Introduction of legal entity identifier for large value transactions in centralised payment systems- (Reserve Bank of India) (05 Jan 2021)
MANU/RMIC/0001/2021
Banking
1. The Legal Entity Identifier (LEI) is a 20-digit number used to uniquely identify parties to financial transactions worldwide. It was conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis.
2. LEI has been introduced by the Reserve Bank in a phased manner for participants in the over the counter (OTC) derivative and non-derivative markets as also for large corporate borrowers.
3. It has now been decided to introduce the LEI system for all payment transactions of value Rs. 50 crore and above undertaken by entities (non-individuals) using Reserve Bank-run Centralised Payment Systems viz. Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT).
4. In preparation for the wider introduction of LEI across all payment transactions, member banks should:
i. advise entities who undertake large value transactions (Rs. 50 crore and above) to obtain LEI in time, if they do not already have one;
ii. include remitter and beneficiary LEI information in RTGS and NEFT payment messages (details of the identified fields in the messaging structures of RTGS and NEFT for inclusion of LEI information are at Annex);
iii. maintain records of all transactions of Rs. 50 crore and above through RTGS and / or NEFT.
5. Entities can obtain LEI from any of the Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF), 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.
6. These directions are issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and shall be effective from April 1, 2021.
Tags : INTRODUCTION LEGAL ENTITY IDENTIFIER TRANSACTIONS
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