RBI circular on Introduction of Legal Entity Identifier for Large Value Transactions

The Reserve Bank of India (“RBI”) on 05th January 2021 issued a circular introducing the Legal Entity Identifier (LEI), which is a 20-digit number used to uniquely identify parties to financial transactions worldwide.

RBI has decided to introduce the LEI system for all payment transactions of value of Rs.50 crore and above undertaken by entities (non-individuals) using the Central Processing System run by RBI – Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT).

Member Banks who participate in RTGS and NEFT and who undertake large value transactions of Rs.50 crore and above, have been advised to:

  • obtain the LEI in time, if they don’t already have one;
  • include remitter and beneficiary LEI information in RTGS and NEFT payment messages;
  • maintain records of all transactions of Rs.50 crore and above through RTGS and/or NEFT.

Entities can obtain LEI from any of the Local Operating Units accredited by the Global Legal Entity Identifier Foundation, which is the body tasked to support the implementation and use of LEI. In India, LEI can be obtained from Legal Entity Identifier India Ltd. (LEIL) (https://www.ccilindia-lei.co.in), which is also recognised as an issuer of LEI by the Reserve Bank under the Payment and Settlement Systems Act, 2007.

To read the full RBI circular, please click on the link.

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