LEI Full Form

LEI full form is Legal Entity Identifier. 

It is introduced to know about parties to financial transactions worldwide.  RBI introduced the Legal Entity Identifier  system for all payment transactions of value ₹50 crore and above undertaken by entities (non-individuals) using the Reserve Bank-run Centralised Payment Systems with effect from 1 April 2021. LEI is introduced to increase transparency in the financial market. 

LEI is a 20 digit code unique code to identify parties. 

LEI coding format first 4 digit of LEI is the prefix used to identify the Local Operating Unit who issued the LEI code. 5 & 6 digit is Zero. 7 to 18 digits  are the entity-specific part of the code is that is generated by the LOU.19 & 20 digits are the two check digits that are described in the ISO 17442 standards.

Validity period of LEI is one year from the date that the Legal Entity Identifier is registered. For companies annual renewal of LEI is must. After renewal LEI code remain unchanged. 

Legal entity identifier very helpful to banks and credit providers in monitoring the exposure of corporate borrowers. LEI is helpful banks from issuing double loans against the same collateral.

Companies can get LEI code/ number from Local Operating Unit or they can take the help of service providers such as Registration Agents.

Banks need to mention remitter and beneficiary LEI information in NEFT and RTGS payment messages and  they must maintain records of all transactions of Rs.50 crore or more through RTGS or NEFT.

Legal Entity Identifier India Ltd  recognised by Reserve Bank under the Payment and Settlement Systems Act, 2007 as an issuer of LEI codes. It is issuing LEI code/number in India. 

Conclusion:

Dear readers in this article you got the information related to LEI full form. And LEI applicable to large value non individual transaction more than 50 crores. If any queries kindly comment. 

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