RBI vide circular “Introduction of Legal Entity Identifier for Large Value Transactions in Centralised Payment Systems” (RBI/2020-21/82 DPSS.CO.OD No.901/06.24.001/2020-21) dated 5th January 2021 has decided to introduce the LEI system for all payment transactions of value INR 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). The circular will be effective from April 1, 2021.
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.
From April 1, 2021, it will be mandatory to include remitter and beneficiary LEI information while initiating RTGS and NEFT transaction. We are working on the required changes in our online banking channels and file formats for uploads, etc and will share the necessary operational details in due course.
The circular states that “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 recognized as an issuer of LEI by the Reserve Bank under the Payment and Settlement Systems Act, 2007”.