RBI NOTIFICATIONS

INTRODUCTION OF LEGAL ENTITY IDENTIFIER FOR LARGE CORPORATE BORROWERS 

WHAT IS AN LEI? 

 The Legal Entity Identifier (LEI) is a global reference number that uniquely identifies every legal entity or structure that is party to a financial transaction, in any jurisdiction 

 It is a unique 20 digit alphanumeric code that is assigned to a legal entity 

WHAT IS THE LEI IMPORTANT? 

 The global LEI system has been set up by regulatory authorities, including G20 and the Financial Stability Board, to address the global financial crisis 

 The LEI is designed to enable the identification and linking of parties to financial transactions in order to manage counter party risk 

 Its goal is to improve measuring and monitoring of systemic risk and support more costeffective compliance with regulatory reporting requirements

ISSUING AUTHORITY 

 Entities can obtain their LEI code from Legal Entity Identifier India Ltd.(LEIL) 

 The LEIL is a wholly owned subsidiary of Clearing Corporation India Ltd. 

 LEIL is accredited by the Global Legal Entity Identifier Foundation (GLEIF) and recognised by RBI as issuer of LEI under the Payment and Settlement Systems Act, 2007 

 Apart from the LEIL, any local operating unit accredited by GLEIF can issue LEI numbers. 

 After obtaining LEI code, banks shall also ensure that borrowers renew the codes as per GLEIF guidelines.

RBI'S DECISION

  It has been decided to require banks to make it mandatory for corporate borrowers having aggregate fund-based and non-fund based exposure of Rs. 5 crore and above from any bank to obtain Legal Entity Identifier (LEI) registration and capture the same in the Central Repository of Information on Large Credits (CRILC) 

 This will facilitate assessment of aggregate borrowing by corporate groups, and monitoring of the financial profile of an entity/group. 

 This requirement will be implemented in a calibrated, but time-bound manner.