The resignation of the Reserve Bank of India's deputy governor has raised fresh concerns about the independence of the central bank.
Viral Acharya, the deputy governor of the RBI and a staunch defender of the central bank's need to act autonomously of the government, said on Monday he was quitting his role six months ahead of the end of his term. Mr Acharya simply cited “unavoidable personal reasons”. But speculation has been rife that the move is connected to his vocal disapproval of what he considered to be government meddling with the RBI's work.
Mr Acharya had “ruffled feathers” and his views were “not in alignment with the approach of the government regarding the RBI”, said Sujan Hajra, a former RBI director, who is currently the chief economist at Anand Rathi, a financial services firm based in Mumbai.
“Mr Acharya’s departure is not a complete surprise, as frictions between him and the government on issues related to central bank independence had come to the fore,” wrote Sonal Varma, the chief India economist at Nomura, in a research note.
It was Mr Acharya who last year sparked a bitter and unprecedented public row between the RBI and the government. In October, he delivered a scathing speech in Mumbai in which he said that undermining a central bank's autonomy could have “catastrophic” consequences.
“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,” he said at the lecture.
Mr Acharya was also concerned about pressure on the RBI to release its surplus reserves to the government.
A dispute ensued over the following weeks which saw the RBI and the government battle over other issues including the bad debt crisis in the country's banking sector and providing access to liquidity to non-banking financial companies.
That row culminated in the resignation of the then RBI governor, Urjit Patel, who cited “personal reasons” as he stepped down.
“Mr Acharya’s resignation strikes a more than passing resemblance to the shock departure of Urjit Patel,” said Shilan Shah, the chief India economist at Capital Economics. He added that this once again “raises questions over the RBI’s credibility and its inflation-fighting credentials”.
Analysts say that Mr Acharya's departure should pave the way for further interest rate cuts by the RBI. When it comes to monetary policy, Mr Acharya is “a hawk”, which means he veers towards keeping interest rates on the higher side in order to control inflation. The minutes of the latest monetary policy committee meeting, held earlier this month, reveal that although Mr Achraya voted for the 25 basis point rate cut, he also raised concerns about the upside risk to inflation. In the previous two meetings, he was one of the two members who voted against the rate cuts.
The government is vocal about wanting the RBI to trim rates because this can help boost a slowing economy by bringing down borrowing costs, which encourages businesses to expand and consumers to spend using credit.
There are widespread worries about the economy after official data revealed that India's GDP growth slowed to a five-year low of 5.8 per cent in the first three months of this year.
But following Mr Acharya's departure, Mr Shah said that the RBI now “has its work cut out to convince markets and investors that it remains focused on stabilising inflation close to the 4 per cent target”.
Meanwhile, Mr Hajra believes that, going forward, it is not in the “economic interests” of the country to fight such battles in public.
“Rather than voicing their opinions in an open forum, it is imperative that both government, as well as the RBI, share these opinions in closed door meetings,” he said.
“Otherwise if there is a difference of opinion and that gets public, that creates credibility problems both for the central bank, as well as for the government.”
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
UAE currency: the story behind the money in your pockets
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Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
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Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
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Company profile
Name: Back to Games and Boardgame Space
Started: Back to Games (2015); Boardgame Space (Mark Azzam became co-founder in 2017)
Founder: Back to Games (Mr Azzam); Boardgame Space (Mr Azzam and Feras Al Bastaki)
Based: Dubai and Abu Dhabi
Industry: Back to Games (retail); Boardgame Space (wholesale and distribution)
Funding: Back to Games: self-funded by Mr Azzam with Dh1.3 million; Mr Azzam invested Dh250,000 in Boardgame Space
Growth: Back to Games: from 300 products in 2015 to 7,000 in 2019; Boardgame Space: from 34 games in 2017 to 3,500 in 2019
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
More from Rashmee Roshan Lall
Getting there
The flights
Emirates and Etihad fly to Johannesburg or Cape Town daily. Flights cost from about Dh3,325, with a flying time of 8hours and 15 minutes. From there, fly South African Airlines or Air Namibia to Namibia’s Windhoek Hosea Kutako International Airport, for about Dh850. Flying time is 2 hours.
The stay
Wilderness Little Kulala offers stays from £460 (Dh2,135) per person, per night. It is one of seven Wilderness Safari lodges in Namibia; www.wilderness-safaris.com.
Skeleton Coast Safaris’ four-day adventure involves joining a very small group in a private plane, flying to some of the remotest areas in the world, with each night spent at a different camp. It costs from US$8,335.30 (Dh30,611); www.skeletoncoastsafaris.com
Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
UAE currency: the story behind the money in your pockets
