RBI introduces identification number to track large value transactions
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The Reserve Bank of India on Tuesday said legal entity identifiers will be mandatory for all fund transfecs worth Rs. 50 crore and above. The LEI is a 20-digit number used to uniquely identify parties involved in financial transactions world over.
LEI numbers of the beneficiaries and remitters must be included on all payment transactions of value Rs. cr made via the Real Time Gross Settlement (RTGS) and National Electronic
The RBI scrutiny follows a probe by the Enforcement Directorate, which has filed a money laundering case on the basis of first information reports registered by police against instant loan apps connected to overseas jurisdictions.
The idea of LEI, a 20-digit unique code to identify parties to financial transactions worldwide, was conceived in the aftermath of the 2008 global financial crisis in a bid to improve financial data systems and strengthen risk management capabilities.
LEI was introduced by the Reserve Bank in a phased manner for participants in the over the counter (OTC) derivative and non-derivative markets as also for large corporate borrowers.
According to the guidelines, all non-individual entities conducting fund transfers worth ₹50 crore and above should secure LEI numbers from Legal Entity Identifier India Ltd. Additionally, banks facilitating these large value transactions for their customers must also maintain records.
Introduction of the LEI for all transactions above ₹50 crore will help banks and regulators track large value transactions more closely. The LEI code can be obtained from local operating units accredited by the Global Legal Entity Identifier Foundation, which supports and implements the use of LEI. In India, the code can be obtained from Legal Entity Identifier India Ltd, a subsidiary of RBI-recognized Clearing Corporation of India Ltd.
LEI numbers of the beneficiaries and remitters must be included on all payment transactions of value Rs. cr made via the Real Time Gross Settlement (RTGS) and National Electronic
The RBI scrutiny follows a probe by the Enforcement Directorate, which has filed a money laundering case on the basis of first information reports registered by police against instant loan apps connected to overseas jurisdictions.
The idea of LEI, a 20-digit unique code to identify parties to financial transactions worldwide, was conceived in the aftermath of the 2008 global financial crisis in a bid to improve financial data systems and strengthen risk management capabilities.
LEI was introduced by the Reserve Bank in a phased manner for participants in the over the counter (OTC) derivative and non-derivative markets as also for large corporate borrowers.
According to the guidelines, all non-individual entities conducting fund transfers worth ₹50 crore and above should secure LEI numbers from Legal Entity Identifier India Ltd. Additionally, banks facilitating these large value transactions for their customers must also maintain records.
Introduction of the LEI for all transactions above ₹50 crore will help banks and regulators track large value transactions more closely. The LEI code can be obtained from local operating units accredited by the Global Legal Entity Identifier Foundation, which supports and implements the use of LEI. In India, the code can be obtained from Legal Entity Identifier India Ltd, a subsidiary of RBI-recognized Clearing Corporation of India Ltd.
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