RBI asks large borrowers to get identifier code from banks
Mumbai, Nov 3 (IANS) In a move to improve risk management post the global financial crisis, the RBI on Thursday said it has decided that corporate borrowers having exposure of Rs 50 crore and above will have to mandatorily obtain the 20-digit Legal Entity Identifier (LEI) from banks.
“It has been decided that the banks shall advise their existing large corporate borrowers having total exposures of Rs 50 crore and above to obtain LEI,” an RBI notification said.
The Reserve Bank also unveiled a schedule for implementing the LEI, saying borrowers with fund and non-fund exposure of Rs 1,000 crore and above will have to get the unique code by March 31, 2018. Borrowers having exposure between Rs 500 crore and Rs 1,000 crore have to get the LEI code by June 30, while those having between Rs 100 crore and Rs 500 crore by March 31, 2019.
Those with bank credit between Rs 50 crore and Rs 100 crore have time to obtain the LEI provision by December 2019.
A separate roadmap for borrowers having exposure between Rs 5 crore and up to Rs 50 crore would be issued in due course, the central bank said.
Those who do not obtain the LEI as “per the schedule are not to be granted renewal/enhancement of credit facilities”, it added.
The LEI is a 20-digit unique code to identify parties to financial transactions worldwide and helps improve the quality and accuracy of financial data systems for better risk management.