New Delhi: Former Deputy Governor of Reserve Bank of India Viral Acharya has alleged that former Governor Urjit Patel left his post due to efforts to curtail the autonomy of the central bank. Viral Acharya’s book Quest is a collection of his speeches, research and observations as a member of RBI’s Monetary Policy Committee (MPC) to restore financial stability in India.
In the book, he said that the government wants the institution to reduce the Promotive Corrective Action (PCA) norms, transfer the additional capital to the Treasury, relax the defaulters and formulate a policy to help them borrow more, but such Section 7 of the RBI Act was never used to do.
He also said that excessive monetary and credit incentives caused the Indian financial sector to lose its stability, adding: “The RBI’s attempt to change the governance structure of RBI to institutionalize such outcomes in the future surpassed the Rubicon.” There will be more failure. . As a result, the RBI lost its governor at the altar of financial stability. “
Acharya stepped down before his term ended in 2019. However, he said Tusli was “a regulator fighting for a sound and prudent banking system and a government that started on the right track but backed down due to fiscal profiteering and lobbying pressure.”
He said that “the government was persecuting the autonomy of the regulator, backing down on prudential measures and making unreasonable demands which led to Patel resigning in 2018”.
