Legal Entity Identifier (LEI)- Corporate Borrowers and OTC Participants

Reserve Bank of India(RBI) has instructed banks to ensure that all their large borrower entities obtain the Legal Entity Identifier in a phased manner. According to the directive all corporate borrowers enjoying fund based and non-fund based credit limits of Rs. 50 Crore and above are required to obtain LEI. Banks are bound to report LEI code to the Central Repository of Information on Large Credits (CRILC). This will enable banks to assess and analyse the aggregate borrowing by the corporate and corporate group. This will lead to more transparency and discipline in financial matters and monitoring will become easy for banks.  

Legal Entity Identifier(LEI)

Legal Entity Identifier is a key measure to improve the quality and accuracy of financial data systems. It was conceived for better risk management post Global Financial crisis.  Global Legal Entity Identifier Foundation (GLEIF), not-for-profit organization, manages the repository of LEIs. GLEIF is based in Basel, Switzerland. GLEIF.  LEI code can be obtained from the Local Operating Unit (LOU) approved by GLEIF and the respective regulator. In India, Legal Entity Identifier India Ltd (LEIIL), a subsidiary of the Clearing Corporation of India Limited (CCIL), has been recognised by the Reserve Bank as LOU

RBI stipulation for corporate borrowers 

RBI had, in its Statement on Developmental and Regulatory Policy dated October 4, 2017, indicated that all borrowers of banks having total fund based and non-fund based exposure of Rs. 5 crore and above would be required to provide LEI in a phased manner. The present announcement is made in tune with said plan. 
Banks are required to advise their existing large corporate borrowers having total exposure of Rs. 50 Cr and above to obtain LEI as per the time schedule announced by RBI. Borrowers who do not submit LEI should not be granted renewal/ enhancement of credit facilities by banks. Direction for borrowers having exposures between Rs. 5 Cr and Rs. 50 Cr would be announced later on. 

Banks should encourage large borrowers to obtain LEI for their parent entity as well as all subsidiaries and associates. Banks should also ensure that the code is renewed every year.

Time schedule prescribed by RBI for obtaining LEI by corporate borrowers

Corporate borrowers have to ensure submission of LEI within the time schedule given below. 

Schedule for implementation of LEI

LEI for OTC participants in derivative markets

Announcement on implementation LEI for the participants in the Over-the-Counter (OTC) markets for Rupee Interest Rate derivatives, foreign currency derivatives and credit derivatives in India was made by RBI on June 1, 2017. All current and future participants would be required to submit the unique LEI code as per time lines indicated below.  Entities without an LEI code would not be eligible to participate in the OTC derivative markets, after the due date. These entities may also obtain LEI code from Legal Entity Identifier India Ltd (LEIIL).

Time schedule announced by RBI for OTC participants to submit LET

OTC participants in derivative markets are required to adhere to the following time line for submission of LEI. 

Schedule for Implementation of LEI for various entities