RBI directs large borrowers to obtain unique identifier code

In a move to make corporates more responsible towards their debt structure, Reserve Bank of India (RBI) has decided to make it mandatory for corporate borrowers having aggregate exposure of Rs. 5 crore and above from any bank to obtain Legal Entity Identifier (LEI) code.

The implementation of LEI code is aimed at improving the quality and accuracy of financial data for better risk management. The 20-digit LEI code is a global standard to identify parties undertaking transactions internationally, post the Global Financial Crisis in 2008.

The RBI has notified the banks to encourage large borrowers to obtain LEI for their parent entity as well as all subsidiaries and associates. The central bank further plans to issue a separate roadmap for borrowers having exposure of between Rs. 5 crore to Rs. 50 crore.

In India, LEI code is issued by Legal Entity Identifier India, which acts as a local operating unit for the global reference number. The code will be captured in CRILC, which is Central Repository of Information on Large Credits. This move will enable assessment and monitoring of aggregate borrowing by entity/ groups.

Meanwhile, Nifty Bank was trading at Rs. 25,525.45, up by 0.39%. The bank stocks were contributing positively to Nifty50 gains as well with Yes Bank trading at Rs. 326.50 per share, up by 1.89%, IndusInd Bank was at Rs. 1,652.20, up by 1.52%, Axis Bank was at Rs. 540.05, up by 1.48%, HDFC Bank was at Rs. 1,829, up by 0.40% in the morning session on Friday.