RBI Issues Directive for Unique Code for Big Corporate Borrowers

Banking News

Business Mantra News

  • Reserve Bank of India has sent directive to all Banks for compulsorily issuing Unique 20 digit Code Legal Entity Identifier (LEI) for all big corporate borrowers with exposure more than Rs.5.00 Crores.
  • This shall help in improving the risk management of the borrowing companies.
  • After 2008 Global Crisis, the idea of identification of big corporate borrowers with unique 20 digit LEI was thought of to create data bank and improve risk management among the companies.
  • RBI has directed the Banks not to renew the credit facilities without the obtaining LEI within a stipulated time.
  • This directive is applicable on the corporate borrowers as well as their sister concerns, subsidiaries and associates.
  • LEI has to be obtained from the Global Legal Entity Identifier Foundation as the same implements use of LEI with the help of RBI sponsored Clearing Corporation of India’s whole time subsidiary Legal Entity Identifier India Ltd.
  • RBI has issued directions making four categories of corporate borrowers.
  • Borrowers having exposure of Rs.1000 Crores or more have to obtain LEI till 31-03-2018 and between Rs.500 Crores and less than Rs.1000 Crores till 30-06-2018.
  • Borrowers between Rs.100 Crores and Rs.500 Crores, LEI have to be obtained till 31-03-2019 and between Rs.50 Crores to Rs.100 Crores till 31-12-2019.
  • All borrowers between Rs.5.00 Crores to Rs.50 Crores shall have to wait till RBI issues directions for issuance of LEI.

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