RBI amends Legal Entity Identifier (LEI) guidelines

Circular no. RBI/2022-23/34 DOR.CRE.REC.28/21.04.048/2022-23, Dated: 21.04.2022

Earlier, RBI vide Circular no. RBI/2017-18/82 DBR No.BP.BC.92/21.04.048/2017-18, Dated: 02.11.2017 has decided that the banks shall advise their existing large corporate borrowers having total exposures of Rs. 50 crore and above to obtain LEI codes as per the specified timelines mentioned in the schedule annexed to the Circular. Further, banks should encourage large borrowers to obtain LEI for their parent entity as well as all subsidiaries and associates.

Now, the RBI has decided to extend the guidelines on Legal Entity Identifier (LEI) to Primary (Urban) Co-operative Banks (UCBs) and Non-Banking Financial Companies (NBFCs). Further, RBI has advised that non-individual borrowers enjoying aggregate exposure of Rs. 5 crores and above from banks and financial institutions shall be required to obtain LEI codes as per the specified timelines annexed to the Circular. The term ‘exposure’ shall include all fund-based and non-fund-based (credit as well as investment) exposure of banks/FIs to the borrower. Aggregate sanctioned limit or outstanding balance, which is higher, shall be reckoned for the purpose.

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

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