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RBI mandates unique code for all large corporate borrowers
November 4 , 2017
2364 days
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- The Reserve Bank of India (RBI) has 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.
- LEI is a 20-digit unique code to identify parties to financial transactions worldwide. The code is conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the global financial crisis.
- 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.
- The LEI system was developed by G20 in response to inability of financial institutions to identify organisations uniquely, so that their financial transactions in different national jurisdictions can be fully tracked.
- The first LEIs were issued in December 2012.
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