Executive Summary:
This document from the Reserve Bank of India introduces the Legal Entity Identifier (LEI) system for large value transactions in Centralised Payment Systems. It mandates the use of LEI for all payment transactions of ₹50 crore and above undertaken by non-individual entities through RTGS and NEFT. The directive is effective from April 1, 2021, and requires member banks to advise relevant entities to obtain LEIs and include LEI information in payment messages.
Key Points / Main Content:
* **Purpose of LEI:**
* Uniquely identify parties to financial transactions worldwide.
* Improve the quality and accuracy of financial data systems for better risk management.
* **LEI Implementation:**
* LEI is required for payment transactions of ₹50 crore and above.
* Applies to non-individual entities using RTGS and NEFT.
* Effective date: April 1, 2021.
* **Responsibilities of Member Banks:**
* Advise entities undertaking large value transactions (₹50 crore and above) to obtain LEI.
* Include remitter and beneficiary LEI information in RTGS and NEFT payment messages.
* Maintain records of all transactions of ₹50 crore and above through RTGS and/or NEFT.
* **Obtaining LEI:**
* Entities can obtain LEI from Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF).
* In India, LEI can be obtained from Legal Entity Identifier India Ltd. (LEIL).
* **Technical Details:**
* For RTGS, LEI information should be provided in the Remittance information field.
* For NEFT, LEI information should be provided in the Sender to Receiver Information field.
* Technical guidelines for populating LEI in messages will be communicated separately.
Impact Analysis:
* **Non-Individual Entities Undertaking Large Value Transactions (₹50 crore and above):**
* Impact: Requirement to obtain an LEI for initiating or receiving transactions through RTGS and/or NEFT.
* Action Required: Obtain LEI from an accredited LOU, such as LEIL, before April 1, 2021, and provide it for all applicable transactions.
* **Member Banks Participating in RTGS/NEFT:**
* Impact: Changes to payment processing systems and communication with customers.
* Action Required: Advise customers to obtain LEIs, modify RTGS and NEFT payment messages to include LEI information, and maintain records of relevant transactions.
Key Entities Referenced
Legal Entity Identifier: A 20-digit number used to uniquely identify parties to financial transactions worldwide.
Reserve Bank of India: The central bank of India.
RTGS: Real Time Gross Settlement system, a Centralised Payment System run by the Reserve Bank of India.
NEFT: National Electronic Funds Transfer system, a Centralised Payment System run by the Reserve Bank of India.
Global Legal Entity Identifier Foundation: The body tasked to support the implementation and use of Legal Entity Identifier (LEI).
Legal Entity Identifier India Ltd: An issuer of LEI in India, recognised by the Reserve Bank under the Payment and Settlement Systems Act, 2007.
Payment and Settlement Systems Act, 2007: An act of the Indian Parliament that provides for the regulation and supervision of payment systems in India.
Mumbai, Maharashtra: City in India, location of Central Office of Reserve Bank of India
भारतीय �रज़व र् ब�क
_______________________ RESERVE BANK OF INDIA _______________________
www.rbi.org.in
RBI/2020-21/82
DPSS.CO.OD No.901/06.24.001/2020-21 January 05, 2021
The Chairman / Managing Director / Chief Executive Officer
of member banks participating in RTGS / NEFT
Madam / Dear Sir,
Introduction of Legal Entity Identifier for Large Value Transactions in Centralised
Payment Systems
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.
2. LEI has been introduced by the Reserve Bank in a phased manner for participants in the
over the counter (OTC) derivative and non-derivative markets as also for large corporate
borrowers.
3. It has now been decided to introduce the LEI system for all payment transactions of value
₹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).
4. In preparation for the wider introduction of LEI across all payment transactions, member
banks should:
i. advise entities who undertake large value transactions (₹50 crore and above) to obtain
LEI in time, if they do not already have one;
ii. include remitter and beneficiary LEI information in RTGS and NEFT payment
messages (details of the identified fields in the messaging structures of RTGS and
NEFT for inclusion of LEI information are at Annex);
iii. maintain records of all transactions of ₹50 crore and above through RTGS and / or
NEFT.
भुगतान और िनपटान �णाली िवभाग, क��ीयकायार्लय, 14वीमंिजल, क��ीयकायार्लयभवन,शहीदभगत�संहमाग,र् फोटर्, मम्ुबई - 400001
फोनTel: (91-22) 2264 4995; फैक् सFax: (91-22) 22691557; ई-मेलe-mail : cgmdpssco@rbi.org.in
Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, ShahidBhagat Singh Road, Fort, Mumbai -
400001
�हदं ी आसान ह,ै इसका�योगबढ़ाइए5. 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. In India, LEI can be obtained from Legal Entity Identifier India
Ltd. (LEIL) (https://www.ccilindia-lei.co.in), which is also recognised as an issuer of LEI by the
Reserve Bank under the Payment and Settlement Systems Act, 2007.
6. These directions are issued under Section 10 (2) read with Section 18 of Payment and
Settlement Systems Act, 2007 (Act 51 of 2007) and shall be effective from April 1, 2021.
Yours faithfully,
(P Vasudevan)
Chief General ManagerAnnex
Bank Customers who must obtain LEI
i. All non-individual customers initiating or receiving transactions of ₹50 crore and
above through RTGS and / or NEFT.
Fields in NEFT and RTGS payment messages to be used for recording Remitter and
Beneficiary LEI
i. For RTGS customer payment transactions, LEI information shall be provided in
‘Remittance information’ field.
ii. For NEFT outward debit messages, LEI information shall be provided in ‘Sender
to Receiver Information’ field.
iii. Technical guidelines for populating LEI in identified fields in RTGS and NEFT
messages shall be communicated separately.