RBI extends Legal Entity Identifier for larger borrowers of NBFCs and UCBs

The Reserve Bank on Thursday extended the guidelines on Legal Entity Identifier LEI to large borrowers of NBFCs and Primary Urban Co-operative Banks UCBs.On a review, it has been decided that the guidelines on LEI stand extended to Primary Urban Co-operative Banks UCBs and Non-Banking Financial Companies NBFCs, the RBI said in a notification.

The Reserve Bank on Thursday extended the guidelines on Legal Entity Identifier (LEI) to large borrowers of NBFCs and Primary (Urban) Co-operative Banks (UCBs).

On a review, it has been decided that the guidelines on LEI stand extended to Primary (Urban) Co-operative Banks (UCBs) and Non-Banking Financial Companies (NBFCs), the RBI said in a notification. It is further advised that non-individual borrowers enjoying aggregate exposure of Rs 5 crore and above from banks and financial institutions (FIs) shall be required to obtain LEI codes as per the given timeline.

As per the timeline, the borrowers having exposure of Rs 25 crore are required to obtain LEI by April 30, 2023. 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.

Borrowers who fail to obtain LEI codes from an authorized Local Operating Unit (LOU) shall not be sanctioned any new exposure nor shall they be granted renewal/enhancement of any existing exposure, it said. However, departments/agencies of Central and State Governments (not Public Sector Undertakings registered under Companies Act or established as Corporation under the relevant statute) shall be exempted from this provision, it said.

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