MUMBAI: Folks at the Reserve Bank of India’s main building in Mumbai may be in for a pleasant surprise coming new-year.You serious central bankers be prepared to receive your new deputy governor who could walk in swinging a guitar in his hands humming mere dil mein aaj kya hai! Viral Acharya , 42, of New York University’s Stern School of Business, has as much music compositions to his name as research papers on systemic financial risk and how banks should be run prudently.Acharya, who has established himself as an authority in the world of financial research and written papers with the likes of former Governor Raghuram Rajan, is a lot more colourful personality than the lifeless central bankers who are stingy with emotions in public.While Rajan brought in flamboyance to the dry RBI , Acharya may probably breathe in some music to the ears of those who in the past month have been talking only about demonetisation. The New York University Professor has composed at least 10 songs including Yadon Ke Silsele – an Ode to Friends, and Kya Yeh Wohi Phir Raat Hai – Passion.Apart from scores of research papers - ranging from `Carry Trade’ of European banks to Sovereign Bonds by governments – his home page sports a photograph playing guitar and lists the songs composed by him. In fact, he makes money out of it too.And the funds raised through music are funnelled into charity – Pratham – which works to educate children.Music composition may be his passion, but conservative economics has been a part of his staple too – with strong advocacy of well capitalised banks, preventing systemic financial risks, and prudent fiscal by governments.His entry into Mint Street would bring in the global perspective.For those who were mourning that Dr Rajan’s banking and finance philosophy followed him to the Chicago University, the entry of Acharya brings it back from the New York University."His thoughts are almost similar to that of Dr Rajan," says Krishnamurthy Subramanian, Professor of Finance at the Indian School of Business, Hyderabad who has written research papers with both. "He knows the moral hazard of government guarantee in banks. He will push for efficient way of running PSU banks."Acharya graduated as a computer engineer from the Indian Institute of Technology, Mumbai with a Presidents medal in 1995 and secured a doctorate in Finance from NYU’s Stern in 2001.After that he was associated with the London School of Business till 2008. He was also the Academic Director at the Coller Institute of Private Equity at LBS between 2007- and 2009, and Senior Houblon- Normal Research Fellow at the Bank of England.He is for the clean-up of the Indian banking system either through adequate capital or by shrinking their assets."Unless Indian public sector banks raise significant capital in the next five years, their balance sheets would have to shrink alarmingly for their capital to remain over the levels mandated by Basel 3 requirements," Acharya wrote in a paper with Subramanian of ISB. "Indian public sector banks pose significantly greater systemic risk to the Indian banking system when compared to private sector banks."Acharya has argued that the clean-up, or the Asset Quality Review of 2015 done by Rajan was a couple of years behind. Also, he believes the government backing of banks provides wrong incentives for poor allocation of resources."The steps that RBI could take would involve pushing through a deposit insurance premium programme that recognises the risk of banks as well as the magnitude of their implicit subsidies, a push for privatization of state-owned banks — and even mergers with healthier private sector banks — and their automatic recapitalization which would restore their incentives to lend and restructure well," Acharya had said.Life may get a bit tougher for those who have been lobbying that the Basel capital norms are stringent and there is a need to ease them. Acharya believes they may not be enough."Current financial regulations, such as Basel capital requirements, are designed to limit each (or representative) institution’s risk seen in isolation," Acharya writes. "They are not sufficiently focused on systemic risk even though systemic risk is often the rationale provided for such regulation. As a result, while individual risks may be properly dealt with in normal times, the system itself remains, or in some cases is induced to be, fragile and vulnerable to large macroeconomic shocks."