LEGAL ENTITY IDENTIFIER
Reserve Bank of India has made Legal Entity Identifier (LEI) code mandatory for all market participants, other than individuals.
LEI:
• It is a 20 character global reference number conceived by G20 that uniquely identifies every legal entity or structure that is party to a financial transaction, in any jurisdiction.
• Internationally LEI is implemented and maintained by Global Legal Entity Identifier Foundation through Local Operation Units (LOU) established by each country independently and voluntarily.
• LEI information is publicly available free of charge and It is reviewed, updated and validated annually by LOUs.
• In India entities can obtain LEI from Legal Entity Identifier India Ltd (LEIL) (only LOU of India), subsidiary of The Clearing Corporation of India Ltd, recognized by RBI under Payment and Settlement Systems Act, 2007.
Need and benefits of LEI in India:
• Monitoring debt: Banks are now required to acquire LEI
number from the borrower and report it to Central Repository of Information on Large Credit. A consolidated data under LEI mechanism will help banks to monitor debt exposure of corporate borrowers and also prevent multiple loans against the same collateral, thus helping reduce NPAs
• Money Laundering: Global financial transactions are difficult to track. However, LEI being a unique global identifier, making it mandatory for all transactions regulated by RBI will help identifying the entity party to the transaction easily and accurately.
• Tool for RBI: To gain better insight into corporate actions (particularly M&A activity).
• Other benefits: LEI will improve internal data flow and risk monitoring processes and allow the industry to meet regulatory reporting requirements while minimizing costs.
Reserve Bank of India has made Legal Entity Identifier (LEI) code mandatory for all market participants, other than individuals.
LEI:
• It is a 20 character global reference number conceived by G20 that uniquely identifies every legal entity or structure that is party to a financial transaction, in any jurisdiction.
• Internationally LEI is implemented and maintained by Global Legal Entity Identifier Foundation through Local Operation Units (LOU) established by each country independently and voluntarily.
• LEI information is publicly available free of charge and It is reviewed, updated and validated annually by LOUs.
• In India entities can obtain LEI from Legal Entity Identifier India Ltd (LEIL) (only LOU of India), subsidiary of The Clearing Corporation of India Ltd, recognized by RBI under Payment and Settlement Systems Act, 2007.
Need and benefits of LEI in India:
• Monitoring debt: Banks are now required to acquire LEI
number from the borrower and report it to Central Repository of Information on Large Credit. A consolidated data under LEI mechanism will help banks to monitor debt exposure of corporate borrowers and also prevent multiple loans against the same collateral, thus helping reduce NPAs
• Money Laundering: Global financial transactions are difficult to track. However, LEI being a unique global identifier, making it mandatory for all transactions regulated by RBI will help identifying the entity party to the transaction easily and accurately.
• Tool for RBI: To gain better insight into corporate actions (particularly M&A activity).
• Other benefits: LEI will improve internal data flow and risk monitoring processes and allow the industry to meet regulatory reporting requirements while minimizing costs.
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