Introduction of Legal Entity Identifier for Cross-border Transactions
Reserve Bank of India (RBI) has introduced the use of Legal Entity Identifier (LEI) for Cross border transactions to improve the quality and accuracy of financial data. LEI has been introduced by the Reserve Bank in a phased manner for participants in the over the counter (OTC) derivative, non-derivative markets, large corporate borrowers and large value transactions in centralised payment systems. Now RBI has decided that AD category I banks shall be obligated to ask for LEI code from the entities involved in undertaking capital account and current account transactions of Rs. 50 crores and above under Foreign Exchange Management Act, 1999 from October 1, 2022 onwards. However, in case of non-resident counterparts/ overseas entities not having LEI information, AD Category I banks may process the transactions to avoid disruptions.
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 RBI under the Payment and Settlement Systems Act, 2007.
