he also has a soft corner for underprivileged children. Mr Viral Acharya has been the founder Chairman of Pratham Foundation and also has served as its chairman.
- Both support the need of capitalization of banks: Mr Rajan and Viral Acharya are of the view that banks in India should be well capitalised in order to function properly. He is not a supporter of government running the show in the banking sector.
- He has co-authored papers with Rajan: Both Rajan and Viral Acharya have worked with each other on various subjects as they have published papers together. Both have two seminar papers to their credit.
- Both have achieved a lot in a young age: While Mr Rajan has been the youngest governor of the central bank of India, Mr Acharya has achieved the distinction of being the youngest deputy governor of the Apex bank of the country. It may be that he turns out to be the youngest governor in the history of RBI once his tenure ends as Dy. Governor at the central bank.
Both Raghuram Rajan and Viral Acharya are strictly against extreme government interference in the banking sector of the country. It is widely regarded that Acharya is going to take over as the governor of RBI in the near future if he manages well with the government. For the time being, RBI has really got its first ever musician governor who may bring some music to the serious corridors of the Apex bank in Mumbai.