The Reserve Bank of India (RBI) made Legal Entity Identifier (LEI) mandatory for cross-border transactions for capital or current account transactions of Rs 50 crore and above, from October 1 next year. The LEI is a 20-digit number used to uniquely identify parties to financial transactions worldwide to improve the quality and accuracy of financial data systems.
The identifier norm has been introduced 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. Starting October 1, 2022, banks will have to obtain the `LEI` number from the resident entities (non-individuals) undertaking any capital or current account transactions. For LEI holders, it would be mandatory to furnish the number in all transactions irrespective of the transaction size.
Important takeaways for all competitive exams:
- RBI 25th Governor: Shaktikanta Das; Headquarters: Mumbai; Founded: 1 April 1935, Kolkata.