What are New LEI Guidelines by RBI?

April 23, 2022

The guidelines on Legal Entity Identifier (LEI) for large borrowers of Primary (Urban) Co-operative Banks (UCBs) and Non-Banking Financial Companies (NBFCs) have been extended by the Reserve Bank of India (RBI).

Overview:

The RBI has further advised that any non-individual borrowers enjoying aggregate exposure of Rs 5 crore and more from financial institutions (FIs) and banks will be required to obtain Legal Entity Identifier (LEI) codes.
By 30^th April 2023, the borrowers who have exposure of Rs 25 crore are required to obtain LEI.
Borrowers having a total exposure of Rs 10 crore and up to Rs 25 crore will have to obtain LEI by 30^th April 2024.
Borrowers having a total exposure of over Rs 5 crore and up to Rs 10 crore will have to obtain LEI by 30^th April 2025.
The borrowers who will be failing to obtain LEI codes from an authorized Local Operating Unit (LOU) will not be sanctioned any new exposure and they will also not be granted renewal or enhancement of any of their existing exposures.

What is a Legal Entity Identifier?

It is a 20-digit number that is used to uniquely identify financial transaction parties all over the world. The LEI was conceived as a key measure with the aim of improving the accuracy and quality of financial data systems for the purpose of better managing risk post the global financial crisis.

Who are exempted from this provision?

The agencies and departments of the Central and State Governments (not Public Sector Undertakings that are registered under the Companies Act or established as a Corporation) are exempted from this provision.

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