Dear Reader,

We would like to draw your attention to the RBI circular "Introduction of Legal Entity Identifier for Large Value Transactions in Centralised Payment Systems" vide RBI/2020-21/82 DPSS.CO.OD No.901/06.24.001/2020-21.

As per the circular, RBI has decided to introduce the LEI system for all payment transactions of value INR 50 crore and above undertaken by entities (non-individuals) using Reserve Bank-run Centralised Payment Systems viz. Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT). The circular will be effective from April 1, 2021.

Now LEI is mandatory for:

• For forward and derivative transactions.
• For entering into foreign exchange transactions where the notional in greater than or equal to USD 1 Million.
• For doing RTGS/NEFT transactions of INR 50 crore and above.

The Legal Entity Identifier (LEI) is a 20-digit number used to uniquely identify parties to financial transactions worldwide. It was conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis.

From April 1, 2021, it will be mandatory to include remitter and beneficiary LEI information while initiating RTGS and NEFT transaction.

The circular states that "Entities can obtain LEI from any of the Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF), the body tasked to support the implementation and use of LEI