Mumbai, November 3, 2017

LEI is a 20-digit unique code to identify parties to financial transactions worldwide.

The Reserve Bank of India (RBI) on Thursday directed corporate borrowers having exposure of Rs 5 crore and above to mandatorily obtain 20-digit Legal Entity Identifier (LEI). The move is aimed at improving risk management in the wake of the huge stressed assets in the banking system.

Listing the timeline for implementing the LEI, the RBI said borrowers with fund and non-fund exposure of Rs 1,000 crore and above will have to get the unique code by March 31, 2018. Those having exposure between Rs 500 crore and Rs 1,000 crore have to obtain the LEI code by June 30 and those having between Rs 100 crore and Rs 500 crore by March 31, 2019.

LEI is a 20-digit unique code to identify parties to financial transactions worldwide.

Borrowers with bank credit between Rs 50 crore and Rs 100 crore have been given time to comply with LEI provision by December 2019. “It has been decided that the banks shall advise their existing large corporate borrowers having total exposures of Rs 50 crore and above to obtain LEI,” the RBI said in a notification.

The RBI said a separate roadmap for borrowers having exposure between Rs 5 crore and up to Rs 50 crore would be issued in due course. Borrowers who do not obtain LEI as “per the schedule are not to be granted renewal/enhancement of credit facilities”, the central bank said.

Legal Entity Identifier India Limited, a wholly-owned subsidiary of the Clearing Corporation of India, acts as a local operating unit (LOU) for issuing globally compatible legal entity identifiers (LEIs) in India. LEI is a global reference number that uniquely identifies every legal entity or structure that is party to a financial transaction, in any jurisdiction. LEIL will assign LEIs to any legal identity including but not limited to all intermediary institutions, banks, mutual funds, partnership companies, trusts, holdings, special purpose vehicles, asset management companies and all other institutions being parties to financial transactions.

Entities can obtain LEI from any of the local operating units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF) – the entity tasked to support the implementation and use of LEI, the RBI said.

[The Indian Express]